Dissolve company with large share capital

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Hi I would like to get advice on how to dissolve a company that has share capital of £200,000.

The company has never traded and has bank balances of approx £200,000 due to the issue of share capital.  Can they just withdraw this amount without paying any tax (I assume so because they invested this as share capital but the company never traded?)

Please advise the best way the client could withdraw the money (without paying any tax) and steps to close down the company? 

 

PLEASE DO NOT GIVE ME QUOTES!!! I AM LOOKING FOR ADVICE FOR MY CLIENT. 

 

THANK YOU 

Replies (22)

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By Tim Vane
22nd Nov 2017 17:16

"To be, or not to be, that is the question:
Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take Arms against a Sea of troubles,
And by opposing end them: to die, to sleep
No more;"

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Replying to Tim Vane:
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By jamestuck14881
22nd Nov 2017 17:20

Sorry I do not understand?

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Replying to jamestuck14881:
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By Wanderer
22nd Nov 2017 17:22

jamestuck14881 wrote:

Sorry I do not understand?

He's given you a quote!
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Replying to Tim Vane:
paddle steamer
By DJKL
22nd Nov 2017 18:24

"perchance to dream" was always my favourite bit, but do prefer the stirring bits from Henry V, " We few, we happy few, we Band of Brothers"

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By Wanderer
22nd Nov 2017 17:22

jamestuck14881 wrote:

Can they just withdraw this amount without paying any tax (I assume so because they invested this as share capital but the company never traded?)

What's your basis for this assumption?
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Replying to Wanderer:
Portia profile image
By Portia Nina Levin
22nd Nov 2017 17:26

To be fair, they could just draw that amount if they wanted to.

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Replying to Portia Nina Levin:
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By jamestuck14881
22nd Nov 2017 17:33

Thank you Portia, what would be the journal entries.

credit - cash
debit - share capital (Bringing it to nil as they will close company?)

Would this attract any tax

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Replying to jamestuck14881:
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By Portia Nina Levin
22nd Nov 2017 18:02

Those entries seem about right. It will only attract tax if you don't go through the proper procedure.

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Replying to Wanderer:
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By jamestuck14881
22nd Nov 2017 17:34

All the company has done is invested into the share capital and now they do not want to go ahead with the business so they want to withdraw their money back and close the company?

Could you recommend how this should be done?

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Replying to jamestuck14881:
paddle steamer
By DJKL
22nd Nov 2017 18:54

No expert but suspect they may need to appoint an insolvency practitioner to liquidate, and pay his fee.

See this:

http://www.rossmartin.co.uk/companies/ceasing-trading/132-ceasing-tradin...

Have never seen a private company issue that value of shares at outset and not proceed, maybe someone else knows a cute way out, but seems t o me they may have taken poor advice at outset.

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Replying to DJKL:
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By Portia Nina Levin
22nd Nov 2017 23:37

You obviously haven't come across this new-fangled capital reduction that's all the rage in the big cities south of Hadrain's Wall.

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Replying to Portia Nina Levin:
paddle steamer
By DJKL
23rd Nov 2017 14:54

Never done one, though was aware they existed , but like my knowledge of the Loch Ness Monster only as a myth or legend.

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Portia profile image
By Portia Nina Levin
24th Nov 2017 10:52

God it feckin' annoying when you have to keep scrolling past this!

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Replying to Portia Nina Levin:
paddle steamer
By DJKL
22nd Nov 2017 18:34

The second line refers to Craig Gordon tonight, if they are lucky.

The thing I really appreciate about Coleridge's work is that the poem evokes the never ending travails of the cursed Seaman, which were echoed by us in Ms Wallis' second year English class as we worked our way through the bl**dy piece.

I was really grateful that Coleridge, awakening from his drug induced slumbers, could not remember the entirety of Kubla Khan.

Still, could be worse, Wordsworth's Prelude don't half go on, as does Milton in Paradise Lost, but at least with Milton I actually enjoyed the poem. (He might also have done better in goal than Gordon)

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Replying to Portia Nina Levin:
Flag of the Soviet Union
By thevaliant
23rd Nov 2017 01:44

There isn't a lot of Soviet Union in that post.

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Replying to thevaliant:
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By Mr Trellis of N Wales
23rd Nov 2017 14:30

When it comes to verse, I bet you're a fan of Mayakovsky.

http://crimson-compass.tumblr.com/post/56866500409/conversation-with-a-t...

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Replying to Portia Nina Levin:
By SteveHa
23rd Nov 2017 14:43

Can we have Poe's "The Raven" next, please.

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Replying to SteveHa:
paddle steamer
By DJKL
23rd Nov 2017 14:47

Maybe following encapsulates our current relationship with HMRC re tax planning,

"OF MAN’S first disobedience, and the fruit
Of that forbidden tree whose mortal taste
Brought death into the World, and all our woe,"

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Replying to SteveHa:
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By Portia Nina Levin
23rd Nov 2017 14:54

All that tap, tap, tapping gets on my [***] I'm afraid.

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By pumnoo
23rd Nov 2017 21:40

Tax technical point

"repayment of share capital is not considered as income distribution (i.e. dividend)". [£25,000 limit is irrelavent in this situation as you are not getting premium] [in other word the distribution is not being made out of retained earnings, therefore not a dividend distribution].

So it will be capital disposal.
Sale proceeds is equal to disposal prceed= nil gain
so no tax.

Procedure

Play safe and follow steps mentioned below.

1)Take out money from company bank account.
2) Make your dormant accounts and e-file to HMRC. In addition attach a covering letter informing them that you are about to strike off the company and confirm that there was no trading activity since when company was incrporated.
3)Fill the form DS01 with £10 fee and send to companies house.

After 3-4 months company will be permanently stuck off from the register.

Make sure u dont leave any money in company's bank account!!!

Job done!

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Replying to pumnoo:
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By Portia Nina Levin
23rd Nov 2017 23:49

Oh dear!

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Replying to Portia Nina Levin:
By Ruddles
24th Nov 2017 08:25

+1

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