For a number of reasons, you may reach the decision to shut down your limited company, you have decided to take a job elsewhere, your revenue has dramatically decreased, you want to convert back to a sole trader with the reduced paperwork and filing requirements. Either way, you need to know how to close down a limited company
SO, WHAT DO YOU NEED TO DO TO OFFICIALLY CLOSE DOWN YOUR COMPANY?
First of all, ensure that everything in the limited company is up to date and tidy. All bills are paid, your customers have paid your invoice and ensure that you make some provisions for ongoing costs you will likely incur in wrapping the business up, for example accountants costs for your final accounts and tax calculations. These can all be business expenses set off against your revenue to reduce profit and any tax you have to pay.
The next step is to apply to Companies House for the company to be stuck off. To do this form DS01 needs to be completed which is a ‘Striking off’ application, basic company information needs to be included and it must be signed by the directors of the company. A £10 cheque needs to be included from a bank account that does not belong to the company.
Companies House will post a public notice that you intend to shut down your company to allow any third parties who may object to the closure to do so. If no objections are raised within three months Companies House will close your company.
HMRC then also needs to be informed of your company closing down separately. For Corporation tax this is just a case of informing them. If you are VAT registered you will need to complete a VAT 7 form to deregister for VAT. HMRC will let you know the date that you will be deregistered from. A final VAT return will need to be completed taking into account anything remaining within the business.
If you are likely to want to trade through the business again you can make your company dormant. HMRC will need to be informed that the company is dormant and nil returns will be filed. Accounts will need to be filed with Companies House for each year end still. However if your company is dormant and a micro entity these can be filed by form AA02.