Closing a limited company

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By Lynne Gowers on 25th October 2018

Closing a limited company

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There’s plenty of advice and resources online about setting up a limited company, but just as important is to get the right guidance when the time comes to wind up a company.

When it comes to closing a limited company, it is essential that the correct procedures are followed to avoid unnecessary penalties and damage to your future trading prospects.

There are various courses of action you can take if you no longer need your limited company, depending on your future intentions and plans. The ways to legally and properly close a limited company business include:

  • Striking off
  • Company liquidation – Voluntary and Compulsory
  • Dormancy

Free guide

Our free guide explores these options in more detail, to allow to decide what is best for you. To download it just click on the link at the top of this page.

If you are a company director and closure is on your agenda, here are some additional factors to consider:

The cost of closure

Companies House charge a small fee (£8 or £12 depending on how you submit) for striking a limited company off the register, but you should factor in the other costs of closing your company. There are a number of accounting tasks associated with closure, including the preparation of a final corporation tax return and accounts.

Once you have informed your accountant of your intention to close your company, they will be able to give you a quote for the work that needs to be done, if you decide to close the company by striking off.

Settling outstanding tax liabilities before you strike off the company

If your company has outstanding tax liabilities, closure will have to be delayed until these are settled. You shouldn’t submit form DS01 (the application to strike off a company) to Companies House before this.
If you have difficulty paying your outstanding tax bill, HMRC may be amenable to setting up a payment plan.

How long does closing a limited company take?

Closing a limited company will take a minimum of three months from the date you cease trading, as you cannot submit your DS01 before that date.
Providing information promptly, timely payment of tax bills and acting on the instructions of your accountant will expedite the process.

Failure to close a limited company properly

You won’t be discharged of your obligations as a limited company until you have gone through the due closure process.
Failure to do this could result in continued liabilities, penalties and even prosecution.

For further information on closing a limited company, download our free guide by clicking on the link at the top of this page.

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