Closing Ltd company

[Lark]

How do I go about closing my ltd company? I am the only employee.

Thanks for any pointers!

 

[akirk]

make sure that there is no money owing to anyone...

then apply to Companies House to 'strike off'
it takes c. 3 months - they publish a notice in the London Gazette to announce it and give folks 3 months to object...

then they remove it...

alternatively, consider keeping it dormant if you might need it again in the future, though you will have to file dormant accounts / an annual return

Alasdair

 

[Lark]

Yes, I'd prefer to keep it dormant. I can't imagine the annual return for that could be too difficult? How do I do that?

 

[Williams lester]

If you keep the company then you will still need to pay £15 a year for the annual return, and submit dormant accounts each year too. With the cost of an incorporation at about the same price I don't see the benefit in keeping it.

 

[Truemanbrown]

Do you have any profits remaining in the company? If so, how do you plan to extract them?

 

[elaine@cheapaccounting]

I have to say that I am not a great fan of keeping companies dormant.

You still have the annual return and dormant accounts to file and if the accounts are late then you will be fined. Just seems a hassle really.

Depending on the position of the company - apply to strike off use form DS01, full details here:

http://www.companieshouse.gov.uk/about/gbhtml/gp4.shtml#ch1

 

[Lark]

no, sadly no profits, hence the decision to close. There's a few hundred pounds in the compant accounts, mostly from myself as a director's loan and a little from transactions on the website but outgoings have been higher than income

And I do have some stock which I am thinking I could sell off on ebay as a sole trader?

 

[Truemanbrown]

no, sadly no profits, hence the decision to close. There's a few hundred pounds in the compant accounts, mostly from myself as a director's loan and a little from transactions on the website but outgoings have been higher than income

And I do have some stock which I am thinking I could sell off on ebay as a sole trader?

Some quick points -

1. Did the company make profits in prior years. If so, I would prepare a final set of accounts up to the termination date because you may be able to claim tax relief on any loss made in the final period;

2. If you are transferring the stock to yourself, then you should sell them to yourself at an open market value;

3. If you have a credit balance (i.e. the company owes you money) on your director's loan account which becomes irrecoverable then you may be able to make a claim for a capital gains tax loss.

 

[Lark]

Some quick points -

1. Did the company make profits in prior years. If so, I would prepare a final set of accounts up to the termination date because you may be able to claim tax relief on any loss made in the final period;

2. If you are transferring the stock to yourself, then you should sell them to yourself at an open market value;

3. If you have a credit balance (i.e. the company owes you money) on your director's loan account which becomes irrecoverable then you may be able to make a claim for a capital gains tax loss.

1) no profits in previous years
2) could that be less than what the company paid? Some stock has devalued since purchase
3) very confused by this point. When I have put money into the company I have just transferred from my personal account into the company account. The company doesn't owe anything. How/why would the money become irrecoverable to me?

 

[Truemanbrown]

2) could that be less than what the company paid? Some stock has devalued since purchase

Yes.

3) very confused by this point. When I have put money into the company I have just transferred from my personal account into the company account. The company doesn't owe anything. How/why would the money become irrecoverable to me?

If you have transferred money from your personal account into the company account then you have loaned the company that money.

If you cannot recover the whole of that money from the company, then the unrecovered amount may be claimed as a capital gains tax loss.

 

[Lark]

A mug of tea has helped, I think I understand now. Do you mean that eg I lent the company £1000 but, including stock value there is only £400 left then the £600 discrepency would be the irrecoverable bit.

Prior to tea I thought you were indicating that I might not be able to recover money now in the company account and not oweing to anybody (but me).

 

[Truemanbrown]

A mug of tea has helped, I think I understand now. Do you mean that eg I lent the company £1000 but, including stock value there is only £400 left then the £600 discrepency would be the irrecoverable bit.

Prior to tea I thought you were indicating that I might not be able to recover money now in the company account and not oweing to anybody (but me).

Basically, yes. It may be only £600 tax relief but it could save you £168 if you were an higher rate taxpayer and sold a non-business asset. Not much I know, but something.

 

[Lark]

the company's 2nd Annual Return is due on Oct 20th, how should I fit it in with that to minimise any paperwork and form filling?

 

[Truemanbrown]

the company's 2nd Annual Return is due on Oct 20th, how should I fit it in with that to minimise any paperwork and form filling?

If you are going to close down the company then fill in the form DC01 and send to Companies House. Make sure that all the assets have been transferred to yourself leaving only the credit balance on the director's loan.

You will not have to bother with the Annual Return.

 

[liquidauctions]

Id just leave it. It costs money top submit in the gazette. If you dont file your return it will be sturck off.

 

[elaine@cheapaccounting]

Id just leave it. It costs money top submit in the gazette. If you dont file your return it will be sturck off.

that would be £10 to strike off