Deciding to close your business down for good is a tough decision, but one that hundreds of directors and sole traders make each year. Your business is not long financially viable; circumstances have changed, and running your business is no longer the best solution for you and your family.
Whatever the reason, there are a few key actions to consider to ensure the process runs smoothly. A good way to deal with a business closure is to use your accountancy firm both for advice and to deal with some of the important legal issues that are involved.
It must be solvent to dissolve the company voluntarily; if you want to close a business due to bankruptcy, you must take an alternative route. To finally close the business, you must make sure that you comply with several areas:
- In the three months before your application, you must not trade with the company
- You cannot have any formal agreements to pay back any of your creditors
- Your business must not be under threat of liquidation
- You must not change the company name in the three months
You should also inform HMRC that you plan to close the business and are officially no longer trading. Your accountant will also notify HMRC when they submit your final accounts that they will be the last accounts to be filed before the closure of the business. You will then be informed in the usual way of the amount of corporation tax due. When you need advice from Cheltenham accountants, consider a site such as https://www.randall-payne.co.uk
Once this amount is known, you should ensure that you pay the amount along with any other VAT or PAYE liabilities and officially close your payroll scheme down and issue your staff members with P45s. It would help if you informed all your loan providers and lease agreements and appropriately ended these. If your staff members have been working with you for more than two years, you may be liable for redundancy payments, so you need to check this with a legal professional to ensure that you are meeting your obligations.
Closing down a business can be an emotionally turbulent time, so you’ll want to have trusted professionals who can guide through the process. Keep in close contact with an accountant so all the necessary steps can be taken at the right time.
