Closing limited company that owes only me money

[BusinessUK]

Hello, I feel stuck and hope you can help.

I created a limited company in 2014, but became seriously ill 6 months ago and want to close it down.

I am the sole director and was the driving force (it has no employees).

Due to my ill-health and a change in trading conditions it's no longer viable. It will go dormant next month after 3 months of inactivity. It has no assets.

The problem is that it owes me money and the bank balance isn't enough to repay the director's loan account (in credit).

Is it possible for me to take what's in the bank account and cancel the rest of the debt that the company owes me? Will this cause problems in the accounts, as I'm technically giving the company free money and making it solvent?

Please would you advise on the simplest way to get this closed down as I don't need any more stress as I'm still in recovery? Thank you.

 

[Dnallov]

I'm sorry to hear of your ill health, and I'm sure the members on this form will be able to help

From what I understand a director's loan can be paid back (fully or partially) to you when you feel fit, as this is your money that you lent to the company, and expect it back. So I can’t no reason against you emptying your business account into your personal account, as long as the director's loan account covers that amount, and a journal entry indicates this transaction

That’s my understanding, but please let someone with far more knowledge than me add to that, or correct it!

 

[Paul Roberts]

You should be fine as long as you don't have any other creditors.

Checkout this article for more in depth information. It answers lots of questions, but I'm sure other forum members will add to this tomorrow

brighton-accountants dot com/blog/close-down-limited-company

(Please edit above url)

 

[Scalloway]

If there are no other creditors, such as HMRC, then you can apply to Companies House to have the company struck off.

https://www.gov.uk/strike-off-your-company-from-companies-register/apply-to-strike-off

 

[Ola1]

Adding to the above, make sure to empty the account before you strike off the company, or the money will be frozen .

 

[BusinessUK]

Thanks everyone.

There are no creditors. The company just owes me money (director's account in credit) from what I put in to start it up.

I did read the info from Brighton accountants (it's very good, thanks).

What happens about 2015/16 accounts, though?

Should I get an accountant to prepare the (draft) final accounts in advance, knowing as I do that the company is not trading and I can soon apply to Companies House/HMRC as inactive, prepay the accountant, transfer the balance as repayment of my loan, then apply for strike off? Won't HMRC block the strike-off if accounts/corp tax calc (zero anyway) isn't submitted?

I would rather avoid the accountant fees if poss, as it will eat into what little is left in the bank account but I do want to close it down correctly.

 

[Scalloway]

If you apply for strike off before your corporation tax return is due HMRC won't be expecting anything and they won't object. Once the company has not traded for three months empty the bank account and apply for strike off.

 

[BusinessUK]

Thank you very much for all your advice.