Business

How to close a UK-based Limited Company that is created just a few days ago?

How to close a UK based Limited Company

It is quite straightforward to strike off a company from the public register in the UK and it doesn’t matter if it’s been going for a few days, weeks, months, or years, but you must follow the rules by the letter.

First and foremost, you must have the consent of all of the limited company directors and shareholders before you proceed. And note, that although the cost of striking your company from the Company Register is only £10, you cannot use a cheque belonging to the company that you wish to strike off.

In order to strike off your company, at least these four criteria must be met:

  • The company hasn’t traded or sold off any stock in the last three months;
  • It hasn’t changed name in the last three months;
  • It isn’t threatened with liquidation;
  • There are no agreements with creditors, such as a Company Voluntary Arrangement (CVA).

Closing down process

  • To close down your company you must inform all interested parties and inform the UK tax authorities, HMRC, and fill in form DS01.
  • DSO1 must be filled in carefully and signed by directors and shareholders before you send it to Companies House.
  • Having filled in the form, signed by the directors and shareholders, then a copy must be sent within seven days to anyone else who could be affected, including members, creditors, employees, managers or trustees of any employee pension fund, and any directors who didn’t sign the application form.

  • In addition, if your company employs staff, you must follow the rules of the law if you make staff redundant, and pay final wages or salary.

Closing down checklist

  • Having informed HMRC that your company has stopped trading, the final balance of any outstanding PAYE and National Insurance must be paid to them.
  • You must request that HMRC close down the company’s payroll scheme.
  • Ensure that any business assets are shared among the shareholders before the company is struck off as anything left over will go straight to the Crown.
  • You must send final statutory accounts and a Company Tax Return to HMRC.
  • Note that if you take assets out of the company before strike-off, Capital Gains Tax (CGT) may be payable.
    Explore whether you can get tax relief on CGT via Entrepreneurs’ Relief.
  • Note that you will need to fill out a personal Self Assessment tax return if Entrepreneurs’ Relief is applicable.

Document management

All documents relating to the business must be kept for seven years after the company is struck off, including bank statements, invoices, and receipts; and if the company employed people, you must keep copies of the company’s employers’ liability insurance policy and schedule for forty years from the date the company was dissolved.

Verification of strike-off

Companies House will write to say that that the form has been received. Providing the form is correctly filled in, your request for the company to be struck off will be published as a notice in the Gazette (the official public record).

Providing there are not objections, the company will be struck off the register once the three-month notice period has passed.

Following this three-month period, a second notice is published in the Gazette. Providing there are no objections, then the company is finally “dissolved”.

An expert in this area can make the process very easy, but if you undertake the process yourself, ensure you follow the rules by the letter. Get in touch with us at info@dnsaccountingservices.co.uk if wish to arrange free consultation.

About the Author:

Sumit Agarwal
, A specialist accountant and tax adviser for freelancers, contractors and small businesses since 2005, He is an expert in business growth and development strategies. A renowned tax expert for owner managed businesses and contractors, He won the British Business Forum’s Young Entrepreneur Award in September 2012, presented at the House of Commons by MP Vrinder Sharma.