What happens if I don't officially close a company that has ceased trading?

Iwantland

I registered a limited company in April of last year and we only traded for about 2 months before we ran out of money. I have been filing all VAT and tax returns and also filed the first annual return with the CRO.

I can't seem to figure out how to close the company so what would happen if I just stop filing returns? Would I be personally liable for anything? could I be prosecuted?

I am the propriety director and there are 2 other directors.

Iwantland

We literally have no money to do anything, like 0, I tried filling out form H1-G1 Special Resolution for voluntary strike-off and haven't heard anything back, I sent a request to Revenue for a letter of no objection and they sent me back a really confusing letter saying they needed more information (tick box list) but can't tell if a tick means they need it or have it..

Iwantland

And on top of that I think I delete our accounting records off my computer

pilly

I've asked our accountant about this before and he says just let it be struck off. As long as there's no tax outstanding it's fine.

Lockedout2

pilly wrote: »

I've asked our accountant about this before and he says just let it be struck off. As long as there's no tax outstanding it's fine.

That's terrible advice. If you want to be in business you need to keep your record clean. You will never know what will happen in the future a big contract comes up and you are rendering and someone raises the issue of you being a director of a company that was struck off.

If the company has no assets or liabilities then the voluntary strike off is the way to go.

pedroeibar1

Are you sure s/he is a qualified accountant? Lockedout2 above is correct. That advice is legally incorrect and plain stupid. If you want to continue in business it is perceived by most suppliers as a credit ‘blemish’ if you are linked to a struck-off company.

As soon as you fail to file accounts on the company’s Annual Return Date you start incurring late filing fees at €2 per day after a 28 day window. When your company is eventually struck-off, you personally become liable for its debts. Should you want to close it down properly after strike-off you have to apply to the High Court to have it restored to the list, and then go through the process, including paying late filing fees plus heavy legal costs. Voluntary strike-off is not expensive – even if you get a professional to do it for you it’s about €500-600 including the cost of the newspaper advert.

That said, this is Ireland so there is little or no enforcement against directors who fail to do their jobs properly, but there is growing emphasis on the area now and talk of enforcing the fines as a means of collecting cash for State coffers.

Ted001

pedroeibar1 wrote: »

Are you sure s/he is a qualified accountant? Lockedout2 above is correct. That advice is legally incorrect and plain stupid. If you want to continue in business it is perceived by most suppliers as a credit ‘blemish’ if you are linked to a struck-off company.

As soon as you fail to file accounts on the company’s Annual Return Date you start incurring late filing fees at €2 per day after a 28 day window. When your company is eventually struck-off, you personally become liable for its debts. Should you want to close it down properly after strike-off you have to apply to the High Court to have it restored to the list, and then go through the process, including paying late filing fees plus heavy legal costs. Voluntary strike-off is not expensive – even if you get a professional to do it for you it’s about €500-600 including the cost of the newspaper advert.

That said, this is Ireland so there is little or no enforcement against directors who fail to do their jobs properly, but there is growing emphasis on the area now and talk of enforcing the fines as a means of collecting cash for State coffers.

A company can be restored within a year of being struck off by filing the relevant forms at the CRO and the strike off process will not begin until the last AR is circa 13 months late. There is significant cost however to restoring a company in this position as it will need a number of audits.

I would also like to reinforce your point regarding enforcement against directors who do not do their job properly - I think the new Acts are lining up the law to deal with this and it's only a matter of time before enforcement of these types of things starts to take place.

mneylon

Every directorship is recorded so if you don't close down this company cleanly there'll be a record of it still hanging around years later. That might not seem like a big problem for you now, but it could come back to haunt you.
As others have said above there are ways to close a company cleanly. I've also found that staff at a lot of these agencies (CRO etc.) are usually very helpful if you get them on the phone.