Article
Is your company no longer needed or nearing the end of its lifecycle? Here’s what to consider…
Article
Is your company no longer needed or nearing the end of its lifecycle? Here’s what to consider…
May 22, 2024
2 minute read
Jordan Dykes ACCA, Accounts Senior at Shaw Gibbs, provides guidance on navigating the end of your company’s life cycle and outlines the considerations and options for a company that is no longer needed.
A UK company may no longer be required once trading has ceased or, alternatively, if a company has never traded and is no longer needed.
There are various options and points to consider when a company has come to the end of its useful life. These may include closing down the company and striking it from the register of companies, or for the company to be preserved in a dormant state.
A company may be considered dormant if there are no significant transactions in the financial year. Significant transactions exclude Companies House filing fees, late filing penalties and money paid for shares on the company’s incorporation. It may help to minimise ongoing costs and transactions by closing any active bank accounts to avoid the incurring associated bank fees.
Where a company had previously traded but has now ceased, the directors may wish to keep the company open but in a dormant state. The decision to keep the company will depend on various factors such as the value of any remaining assets, whether the company has any trading losses which could be utilised in the future, and the ongoing compliance costs of keeping the company open.
By keeping a company dormant it is effectively entering a form of hibernation whereby the company name and trading history can be preserved, and the company can recommence trading at any point in the future.
Alternatively, the directors may decide to close the company permanently. If the company is solvent, this could be done through appointing a liquidator to carry out a solvent liquidation or, if appropriate to do so, through an informal striking off application.
When striking off a company, it is important to consider the position of the company’s reserves and if there are any non-distributable reserves that may need to be understood and appropriately treated before closing the company.
There are also tax considerations for the company’s shareholders when closing a company down.
How we can help:
If you have any questions regarding the above or want to find out more about handling a company that is no longer needed and explore the options available, our dedicated accounts team at Shaw Gibbs would be glad to assist. Please contact Jordan Dykes for further assistance or information or alternatively, get in touch with your regular Shaw Gibbs contact.
Need expert advice?
Speak to an expert for advice on
+44-1865 292200 or get in touch online to find out how Shaw Gibbs can help you
Email
info@shawgibbs.com
Need expert advice?
Speak to an expert for advice on
+44-1865 292200 or get in touch online to find out how Shaw Gibbs can help you
Email
info@shawgibbs.com