How to Close Your Limited Company
We sometimes hear from clients who want to cease trading and request to close their limited company . Where the limited company does not have any debts, other than money owed to company directors, it is fairly straight forward to close the limited company.
The dissolution method known as “voluntary strike off” can be followed and the directors simply need to follow the Companies House prescribed process. The company directors will need to complete and sign form DS01 which can be downloaded here.
Once complete the form must be posted to Companies House at the address provided and a cheque for £10 will need to be enclosed. This is an admin fee levied by Companies House for the strike off of a limited company.
You must ensure that you have taken the following steps prior to applying for voluntary strike off:
1) The company has ceased trading and has not traded in the last three months;
2) You have informed HMRC as they will expect a final set of accounts and for any tax to be settled – although if you do close your limited company before submitting your final corporation tax return it is likely that HMRC will not ask for payment as the company has been dissolved;
3) All creditors must be informed prior to your application for voluntary strike off.
Finally, don’t forget to close your business bank account before the company is struck off. If you don’t the bank account will be frozen and any remaining balance will be lost to the Crown.
_As a Director of a small limited company you have 9 months, from your accounting year end date to file your accounts with Companies House. However, if you are a new company you have 21 months to file your accounts from the date of incorporation of your company. You will get a reminder from Companies House about 6 weeks before your accounts are due. This reminder will be sent to your registered office address.
If you miss the deadline of filing your company’s accounts you will incur an automatic penalty. Please be aware that late filing of accounts or not filing the accounts may mean you could be prosecuted and may end up with a criminal record and a fine that could be as high as £5,000. You may also be disqualified acting as a director.
Late filing penalties are as follows:
Missed Deadline by: Penalty
Less than 1 month £150
Over a Month but less than 3 months £375
Over three months but less than 6 months £750
Over 6 months £1,500
The above penalties will be doubled if you are late in filing the accounts again in the following year.
Licenced Accountant in Brighton