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Voluntary closer of a Ltd Co.?
One of my customers has asked me how he would go about closing his small Ltd company. There is only 1 employee - him and only one shareholder - him. He has had little or no turnover since June of last year and has decided to call it a day. I don't know why he though I might know what to do! (I told him to ask his accountant, but he said he'd only get "another bl**dy bill from him" ).
He says he isn't insolvent, but his cash at the bank is running out (he hasn't paid himself for the last 6 months!)There will be enough to cover the bills to be paid - for things like electricity/telephone etc. but not much more.
For what it is worth, there are no real assets or stock/buildings as he worked from home as a technology consultant recommending and sourcing specialist technology products (which is how I know him). I suspect he will have costs associated with closing the Company too.
Any advice generous and knowledgeable ABers? I couldn't even suggest to him where he might find out what he needs to do.
He says he isn't insolvent, but his cash at the bank is running out (he hasn't paid himself for the last 6 months!)There will be enough to cover the bills to be paid - for things like electricity/telephone etc. but not much more.
For what it is worth, there are no real assets or stock/buildings as he worked from home as a technology consultant recommending and sourcing specialist technology products (which is how I know him). I suspect he will have costs associated with closing the Company too.
Any advice generous and knowledgeable ABers? I couldn't even suggest to him where he might find out what he needs to do.
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The unofficial way to do it is simply to cease trading and not send any returns in to Companies House. After a couple of years, the company will automatically be wound-up, without the need for any payment or form-filling. I did exactly that with my own one-man limited company (which didn't owe anyone any money). The only downside is that all of the company's assets will belong to the Official Receiver. (In my case that amounted to one answering machine and one inkjet printer. Nobody ever wanted them from me. I used the printer myself until it was worn out. I've still got the answering machine!).
The official way to wind up a limited company is explained here:
http://www.companieshouse.gov.uk/infoAndGuide/ windingUpCompany.shtml
Chris
The official way to wind up a limited company is explained here:
http://www.companieshouse.gov.uk/infoAndGuide/ windingUpCompany.shtml
Chris
Thanks for the reply.
As you've suggested, the company (rather than the owner as an individual) will accrue fines for late returns. However they'll be written off when the company is struck from the register. (Well, that's what happened with my firm anyway. I did take care to point out that my way of doing things is definitely 'unofficial').
My firm wasn't registered for VAT, so I didn't need to contact HMRC regarding that. It's quite a long time since I closed my company but my recollection is that HMRC eventually wrote to me about the former company. I simply told them when I'd ceased trading, and that neither I nor the company had received any income from the business since that date, and they seemed to be satisfied.
Chris
As you've suggested, the company (rather than the owner as an individual) will accrue fines for late returns. However they'll be written off when the company is struck from the register. (Well, that's what happened with my firm anyway. I did take care to point out that my way of doing things is definitely 'unofficial').
My firm wasn't registered for VAT, so I didn't need to contact HMRC regarding that. It's quite a long time since I closed my company but my recollection is that HMRC eventually wrote to me about the former company. I simply told them when I'd ceased trading, and that neither I nor the company had received any income from the business since that date, and they seemed to be satisfied.
Chris
Your second response only appeared while I was typing my last post. As far as I recall, HMRC seemed to be satisfied by a simple statement that the company was no longer trading.
Chris
PS: My experience of getting HMRC to know how to deal with one-man limited companies suggests that most of their staff 'haven't got a clue'. When I started the firm, I phoned HM Inland Revenue (as it then was) and clearly explained that, as a director, I would be both employer and employee for PAYE purposes. They sent me the paperwork for self-employed people. I phoned them again and, after lengthy explanation, they sent me more 'self-employed' paperwork. I then wrote a very long letter, explaining the situation, only to be sent a third set of 'self-employed' paperwork. Eventually I called at their Ipswich office, where it took me nearly an hour to convince their staff that, because I was running a limited company, I would not legally be self-employed!
Chris
PS: My experience of getting HMRC to know how to deal with one-man limited companies suggests that most of their staff 'haven't got a clue'. When I started the firm, I phoned HM Inland Revenue (as it then was) and clearly explained that, as a director, I would be both employer and employee for PAYE purposes. They sent me the paperwork for self-employed people. I phoned them again and, after lengthy explanation, they sent me more 'self-employed' paperwork. I then wrote a very long letter, explaining the situation, only to be sent a third set of 'self-employed' paperwork. Eventually I called at their Ipswich office, where it took me nearly an hour to convince their staff that, because I was running a limited company, I would not legally be self-employed!
Also let him be aware that the official receiver will also manage to create costs for their work that will exactly match his companies assets i.e. whatever money he has in the bank under the companies name.
My firm recently received a creditors report from an insolvent company that owed us some money.
You won't be surprised to know that the recovered assets were �9,845.56
Costs for work done by insolvencey firm �9,845.56 !
Creditors receive �0-00
Beunchicos first response is probably the best,just cease trading after paying any creditors.
My firm recently received a creditors report from an insolvent company that owed us some money.
You won't be surprised to know that the recovered assets were �9,845.56
Costs for work done by insolvencey firm �9,845.56 !
Creditors receive �0-00
Beunchicos first response is probably the best,just cease trading after paying any creditors.
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