By Andrew Lambe, 10th July 2012
In the current economic climate, we are, not surprisingly, seeing more companies in Ireland being closed down than companies being registered. For example, in the first week of July 2012 there was 200 limited companies registered, however, 523 company closed their doors. The vast majority of these are ‘Involuntary Strike-Off’s’, whereby the company’s have been struck-off for non-filing of Annual Returns with the Companies Registration Office (CRO). This can potentially leave a Director open to legal action by the Director of Corporate Enforcement, especially if this happens more than once.
If you have a company that you no longer require, it is very important that it is closed down properly. The cost is tiny compared to the legal costs of defending an action by Director of Corporate Enforcement for non-compliance. Granted, it is unlikely due to the fact that there are literally thousands of non-compliant Directors and the resources to prosecute are scarce, but nobody wants a skeleton is their closet!
Voluntary Strike-Off – The cheapest and easiest way to close a company
Once the company has its annual returns up to date, and hasn’t traded or has a zero balance sheet (i.e. assets = liabilities) then it can apply for a Voluntary Strike-Off. The cost for this is only €289+VAT so it is money well spent. For more information on this process please see Voluntary Strike Off
If you are in the enviable position of having a company with significant assets (more than €20,000 in the bank) and you wish to cease trading, then a ‘Members Voluntary Liquidation’ may be the best route. This is because it is more tax efficient to liquidate the company and pay capital gains at 30% than it is to put through salary and be taxed at up to 52%. Please contact Company Bureau for further details and a quotation on this process, or visit our Liquidations page.
If a company has more liabilities than assets then liabilities then a Compulsory Liquidation becomes necessary. This usually happens as a result of a winding-up order on the instruction of a court on foot of a petition from a creditor. If the Directors conducted their affairs reasonably well, then it is unlikely a judge will ‘lift the veil of incorporation’, however, if the Director/s have traded fraudulently or negligently then they could be disqualified as Directors and/or fined and/or ordered to pay back creditors personally.
Sole Trader/Partnership/Business Name
When a sole trader or partnership wishes to close their business, first they need to ensure that all their tax affairs are in order and their tax returns with Revenue are up to date. Once this is done a ‘cessation of business name’ form can be filed with the CRO to close the business.
If the business is insolvent, then this can result in bankruptcy proceedings against the sole trader/partners as this form of business does not have limited liability – Unlike a limited company.
For more information on how to close a company in Ireland, please don’t hesitate to contact Company Bureau on 01 646625Contact us now for further details