Company dissolution in the UK
In the UK relating to the registration and dissolution of the company is carried out in different ways, as there are quite a few different jurisdictions. The topic of creation and dissolution of a firm is quite relevant, especially concerning the United Kingdom, for the reason that this state is very strongly developed in the field of business and a lot of people want to create their own business on its territories. In this article the information will be related to the dissolution of the firm, because when the termination of the company, it is necessary to understand how to do it correctly.
First of all, it is worth saying that the dissolution of the company in the United Kingdom, compared to its creation, is also a very important task. Unfortunately, the topic of business dissolution is quite relevant, as many people do it completely wrong, leaving the company and leaving, while thinking that everything will work out without their participation, because if the taxes are not paid, reports to the registration chamber are not filed, then the company will be dissolved by itself. However, this is not the case, many people simply do not understand the full responsibility. After a while, as the company will be abandoned in this way, there will be many problems that could have been avoided when closing the company according to all the rules.
So why shouldn’t a public company be abandoned, and what will be the consequences?
A company that was officially registered in the United Kingdom, but for its own reasons has exhausted itself or has simply become unnecessary to its owner must necessarily be closed. However, as it happens now, many businessmen simply abandon their companies abroad, apparently thinking that without paying taxes and filing reports, everything will resolve itself. Maybe in another country this could work, but the United Kingdom is not considered offshore, which makes things different here.
The fact is that if the firm is not active, the jurisdiction is still reportable. In the United Kingdom, companies that have been registered must file an annual report, but if this is not the case, then over time, the competent authorities will pay attention to the abandoned company, which will soon turn not only numerous troubles, but will be threatened with liability. It is worth noting that in this case, the nominal service will not help anything, as at the end of time, the nominee director of the firm leaves the post of director and all responsibility immediately passes to the owner.
It is also worth noting that the firm, which turned out to be abandoned by the owner, is still considered to be operating. And this in turn means that creditors can lay claim even after several years, as the company has become inactive.
An important point for every entrepreneur now is the introduction of an active struggle for transparency in financial activity. Now all is also a relevant issue of automatic exchange of information, which in turn is gaining quite a lot of power in principle around the world. In the event of such a situation, we should not forget about the chances that the company abandoned by its owner will not be remembered by the fiscal authorities. And this is not the best outcome for absolutely any beneficiary.
So, the bottom line is that if a company has become unnecessary for certain reasons, then it is imperative to liquidate it, so as not to get yourself into a lot of trouble.
Rules and stages of company dissolution in the United Kingdom
The concept of dissolution of a company includes a set of measures, as a result of which the legal entity or partnership ceases to exist, and at the same time the rights and obligations of the enterprise cease to exist.
Company dissolution in the United Kingdom can be carried out in one of three ways:
- According to the resolution of the board of founders.
- Removal from the Register.
The option of agreeing to the resolution of the board of founders is often practiced. The owners of the company hold a board where they decide on dissolution.
The method with the pronouncement of bankruptcy of the company is possible only if the company is recognized by the court as financially insolvent. The beginning of such a process is considered to be the publication of the announcement of financial insolvency and the appointment of a new directorate, which must either find ways to stabilize the situation, or optimally dispose of the assets in order to close the maximum liabilities of the bankrupt company.
The third option, concerning the register, is exclusion. It is relevant if a company has been passive for quite a long time. It can be compared to the “natural death of the company”, but drawn up according to all the rules, so that no questions arise to the owners later on. The founder, whose company has been removed from the register of companies, is handed over a special certificate. Exclusion from the register leads to the fact that the owner will not be able to conduct activities, represent his rights in court, to perform management, etc. But if, in relation to such a firm, outstanding obligations come to light, then interested parties may initiate the reinstatement of the firm. But this is possible to do in the legally prescribed terms, until the company finally ceases to exist.
Nuances in the liquidation of the company
If the entrepreneur is faced with a situation in which he needs to liquidate the company, he needs to take into account certain points:
- Repayment of debts. And the company must not have encumbrances neither to the state, nor to counterparties. Even if you miss this fact to avoid problems and at the same time no one will notice that, as already mentioned, even when the company is liquidated, interested parties may apply for resumption to begin the proceedings because the obligations have not been fulfilled.
- Submit the final accounts to the registration and tax authorities. And the report must have a notation that it is the last report.
- Close all corporate bank accounts in order to avoid any financial debts.
- The intention to dissolve the company should be made public in the British press.
- Pass a waiting period during which claims may be made against the company by creditors. The official time limit for accepting claims is 3 months. At this time, such a company will have a status in the National Register, which will appear until the official notification that the company has been struck off the register comes out. In principle, this is the final dissolution, as a result of which, on the website of the state register, the name of the company will appear next to the name dissolved.
Can a company that has already been dissolved be reconstituted?
Sometimes it happens that after the dissolution of a company, the owner either has the finances to continue running the company, or other reasons, but the company as such no longer exists. But is it possible to resume it? In principle, it is possible to restore a liquidated company. But it can be even more difficult than dissolving it or registering a new one.
Restoration of the company is done through the court. The owner should provide irrefutable evidence that he needs to return the previously liquidated company. The success of the procedure depends on many factors. Frankly speaking, restoring a company after dissolution is a costly and complicated operation, in most cases extremely unprofitable in terms of finances.
Therefore, it is worth saying that the decision to liquidate a company should always be considered and weighed, so that you do not try to get it all back.