Sarah Bradford explores ways in which the family company may be shut down and the tax implications of each.
Many family businesses were left struggling as a result of the Coronavirus pandemic. A period of lockdown followed by the need to operate in a Covid-secure manner may mean that the business is no longer viable. Where this is the case, the decision may be made to stop trading and close the family company down.
There are various ways in which a company may be closed down. The options will depend on whether the company is solvent (i.e. able to pay its bills) or not. Alternatively, the company can be left to become dormant.
Closing a solvent company
Where the company is solvent and can pay its bills, it can be closed by applying to have the company struck of the Register of Companies or by going down the member’s voluntary