If for any reason you want to close down your limited company, there are a number of things you have to do. The full details can be found on the Companies House website but the basic process for the average freelancer’s small business is as follows.
Tell People
Before starting the process to close the company, you need to inform your shareholders, if you have any and any outstanding creditors, who may object to the company being closed.
Pay your debts
Ensure all outstanding debts and routine payments have been cleared in full.
De-register for VAT
If you are registered for VAT, you need to inform HMRC using Vat Form 7
Finalise the payroll
Run the final payroll for yourself and any other people you employ (and pay them). You will need to issue P45s to all employees, including yourself, and submit a P35 to HMRC
Finalise the Accounts
Prepare a final set of accounts for the company and submit them to Companies House. Clearly you should do this a few months after the closure date to ensure all monies are fully accounted for.
Pay your Corporation Tax
This is due no more than 9 months (and one day) after the closure date. The company will not be closed until all tax liabilities have been settled with HMRC
Pay out the Remaining Funds
Assuming there is any money left in the company at this point, it should be distributed to the shareholders either as a dividend or as capital under the provisions of ESC 16.
Strike off the Company
Thee months after the closure you should apply to Companies House to have the company struck off using Form 652a for a fee of £10.
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Image: Organized by Uwe Hermann
