By Andrew Lambe, 8th August 2013 (Updated 08.07.2025)
We are frequently asked by clients, “Why should I pay to close down my company if I don’t need it? It will be struck off anyway if I do nothing.”
While this may be true, Directors of these companies are seen to be negating their duties and responsibilities under the Companies Act 2014 by not availing of the option to voluntarily strike their company off the register. In doing so, they may face some serious consequences for burying their head in the sand and doing nothing!
How Can I Close My Company Properly?
If your company has less than €150 in assets and/or liabilities and all Revenue and Companies Registration Office returns have been filed up to date, it can apply for Voluntary Strike-Off.
Here is what is required before commencing the voluntary strike off:
- Closing the Company Bank Account. If the account is not closed, any funds in the account will be frozen when the company is struck off
- Filing of any outstanding Annual Returns to the Companies Registration Office. This must be done before the VSO process can begin.
- Filing of all outstanding tax returns to Revenue and deregistering the Company for taxes
- Ensuring the Company has no assets or liabilities with a value of over €150
- Ceasing any business names registered to the Company.
Voluntary striking off your service can be done quite cost-effectively, compared to dealing with hefty penalties or legal action in the future if the company is not closed properly. For example, Company Bureau charges €350+VAT for the voluntary strike off application service, including the national daily newspaper notice.
For more on this process and how to avail of our support, see our Voluntary Strike Off Service.
However, if the company cannot bring its assets and liabilities below €150, it cannot apply for the voluntary strike off. In that case, the company has two options: Members’ Voluntary liquidation (if solvent) or Creditors’ Voluntary liquidation (if not solvent).
What Happens if I Do Nothing?
If you fail to properly close your company and do not make the mandatory annual return filings with the CRO, the CRO will move to strike the company off the Registrar for non-filing of annual returns as required by Section 343 of the Act.
Companies can also be involuntarily struck off for failure to file the Form 11F with Revenue, which is required to deliver under section 882 Taxes Consolidation Act 1997.
Furthermore, with the change to the Companies Act 2014, the Register of Beneficial Ownership has adapted the enforcement process to include the option to notify the CRO and request strike off for non-filing of beneficial ownership information.
If the company is not compliant with the above, the CRO will issue a reminder email or letter to non-compliant companies, and if the filings are not being brought up to date, they will issue a strike-off notice sent to the company’s registered office. In the notice, they will state the grounds for strike-off and what needs to be done to avoid it. From when the notice is issued, you will have approximately 8 weeks to bring the company back into good standing; otherwise, the company will be dissolved.
What are the Consequences if My Company is Struck Off the Register?
As previously mentioned, it is your legal duty as a Director to dispose of a company properly, and not doing so is a statutory offence. All directors must be aware of the risks they face should they choose not to properly close their company.
The risks include:
- Loss of limited liability — Shareholders can become personally liable for company debts if the company continues to trade after dissolution
- Company assets become property of the State
- Directors can face prosecution under the Companies Act 2014, with potential:
- Fines
- Disqualification from acting as a Director or company manager for up to 10 years
- High Court proceedings initiated by the Corporate Enforcement Authority (CEA)
Even for dormant companies with no liabilities, directors have a legal obligation to properly dispose of the entity.
OK, This Sounds Scary, but How Likely is it to Happen?
The CRO do pick out a few people every year to prosecute. For example, the directors of a company called ‘Cautious Trading Limited’ were picked out and prosecuted. It may have been because of their name – We don’t know! However, we believe that they are actively pursuing:
- Directors of companies with significant debts
- Repeat offenders – Directors with a history of involuntary strike-offs
- Cases where companies ignored creditors or Revenue obligations
Our advice is to close your company properly, especially if you have been a director of a company previously that has been involuntarily struck off. This can be a costly exercise, especially if you need to pay late filing fees to file annual returns to be able to wind up the company voluntarily. This can seem pointless, but it’s better not to have that skeleton in your closet!
If the company has traded and cannot pay its debts, you need to consult a liquidator and engage with your creditors. Examinership is a possibility if the company can be considered a going concern and gives protection to the company from creditors until the company can restructure.
For more information or to proceed with our Voluntary Strike Off service, please don’t hesitate to get in touch!
Disclaimer: This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.
