Closing Ltd company - do I absolutely need to close my business accout as well? Closing Ltd company - do I absolutely need to close my business accout as well?
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  1. #1

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    Default Closing Ltd company - do I absolutely need to close my business accout as well?

    Hi,

    My first post, so please bear with me...


    I have a limited company which I've been using as an IT/engineering contractor for the last four years. I have had no income for the last year or so, and wish to close the company, or at least change the business type, because in about six months time I wish to start a limited company selling products online. The new company would be completely different to the existing one.

    I would like to keep, if possible, my business account because it is free as it was opened in 2007, but it would not be free if I shut it and then opened another with the same provider (Santander) i.e. for the new business in six months time.

    I think I have two options, and was wondering if either of them are advisable or possible under HMRC/banking rules.

    1. Close the limited company, keep a zero balance in the bank account, then open a new limited company, and hopefully use the existing bank account for the new limited company. Is it, indeed, absolutely necessary to close a bank account when closing a limited company?

    2. Make the existing limited company dormant, keep a zero balance in the bank account, then in six months time change the company's name and use the existing account. In other words is it better to use a new limited company for the new business, bearing in mind it would be selling completely different things?


    Of course, I could close the business and close the account. But I'm trying to avoid the latter, and if possible avoid closing the business to avoid having to set one up again (although that's not a big problem or expense).

    I find advice from accountants seems to vary, so any help would be really appreciated.

  2. #2

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    1. As you describe it is simply not possible. The account will get closed automatically when the co is struck off. Any funds in it are seized (but can usually be got back with some hassle).

    2. There is nothing stopping you changing the name of the company and it changing direction, but ensure the articles allow the new direction, will need a meeting to change them if not.

  3. #3

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    Quote Originally Posted by ASB View Post
    1. As you describe it is simply not possible. The account will get closed automatically when the co is struck off. Any funds in it are seized (but can usually be got back with some hassle).

    2. There is nothing stopping you changing the name of the company and it changing direction, but ensure the articles allow the new direction, will need a meeting to change them if not.
    Thanks for your reply ASB, much appreciated.

    On your first point - that's the first I've ever heard of such a thing, all the articles I've read about closing down a limited company say you have to shut down the bank account yourself (rather than it being done automatically), if that is what one chooses to do. Although, admittedly the articles are talking about shutting an account at a point well before the co being struck off, so maybe you're right... I'm sure you are. If anyone else can confirm that, let me know...

  4. #4

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    Quote Originally Posted by ASB View Post
    1. As you describe it is simply not possible. The account will get closed automatically when the co is struck off. Any funds in it are seized (but can usually be got back with some hassle).

    2. There is nothing stopping you changing the name of the company and it changing direction, but ensure the articles allow the new direction, will need a meeting to change them if not.
    You're right of course. I just did some more research (which I didn't find before I created this thread) on the Companies House website.

    Thanks again ASB.

  5. #5

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    If the new company does not need to be VAT registered, then either start again or deregister from VAT now.

    If the new company would need to be VAT registered, but would be on FRS, then you need to weigh up whether the additional 1% discount in the first year is worth the hassle of shutting down and starting afresh.
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  6. #6

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    When a company is stuck off at Companies House, the funds held in any bank accounts should be transferred to the Treasury Solicitor.

    Some banks are better than others at doing this, so if a company is closed and the bank account remains open, this is due to a failure of the bank rather than it being the norm.

    As for changing the business activity, most modern companies have a 'general commercial' clause, and this allows the company to undertake any business activity, so there is no need to notify anyone that a change of business has taken place.

    Alan

  7. #7

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    You wouldn't believe the amount of things people forget when closing down companies. When I worked in Companies House as a Compliance Officer. I had one woman ring me up and ask about a company that had been closed. It turned out the company had purchased a clubhouse worth 80k and it had become property of the crown as they had forgotten about it till it came to selling it.

  8. #8

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    Default Ensure the zero balance!

    I've had a handful of clients who have forgotten to make their final payment (mainly dividends) to themselves and the bank has closed the account and moved the money to HM Treasury (as is correctly pointed out above). In one case the Director had to pay £1,500 to the Treasury Solicitor to get the company 're-instated' to get their money back. Painful and costly!

    Ensure the bank balance is nil if you apply to strike the company off at Companies House.

  9. #9

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    Quote Originally Posted by Andrew at Boox View Post
    I've had a handful of clients who have forgotten to make their final payment (mainly dividends) to themselves and the bank has closed the account and moved the money to HM Treasury (as is correctly pointed out above). In one case the Director had to pay £1,500 to the Treasury Solicitor to get the company 're-instated' to get their money back. Painful and costly!

    Ensure the bank balance is nil if you apply to strike the company off at Companies House.
    We had a user on here who closed it with 20k left in it last year. Went through how to request the company be re-opened by CH to get access again. He never came back with the result in the end?
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  10. #10

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    Quote Originally Posted by northernladuk View Post
    We had a user on here who closed it with 20k left in it last year. Went through how to request the company be re-opened by CH to get access again. He never came back with the result in the end?
    You can reinstate a company but you need a court order and generally the rough cost of reinstating a company is around 2k or it was when I worked at CH. So for 20k I'd definitely do it

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