Costs Of Not Closing A Limited Company

The cost of not closing a limited company will be typically adviser’s fees.

If a limited company that is not trading remains live and is not closed down then it will still need each year to:

• File accounts at companies house and with HMRC.
• Do a corporation tax return (CT600).
• File a confirmation statement at companies house.

Who Is Going To Pay The Costs Of Not Closing A Limited Company?

The likelihood is the directors will have to pay the costs of not closing a limited company

If as a director you are unable to undertake this work personally then you will need to employ the services of an adviser to do this work.

Whilst it may not be extensive, it could cost the company (or its owners if it has no money) a few hundred pounds each year or more depending upon who is undertaking this work. If the company has no income or assets then to avoid being fined for being in breach of company law which could result in directors committing a criminal offence for failure to file accounts the directors may need to pay these administration costs.

Alternative To No Closing A Limited Company

Dissolution or liquidation is an alternative to not closing a limited company

The alternative to the costs of not closing a limited company would be unsurprisingly to close it.

You could close it through dissolution (or it might be tax efficient to do a members voluntary liquidation if the company has more than £25,000 of assets to distribute) or if the company is insolvent via creditors voluntary liquidation. The costs of dissolution if the rules are properly complied with might be limited to a small sum as low as say £8 to strike off the company using the DS01. 

However, even the costs of creditors voluntary liquidation which could be as low as say £2,000 plus VAT and disbursements might be cheaper than keeping the company in the register and year in and year out incurring those administration fees.