Winding up a Company


J

John Crook

Where a company is to be wound up how can the shareholders get remaining
cash out of the company in a tax efficient manner?

I guess dividends are good. What about repayment of share capital?

Any thoughts would be appreciated.

John
 
Ad

Advertisements

E

Edward Cowling London UK

John Crook said:
Where a company is to be wound up how can the shareholders get remaining
cash out of the company in a tax efficient manner?

I guess dividends are good. What about repayment of share capital?

Any thoughts would be appreciated.
Dividends from an insolvent company, now I've heard it all.

I suspect this message is a wind up, but just in case you really are
genuine I'll remind you of a couple of things.

1. No matter how 'friendly' your liquidation people may be they aren't
going to risk loosing their license for you. They also have a duty
to
look at the honesty of the accounts and the way the company was
run.

2. You have to face the creditors at a meeting. Are you happy to meet
Fred who you've known for years and still owe 2 grand for building
work, if he knows you've just drained every cent of cash out of the
company before ceasing trading ?

I don't know the details of your business or the reasons behind the
winding up, but I would recommend you seek professional advice before
taking any action.
 
J

John Crook

I posted the original request. This is an IT consultant who has decided to
go the employed route and wants to close his company. There is cash sitting
there and he wants it out. He wants to wind the company up but I may suggest
he just lets it go dormant. The cash reserves cover the P&L reserves. Share
Capital is only £50.

John
 
Ad

Advertisements

P

Paul Garbett

John Crook said:
I posted the original request. This is an IT consultant who has decided to
go the employed route and wants to close his company. There is cash sitting
there and he wants it out. He wants to wind the company up but I may suggest
he just lets it go dormant. The cash reserves cover the P&L reserves. Share
Capital is only £50.

John
I would normally use ESC C16 and get the cash out as a gain with Business
Asset Taper Relief, so long as the cash isn't ridiculous compared to assets.

In such circumstances a dividend up to top of BR band for year is best (as
that is tax paid) and then capital payment via ESC C16 for the rest.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads


Top