LLP Mess: Dissolve and avoid filing accounts?

[Matty Jay]

Hi all,

I've gotten myself in a pickle by setting up an LLP in summer 2010 with a friend. We essentially ran a small events company that hosted two events, we put about £500 behind it each and lost almost everything. The business was active for around 6 months and then we jacked it in.

A few weeks back I received a letter from Companies House informing me that we needed to file accounts for the year 2010-2011. A friend who has some knowledge of accounts has helped me assemble a balance sheet using another LLP's filing as a base. I'm nervous though that something may have been missed off and that I'll just get myself in even more messes if they reject our accounts.

Reading the thread below, I was wondering is there anyway to contact Companies House, explain the situation that the business turned no profit, was only briefly active and that we'd like to dissolve it and avoid even having to file anything?

Can someone advise? I'd prefer to do this of course if possible, and the same for HMRC - although I do need to file my own personal self-assessment (which is late I know)

As the OP in the thread I linked to, I'm not fussed about paying back anything I'm owed just don't want to get dragged into court/fines etc. and am bricking myself a little!

We did pay money in and out using company account.

Can anyone help?

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=145510&page=2

 

[Blood Lust]

Hi all,

I've gotten myself in a pickle by setting up an LLP in summer 2010 with a friend. We essentially ran a small events company that hosted two events, we put about £500 behind it each and lost almost everything. The business was active for around 6 months and then we jacked it in.

A few weeks back I received a letter from Companies House informing me that we needed to file accounts for the year 2010-2011. A friend who has some knowledge of accounts has helped me assemble a balance sheet using another LLP's filing as a base. I'm nervous though that something may have been missed off and that I'll just get myself in even more messes if they reject our accounts.

Reading the thread below, I was wondering is there anyway to contact Companies House, explain the situation that the business turned no profit, was only briefly active and that we'd like to dissolve it and avoid even having to file anything?

Can someone advise? I'd prefer to do this of course if possible, and the same for HMRC - although I do need to file my own personal self-assessment (which is late I know)

As the OP in the thread I linked to, I'm not fussed about paying back anything I'm owed just don't want to get dragged into court/fines etc. and am bricking myself a little!

We did pay money in and out using company account.

Can anyone help?

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=145510&page=2

You have to inform Companies House you arent trading. Go to their website, click on closing a company and its easy to follow.

With it being a LLP you wont need to pay out any money as you're protected from the businesses liabilities such as tax.

 

[Matty Jay]

You have to inform Companies House you arent trading. Go to their website, click on closing a company and its easy to follow.

With it being a LLP you wont need to pay out any money as you're protected from the businesses liabilities such as tax.

Thanks for the reply. To confirm this will negate the need to file any annual accounts whatsoever? The accounts their chasing letter was referring to was for the first year the LLP was operating. So it's possible to set up an LLP for one year effectively and shut it down without ever having to file annual accounts?

 

[Blood Lust]

Thanks for the reply. To confirm this will negate the need to file any annual accounts whatsoever? The accounts their chasing letter was referring to was for the first year the LLP was operating. So it's possible to set up an LLP for one year effectively and shut it down without ever having to file annual accounts?

No accounts

Dont be getting any ideas lol

 

[WJP]

No accounts

Dont be getting any ideas lol

I'm not convinced this is right. I don't know about LLPs myself but with Ltd companies, if the company is dormant you still have to submit accounts. If you do not submit them then you get fined. Also technically your partnership wasn't dormant anyway because you had significant transactions during that accounting period. You lost money but as soon as there are transactions then the company isn't dormant (even getting interest received on a company bank can count as a significant transaction, so I think your events probably would!).

I'd wait for one of the accountants to come along and give you a definite answer before you take this as fact Matty Jay. They will be able to give you a professional opinion.

 

[David Griffiths]

If the LLP continued, it would have to file accounts as it's clearly not dormant. However, once you apply for it to be struck off, Companies House will not look for you to file any accounts or other returns while the process is ongoing.

However you will still have to file tax returns with HMRC. There would be a partnership tax return and and individual return for each partner. If those aren't filed, HMRC will issue penalty notices, and the tax and penalties will be the personal liability of the partners. There's unlikely to be a tax liability if there are losses, but having an LLP won't give any protection against income tax owed.

In this case, it's likely to be worthwhile filing the forms as there may be loss claims that mean that the partners can get personal tax repayments.

 

[ludwig]

I had almost exactly the same problem. I set up an LLP and the other partner just refused to do any work and then left . I got letters from HMRC and companies house but when I phoned they kept saying that I didn't need to do anything. I was wary of this because it seemed to contradict what the letters were saying. Anyway it was clear that the LLP had made no profit so my accountant did a very basic return to that effect so satisfying the HMRC. Companies house just said that if I did nothing that the LLP would be struck off and any assets would revert to the crown (there were none) so that's what I did. I couldn't actually close the LLP because both partners had to sign and I could not contact the other partner. I later discovered that she had instated her mother as a partner and used her to close the partnership. I'm surprise that she was able to do this and there was no need according to companies house . I was quite worried about the situation for a while but actually there was no problem.

 

[Matty Jay]

If the LLP continued, it would have to file accounts as it's clearly not dormant. However, once you apply for it to be struck off, Companies House will not look for you to file any accounts or other returns while the process is ongoing.

However you will still have to file tax returns with HMRC. There would be a partnership tax return and and individual return for each partner. If those aren't filed, HMRC will issue penalty notices, and the tax and penalties will be the personal liability of the partners. There's unlikely to be a tax liability if there are losses, but having an LLP won't give any protection against income tax owed.

In this case, it's likely to be worthwhile filing the forms as there may be loss claims that mean that the partners can get personal tax repayments.

Hi David,

Thanks for this. The next issue I seem to have come up against in this saga is that on the Partnership tax return there is a section for each partner to complete detailing their share of profit (or loss). The section for each individual requires, their name, NI number and UTR. My partner in the venture has just informed me that they do not have a UTR. I've tried to call HMRC a few times today but they are 'experiencing a high volume of calls' and advising people to call back later in the week (I've waited on hold for an hour twice and the call just drops after a while).

Is there anyway of submitting this without my partners UTR and just his NI? Seems unreasonable if submitting this is held hostage by his inabilitity to get himself in order and I start accrewing fines on behalf of the LLP. Really want to put this whole situation to bed as it's just hanging over me like a grey cloud

Thanks!

Matty Jay