Q: I have a side business in buying and selling items related to my hobby. Things took off during lockdown and I set up a company to trade with. However, my day job has been busier than ever and I am now looking to wind up the company. I don’t have any major company debts or anything like that, but want to draw a line under matters. What steps should I take?
Dear Reader,
There are a number of ways that a company can come to an end. Firstly, the company can be voluntarily or involuntarily struck off. A voluntary strike-off can happen when there are no company assets or liabilities (at least no assets or liabilities exceeding €150), the company is not involved in litigation, and all annual accounts have been filed.
The company would need to first pass a special resolution, obtain a letter of no objection from the Revenue Commissioners, file the relevant paperwork with the Companies Registration Office, and thereafter place an advertisement in a daily newspaper. If there are no objections to the voluntary strike off, it takes effect after 90 days and the company ceases to be.
On occasion, directors allow the company to be involuntarily struck off by failing to file annual returns. This is absolutely not recommended. Failing to file annual returns is an offence under the Companies Act and may result in you and the other directors of the company being barred from acting as directors of other companies in the future, as well as any assets of the company being seized.
If you wish to wind up a company (and the company remains able to discharge its debts), you can apply for a Members Voluntary Winding Up. Alternatively, if the company is unable to meet its debts, you can apply for a Creditors Voluntary Winding Up. In either case, a liquidator will be appointed.
It is likely in the circumstances that you outline that you will be able to proceed by way of a voluntary strike-off, but you should ensure that all company accounts are up to date and the relevant returns filed, and that there will be no further stock remaining in the name of the company.
There are potential cost and tax implications of whatever options are available to you. You should consult closely with your solicitor and your accountant in this regard.
