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How to close a Limited Company

I need to close my company. How can I do this?

Updated July 2016.

There are always plenty of valid reasons behind needing to closing a company. Whatever the reason for closing down your limited company, there are certain processes that you need to follow to complete this:

Dormant Company

Rather than closing your company completely, you may want to keep your company open and registered but physically stop trading for a period of time. If this is the case then making your Limited Company dormant instead of closing it down completely would be your best option.

Making your company Dormant can also be more cost effective when compared to closing a company down completely. You can make a company Dormant for around £100, so if you simply want to take some time out and pause your trading activity for any length of time, then  this could be your better option. Contact us if you need help. We will be happy to give you some free advice.

Dormant Company info: https://www.companieshouse.gov.uk/about/pdf/gba10.pdf

Of course when you make a company Dormant it is important to make your clients and trade partners fully aware of your situation and ensure that any existing agreements you have with your clients or customers are properly finished before you pause your trading activities.

There are also tax implications involved with making your company dormant. You will need an accountant to help prepare your final accounts to ensure all tax owed, including corporation tax, is fully paid up. You will also need to close any bank accounts that are linked to the dormant company.

Limited Company Liquidation

If you don’t want to make your company dormant and are sure that you want to close you Limited Company down completely, then you will need to be aware of any debts outstanding and clear them if you can.  If there are any debts still outstanding the liquidation process can take a lot longer and can be more involved. We would highly recommend speaking with us or to a professional accountant to ensure that you are fully aware of your responsibilities and obligations. If there are unpaid debts outstanding the company will be forced to go into Liquidation. You can read more information on Insolvency here.

What next?

If you are in a good financial position where your Limited Company has no debts outstanding, or can meet its obligations, then the closing procedure is fairly simple and straightforward. You will need to choose a date for when the company should stop trading. On this date it is important that no more transactions are carried out and that any creditors have been fully paid.

HMRC will also need to be notified of your closure and be given a final set of accounts including all the transactions up to the closure point. Also you must remember to cancel your VAT registration if your company is VAT registered.

A final payroll will need to be completed and P45`s issued for your staff and yourself. A P35 Employer Annual Return will also have to be filled with HMRC.

Once your company has ceased trading for three months, you can make an application to Companies House to get your company dissolved via the DS01 form.

If there are no objections to your Limited Company being closed, it will be formally given the go ahead and will be removed from the register of companies that is held on record at Companies House.

Your Virtual Office London provides leading Company Formation services including advice on trading, closing down companies and company accounting. We also provide leading supplementary services such as mail forwarding in London and Registered Office address for your Company. If you need help or advice don’t hesitate to get in touch with us today.

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