Inactive or Dormant Companies
The disadvantages of an inactive or dormant company are:
- Risks to the directors of personal fines for late filing
- Requirement for annual tax and accounting reviews
- Distraction of management time
- Incurrence of unnecessary compliance costs
Dains can help with the following simple solutions:
This is cheap and quick. However the distributing of assets to shareholders is usually treated as income and as such is subject to tax at income tax rates. If there is more than £4,000 in share capital this cannot be distributed and must be paid to the crown.
The company is kept active for investigation purposes for 20 years.
Solvent or Members Voluntary Liquidation
This is a formal procedure and by far the safest option for directors and shareholders. Distributions are treated as capital and taxed as such. The company is only kept active for investigation purposes for two years after the liquidation is concluded.
Dains Business Recovery Limited - Registered Company number 10115314. Registered office First Floor, Gibraltar House, Crown Square, First Avenue, Burton on Trent, DE14 2WE. Registered in England and Wales.
Martin FP Smith and Nicola J Meadows are licensed in the United Kingdom to act as Insolvency Practitioners by the Institute of Chartered Accountants in England and Wales. Furthermore, they are both bound by the Insolvency Code of Ethics when carrying out all professional work relating to an insolvency appointment. When acting as Receivers, Administrative Receivers or Administrators they act as agents only, without personal liability and when acting as Administrators, the affairs, business and property of the company are being managed by them.