It is often heard that contractors routinely close down their companies in order to avoid IR35 investigations: the logic is that if the company no longer exists, it can’t be investigated. Sadly, perhaps, this is not actually the case.

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.

When a company is closed down and all its various taxes and debts paid off, there is usually a sum of money left over. This money belongs to the shareholders of the company and is usually distributed to them as a final dividend.