Has anybody who worked as an independent contractor, recently ceased and closed down their limited company? One director/employee, no debts, cash still in the company bank a/c, no assets, that sort of thing.
What process did you use? Members Voluntary Liquidation?
Did you use a liquidation practitioner?
If yes, roughly how much did it cost and any recommendations?
Thanks for any tips.
Just ask your accountant to wind up the company with Companies House.
Ref costs, for me it was just regular accountancy fees for the final years figures plus a small charge from CH.
Closed down my Ltd company about ten years ago. Not IT/ Contract based but one director/ employee and similar scenario regarding no debts, cash in bank etc.
As you have no Creditors, Liquidation (voluntary or otherwise) can be avoided. I opted to dissolve. Simple process to strike the business of the Companies Register. Think the fee was £10.00 and there was a requirement to file an application with Companies House. From memory basic criteria was the business had not traded for three months. I closed my business bank accounts in the interim.
Received notice from Companies House that the form had been completed correctly. Second correspondence to indicate the intention to dissolve had gone in the London Gazette to ensure no potential creditors come forward to object. Assuming they don’t a final entry is made in the LG to confirm the business has been “struck off”.
All quite painless.
It depends how much cash you have left in the company and the reason for closure. If you have good assets that you can't dividend out over a couple of years and don't want to work in the trade again then an MVL makes sense as can use "entrepreneurs relief" and pay 10% CGT on the first 1m. But to do an MVL incurs fees and you lose control of the company bank account from the moment the liquidation starts until its finished.
I think about 50k assets is/was where an MVL made sense but as others have said check with your accountant but if decent cash left after paying everyone then MVL is the best way to take advantage of the CGT tax break.
Maysie, RLE and MB2, many thanks for your replies. Very helpful to my understanding of the route to take, and as mentioned it looks to be dependent on what's left in the company and if ER (now BADR, I think) is applicable.
Yes, I voluntarily wound up a small Ltd company about 6-7 years ago. I wanted to benefit from entrepreneurs relief and my accountant recommended a firm to do the work.
I do remember being astounded at the fees they charged - way more than my accountant but they did do absolutely everything, and any time I had a question or a slightly unusual query they handled it.
Thanks, it looks like I will have to go down the MVL route using a licensed practitioner. Pay the accountant for a final set of accounts, pay an insolvency practitioner and take the balance less ER/BADR.
I had another company in around 1990 for a short period whilst I was contracting in oil and gas, but have absolutely no recollection of what I did then, although there weren’t any funds left.
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As some have said above, you will need to appoint a liquidator and go down the MVL route if you have no debts.
You will benefit from only paying 10% tax to extract the funds in the business. The accountant will also need to create the final accounts.
I did this a couple of years ago and used a firm recommended by my accountant. I seem to remember they charged just under £2k. Went smoothly but the statutory process took a while.
There is a simple and cost effective method.
https://www.gov.uk/strike-off-your-c...sponsibilities
I recently went through the exercise. I have some notes on the process. If you pm me I can send them to you.