Striking off a solvent LTD

[cc_rock]

Hi all,
I am in the process of striking off my one-man, solvent limited company with less than £25000 retained profits.
I have been advised that the steps should be as follows:
- Produce and file the company's final accounts while the retained profits are still held by the company
- Close the bank account and transfer all funds to my personal account
- Create a "board resolution" in which the intention to strike off the company is approved, along with confirming that there are no pending debts
- File the DS01 form to apply for strike off.

Do you see anything incorrect in the above steps?
In particular, I have a couple of questions:
- is it necessary and/or recommended to account for the final capital distribution somehow? For example, by mentioning it in the board resolution that the retained profits have been distributed as capital?
- at the moment, the company's official share capital is just £100 (as many little companies do).. is it necessary to convert all the profit into actual share capital before distributing the retained profit as capital?

I hope my questions make sense.
Thanks in advance to whoever will be so kind to help me!

 

[Paul Kelly ICHYB]

Who gave you that advice?

 

[cc_rock]

Who gave you that advice?

This does not seem to be relevant to the thread, or my questions.. I am surprised to receive such an answer from a moderator.

 

[Paul Kelly ICHYB]

It is very relevant?

A mate in the pub would be different to an accountant!

Getting this wrong could cost you a lot of money - I would ask my accountant!

 

[cc_rock]

It is very relevant?

A mate in the pub would be different to an accountant!

Getting this wrong could cost you a lot of money - I would ask my accountant!

Well I don't have an accountant at the moment and I don't want to consult one.. that's why I am asking here.
It's not relevant in the sense that I was expecting a discussion about what I posted and the specific situation.. I would like to talk abotu the actual matter, and not about who advised me about what, which is, in my opinion, not relevant.

 

[Paul Kelly ICHYB]

The bast advice is to speak to an accountant!

How will the business account for the £25k you take?
Is there PAYE?
Are there pension payments?
Will there be corporation tax owed?

So many things you have not mentioned - any advice here on the info you provided would be incomplete and dangerous for you to act on!

 

[cc_rock]

The bast advice is to speak to an accountant!

How will the business account for the £25k you take?
Is there PAYE?
Are there pension payments?
Will there be corporation tax owed?

So many things you have not mentioned - any advice here on the info you provided would be incomplete and dangerous for you to act on!

If I omitted them it's because they are already taken care of, sorry if that wasn't clear.
- PAYE and VAT positions have already been closed
- No pension payments
- No profits in the last few years so no corporation tax owed.

To anybody else that reads and wants to provide an answer.. I only need an answer to the few (very precise) questions I have asked.. please assume that everything else is already in order. I know what I'm doing (Except for those points).

 

[japancool]

Have you considered a Members' Voluntary Liquidation?

There may be tax advantages:

Liquidate your limited company

Compulsory and voluntary liquidation, the liquidation process, how liquidation affects company directors and the role of a liquidator

www.gov.uk

This details some of the benefits:

MVL - Benefits and Tax Advantages | Frost Group

Arrange a tax efficient and immediate distribution of company assets to shareholders. Prices start from a fixed fee of £850 and we reclaim all of your VAT on your behalf

www.frostgroup.co.uk

 

[PCD]

What you propose is broadly ok. In the board resolution worth stating the the remaining funds will be distributed to the shareholders as a capital distribution. I would also leave the transferring of funds and closing the bank account until after the DS01 is submitted, but immediately after before the bank sees the DS01 and freezes the account. You would also need to include the capital distribution as a capital gain on your personal self assessment.

Before doing the above you should however determine whether this is the best cause of action. It might be better, for example, to draw some of the funds as a dividend rather than a capital distribution. As mentioned above it is probably worth speaking to an accountant.

 

[Lisa Thomas]

Have you considered a Members' Voluntary Liquidation?

There may be tax advantages:

Liquidate your limited company

Compulsory and voluntary liquidation, the liquidation process, how liquidation affects company directors and the role of a liquidator

www.gov.uk

This details some of the benefits:

MVL - Benefits and Tax Advantages | Frost Group

Arrange a tax efficient and immediate distribution of company assets to shareholders. Prices start from a fixed fee of £850 and we reclaim all of your VAT on your behalf

www.frostgroup.co.uk

An MVL is probably not worth it given the assets are under £25k.

(FYI the article you have shared is out of date, still referring to entrepreneurs relief which changed to Business Asset Disposal Relief in 2020, and referencing old limits etc.)