Close company with debts only to me

I'd like to know what the best way of closing a company is when the debts are only to the director

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I am the sole director of a company with debts about £600 which I have loaned to the company. No one else is involved and I'd like to close my company. What is the best and cheapest option of doing this? I've looked at gov.uk and striking off seems the best option, but the site seems to imply this is only an option when the company is solvent. I could of course convert my debt to shares but I'd also like to claim a loss on my self assessment and don't think shares would be considered an allowable loss? What is my best option?

 

Replies (10)

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By Matrix
18th Jan 2023 19:59

I would search the site. I hope you didn’t waste too much time on MTD. I guess it was worth a try.

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Replying to Matrix:
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By accountingspreadsheets
19th Jan 2023 19:20

Fortunately it was something to keep me busy during quieter times but I honestly don't know how it will pan out. Maybe worth coming back to but I highly doubt it. Thanks for the message though!

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Scalloway Castle
By scalloway
18th Jan 2023 20:38

Dissolving an insolvent company is only a problem if the debt is due to a third party who has the right to object. If you are the only creditor you can just go ahead.

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Replying to scalloway:
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By Hugo Fair
18th Jan 2023 21:29

True ... but I don't understand OP's comment that "I'd also like to claim a loss on my self assessment" - how?

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paddle steamer
By DJKL
19th Jan 2023 00:44

https://www.taxinsider.co.uk/anything-to-claim-losses-on-loans-to-traders

The OP may be thinking about s131 relief but that does not, re a loan as described, sound on point.

https://www.legislation.gov.uk/ukpga/2007/3/section/132

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By williams lester accountants
19th Jan 2023 07:32

Speak to an accountant before you are claiming a loss on your SA.

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Replying to williams lester accountants:
RLI
By lionofludesch
19th Jan 2023 09:06

Unlikely to be worth it for such a tiny loss.

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By ireallyshouldknowthisbut
19th Jan 2023 09:03

For £600, DS01, move on with your life.

No other stakeholders, so no-one is going to care.

Advice is not going to be worthwhile if your formed a company before there was any meaningful trade.

Note to self for next time, trade in your own name as losses are available easily with little paperwork, and only incorporate if your business idea takes off or your project isn't torpedoed by changes in government policy.

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Replying to ireallyshouldknowthisbut:
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By zebaa
19th Jan 2023 15:27

Re, 'Note to self'

To be pedantic, there could have been other risks, like PL, of which we are unaware, but limited liability would give some protection from. I have seen businesses run on as sole traders / unlimited partnerships which after initial great success have failed with disastrous consequences for the traders involved.

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Replying to ireallyshouldknowthisbut:
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By accountingspreadsheets
19th Jan 2023 19:24

Indeed - talk about a change of events! Thanks for the advice though in and reality - £600 would only equal about £120 tax saved so hardly significant. I guess converting to shares or somehow writing off the line would close things officially.

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