I’m no longer contracting. What do I do with my limited company?

I’m no longer contracting. What do I do with my limited company?

Contractor asks

I’ve taken a staff position and won’r be using my limited company any more. What should I do with it?

Acumenica answers:

Two options: keep it going or close it down.

1 - Keep the company open in a non-trading status.  This is recommended if there is a possibility of you returning to contracting through your own company within 2 years.  Our monthly fees in this case would reduce to £49 + VAT.  

2 - Close the company.  This is likely to be more cost effective if you do not expect to return to contracting through your own company within two years.

What is the process to close my company?

The following sets out the steps we need to take to have the company dissolved, along with the expected timescales.What we need to do:

  • Notify HMRC that the company is being wound up. This will cancel all HMRC registrations for your companyPrepare, submit and pay final VAT return (if applicable)
  • Prepare final accountsPrepare, submit and pay final Corporation Tax returnDistribute funds to shareholdersSubmit form DS01 to Companies HouseTimescalesOnce the final payments have been made/received, you should ensure FreeAgent is up to date, then email me confirming the closing bank balance. We will prepare the accounts, final returns and advise you of liabilities within 2 months. At that time we can also advise how much you can withdraw from the bank account, and then this can be closed.
  • We can then file DS01 - Companies House will dissolve the company 2 months later if no cause is shown to the contrary.FeesTo process and manage the above, our fee is £499 plus VAT. Note, the closure fee is in addition to a final monthly fee to cover our 21 day notice period, so the sooner you give the go ahead for the company closure, the sooner the monthly fees will cease.

This process applies only to solvent companies with less than £25,000 of distributable assets. If the company has more than this, the process is different, more complex, and more expensive!