Close down your company
Before applying to strike off your limited company, you must close it down legally. This involves:
- announcing your plans to interested parties and HM Revenue and Customs (HMRC)
- making sure your employees are treated according to the rules
- dealing with your business assets and accounts
Who you must tell
Fill in an application to strike off and send a copy within 7 days to anyone who could be affected. This includes:
- members (usually the shareholders)
- managers or trustees of any employee pension fund
- any directors who didn't sign the application form
If you don't follow the rules on who you must tell, you can face a fine and possible prosecution.
If your company employs staff, you must:
- follow the rules if you make staff redundant
- pay their final wages or salary
PAYE and National Insurance (NI)
You'll need to tell HMRC that your company has stopped trading and will soon be dissolved.
Once you've paid the final balance of PAYE and National Insurance, ask HMRC to close down the company's payroll scheme.
HMRC employer helpline Telephone: 0300 200 3200 Monday to Friday, 8am to 8pm Saturday, 8am to 4pm
You should make sure that any business assets are shared among the shareholders before the company is struck off.
Anything that's left will go to the Crown - you'll have to restore the company to get anything back.
You must send final statutory accounts and a Company Tax Return to HMRC (you don't have to file final accounts with Companies House).
Prepare your final accounts and company tax return.
File your accounts and company tax return, stating that these are the final trading accounts and that the company will soon be dissolved.
- Pay all Corporation Tax and any other outstanding tax liabilities.
If you've made a loss in your final year of trading, you might be able to offset the tax against profits from previous years - this is known as 'terminal loss relief'. You can claim this on your final tax return.
Capital Gains Tax on personal profits
If you take assets out of the company before it's struck off, you might have to pay Capital Gains Tax on the amount.
You might be able to get tax relief on this through Entrepreneurs' Relief.
You will work this out on your personal Self Assessment tax return.
If the amount is worth more than £25,000, it will be treated as income and you'll have to pay Income Tax on it.
You must keep business documents for 7 years after the company is struck off, eg bank statements, invoices and receipts.
If the company employed people, you must keep copies of its employers' liability insurance policy and schedule for 40 years from the date the company was dissolved.