Striking off - how to get the cash out first?

Striking off - how to get the cash out first?

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Looking to close a company, I've gone through a process of payimng off suppliers, collecting debtors, ceasding to trade then declaring and paying dividends and now the  company in question has £3,100 in cash, £3,000 share capital and £100 of retained earnings. The shares are owned by a 100% parent company B. If A can't declare any further dividends to B (except £100, because otherwise, as I understand it, it would be an illegal distribution), how do I get the last £3,000 of cash back to the parent B before striking off A? I can't find mention of this anywhere. Co. House says the cash reverts to Crown. What?

Any help appreciated.Thx

Replies (5)

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By bernard michael
25th Oct 2012 11:42

Why not a management charge from B to A?

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By Cloudcounter
25th Oct 2012 12:05

Most people

would just pay it as a capital distribution, bearing in mind that the company is to be struck off anyway.  That's effectively what happens to all share capital when a company is struck off informally.

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By tonycourt
25th Oct 2012 15:05

Capital repayment

Exactly as cloudcounter says - the distribution of the remaining capital is permitted before dissolution of the company and will be capital and reserves (£100) from a Companies Act point of view. And for tax purposes will wholly count as a capital distribution to the parent company.

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By blok
25th Oct 2012 16:14

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The £100 can be a dividend from income and the £3,000 is a return of capital.

I think technically £3k does belong to the crown because a return of capital is illegal ? but the crown doesn't chase this. 

Is there not new legislation that sets the limit on whats allowed to be distributed without involving a liquidator (not the £25k tax limit).  maybe someone can confirm the excat position?

 

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By rohit
26th Oct 2012 13:34

Solvent or insolvent

Solvent companies can be liquidated without the need for formal liquidation & the distribution is less than 25k then treated as capital as stated by other commentators...

Members' voluntary liquidation - where the shareholders of a company decide to put it into liquidation, and there are enough assets to pay all the debts of the company, i.e. the company is solvent.

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