Should I close my business or put it on hold?

Choosing between permanently closing your business or making it inactive is a big decision. Before you take that move, make sure you understand the implications of each action. We're here to assist you.

Another door opens as one closes. If you're thinking about starting a new business, we can help you get it off the ground. We can help you with the paperwork needed to start your future business in the UK, as well as with bookkeeping and accountancy.

What Exactly Is A Dormant Business?

Your company may be termed dormant if it did not engage in significant transactions throughout the financial year, according to Companies House in the United Kingdom. Simply put, if your company is dormant, it implies it has not conducted any business operations but is still listed and searchable on the Companies House Register of Companies.

The following notable transactions are not included in this list:

• Fees paid to Companies House for filing documents

• Accounts are subject to penalties if they are not filed on time.

• When your company was first formed, money was paid for shares.

Keep in mind that even if your business is no longer active, you must still file information with Companies House. All firms that have previously registered with Companies House are affected.

Why Should I Close My Company Instead of Making It Dormant?

The first step is to understand what it means for you and your business if you decide to leave it inactive rather than shut it down. This will assist you in deciding whether or not to pursue this option.

While there are many reasons why you might wish to take a break from running your business, it's also important to understand how dormancy might benefit you.

Save money on administration and upkeep.

Keeping a corporation dormant means you're not getting paid from any business operations that you would get if it were still active. If your firm is certified as dormant by Companies House and qualifies as a small company, you are allowed to file 'dormant company,' which do not require an auditor's report.

Corporation Tax is due and payable.

You do not need to pay Corporation Tax or file another Company Tax Return for limited companies once you have informed HM Revenue and Customs (Hmrc) that your company is dormant, unless you receive a notice to provide a Company Tax Return. Keep in mind, however, that you will still be required to file annual accounts.

Take a break from operating a business.

You can do the following to keep your firm alive but dormant:

• Take as much time as you want to relax.

• Retire without having to worry about business issues.

• When you're ready, hand over the corporation to your designated heir.

• Re-enter the workforce as a full-time employee.

• Take time off to look after a loved one.

• Recover from a sickness

• A sudden necessity to relocate to another country for a period of time

What is the maximum amount of time I may keep my company dormant?

There is no time limit on how long your business can be dormant. You are free to do so for as long as you like.

If you're on the fence about whether or not to restart your business, one alternative is to keep it alive while cutting your operating costs.

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