Striking off Ltd Co.

[Barba]

Hi all,

Due to time constraints I'm looking at closing down a Ltd company I had set up a few years ago. I had purchased some equipment (printer, land line phone) and raw materials in the start-up stages using my own money, which were credited to a directors loan account.

I had only used the raw materials for samples and haven't had an income or made a profit through the Ltd company. I've filed accounts for the past few years and have not had any Corporation tax etc to pay.

The only activity in the past 6 months are accountant costs (paid in Feb 2017 for the accounts made up to 31st May 2016) and a monthly Bank account charge.

My queries are:

• As I'm the only creditor with a Directors loan, can I wipe this off so the Ltd company doesn't have to pay me back?
• I understand I have to move the bank balance and any assets from the company before it closes. Do I just move the remaining cash in the bank to my personal account? What about the printer?
• Once I've sent the DS01 form off, do I still have to file the accounts made up to May 31st 2017 when due? What about the confirmation statement due by 16th May?

Many thanks for your time.

 

[Chart Accountancy]

In order to close a company, you need to not have traded for at least 3 months. If you haven't traded since the last set of accounts filed to 31March16, you can file the strike off application, and there will be no need to file the 2017 accounts and confirmation statement once you have the strike off 1st gazette published.

 

[Scalloway]

• As I'm the only creditor with a Directors loan, can I wipe this off so the Ltd company doesn't have to pay me back?
• I understand I have to move the bank balance and any assets from the company before it closes. Do I just move the remaining cash in the bank to my personal account? What about the printer?

You don't need to do anything about the loan. It just disappears in the strike off.

Yes just move any remaining cash to your personal account. I presume this will pay off part of your director's loan. Nothing formal needs to be done with the printer.

 

[Barba]

Thank you both for your replies.

In order to close a company, you need to not have traded for at least 3 months. If you haven't traded since the last set of accounts filed to 31March16, you can file the strike off application, and there will be no need to file the 2017 accounts and confirmation statement once you have the strike off 1st gazette published.

The only movement of funds in the company since the 31st March 2016 are: monthly phone line rental, domain name renewal, annual return fee, accountancy fee and bank fees. Hopefully these are not classed as trading activities.

You don't need to do anything about the loan. It just disappears in the strike off.

Yes just move any remaining cash to your personal account. I presume this will pay off part of your director's loan. Nothing formal needs to be done with the printer.

Thanks Scalloway. I will indeed be paying off part of my directors loan with the remaining bank balance.

 

[Chart Accountancy]

Hi Barba

Phone bills, domain name and bank fees are all regarded as trading. You should close your bank account, agree on a final fee with your accountant and pay it all. You will then need to have absolutely no movements for at least three months before you can close down. You can extend your current accounting period to end of May to cover any final transactions, prepare the final set of accounts and then submit for close down.

 

[Scalloway]

Phone bills, domain name and bank fees are all regarded as trading.

Trading is buying and selling, not paying bills,

 

[Chart Accountancy]

I would disagree with this, incurring expenses is also trading.

 

[Chart Accountancy]

The understanding of non trading for the purpose of strike off is different from the general understanding of trading. The following would not constitute trading for the purpose of strike off and incurring general business expenses will be trading. As presumably the amounts involved are not significant, these can be treated as director's payments but strictly speaking another final set of accounts should be prepared to capture all movements.

For example, the company may not make an application for voluntary strike off if, at any time in the last 3 months, it has:

engaged in any other activity except one which is necessary for the purpose of:
making an application for strike off or deciding whether to do so (for example, seeking professional advice on the application or paying the filing fee for the strike off application)
concluding the affairs of the company, such as settling trading or business debts
complying with any statutory requirement