If you have a limited liability company that is to close or has ceased trading it’s very important that you take the necessary steps to formerly dissolve the company or follow a dormant company route.
How to close a limited company in Ireland will depend on the status of the company and future plans for the company. There are three possible routes to consider when closing a limited company:
Voluntary Strike Off
The voluntary strike off route can be used to close a limited company that has ceased to trade or has never traded and have gross assets and gross liabilities of less than €150.
The voluntary strike off procedure is relatively straightforward and inexpensive and thousands of voluntary strike off’s are performed in Ireland every year.
Dormant Company Accounts
A dormant company is one that doesn’t trade and has no transactions. Despite this you are still required to file annual returns with CRO. Check our Dormant Company Accounts FAQ’s
You may want to consider choosing a dormant company route if:
- the company owes you money and may commence trading again in the future
- you plan to trade again in the near future, the cost of maintaining a dormant account will be more cost effective and less hassle than dissolving the limited company and then incorporating a new company
- you wish to use any accrued losses to offset future profits earned in the same trade and reduce your corporation tax bill
How to close a limited company through the liquidation process will depend on the status of the company. There are three types of liquidation services to close a limited company in Ireland:
Members Voluntary Liquidation [MVL] – a members voluntary liquidation may be used to close a limited company when the company is deemed to be solvent – i.e. it is able to pay off its debts, usually within a 12 month period.
Creditors Voluntary Liquidation [CVL] – a creditors voluntary liquidation may be used to close a limited company when a company with debts is unable to pay as they fall due – i.e. it is insolvent.
In both MVL and CVL procedures to close a limited company a liquidator is appointed to realise the value of the company assets to pay any creditors in accordance with established guidelines and any surplus funds are distributed to the members.
Court Appointed Liquidator – a third liquidation process comes in to effect when a creditor believes the company to be insolvent and that the ability of the creditor to recover its debts are being adversely affected by the company continuing to trade. In such cases a liquidator is appointed through the courts.
The above are guidelines on how to close a limited company in Ireland. Company strike off and liquidation will result in the limited company being dissolved.
If you need to make a decision about how to close your limited company in Ireland and would like to discuss your options in more detail please contact David at closedforbusiness.ie : firstname.lastname@example.org or lo-call 1890 256733.