Exiting your business:
Closing down
There may be circumstances in which you need to close your business down. You may not be able to sell your business, for example, if it relies too heavily on your own personal involvement or if it is performing badly. Alternatively you may want to close down an under-performing division.
When deciding whether to close down a business you should consider all the costs of closure, including employees’ entitlement to redundancy pay.
If you want to close down a company you will need to follow certain statutory procedures. There are various routes that can be adopted, such as an informal winding up or a statutory liquidation, and each method has differing legal and cost implications. You may have a choice, or your financial situation might determine the route you need to follow.
Circumstances may be such that you need professional insolvency advice and support. If so, we will facilitate an introduction to a qualified insolvency practitioner, who will try to protect you from any snares or pitfalls.
As regards the tax authorities you should:
- prepare a final set of accounts (remembering to include all the costs of closure)
- de-register for VAT, if applicable
- disclose the closure on your tax return
- pay any outstanding liabilities
We recommend that you take tax advice before ceasing to trade or closing down a company, to ensure that you minimise your tax liabilities and obtain maximum relief for any losses.
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Where next?
Within Exiting your business…
- Planning your exit
- Selling your business
- Floating your company
- Exiting a partnership or minority shareholding
- Family succession
- Tax issues
General...
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