Company voluntary strike-off

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oldnick

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a rather technical question for experts...

I wish to "strike off" my company which has now ceased trading, with no creditors and 100k in bank (which represents exact value of shares I put in some years ago.)
Full annual audited accounts will be prepared as well as no-objection letter from revenue

I note in the H 15 strike off form to be returned to CRO, that I must declare that company has no assets or liabilities.

Does this mean that i can't strike off because of this 100k share capital sitting in the bank?

Do I have to first apply to high court to reduce the 100k share capital to zero ?-and then apply to CRO for strike off.
 
If the Company has €100K in the bank, but owes you that amount, it has net assets of Nil.
 
Company needs to be formally liquidated and shareholders are then returned their capital. I know country liquidators that would complete the liquidation for say 3k plus VAT. There would be no tax as the capital return would equal your original investment. The payment would be treated as capital.
In order for the share capital to be reduced the company would have had to have traded for 3 years and the reduction would have had to be for commercial reasons for the good of the company. If you could not prove this the Revenue could tackle the distribution as income and apply income tax. The fact that money in the account is equal to the money invested may be seen as a co-incidence. As in all cases before making any decision you should seek professional advice.
 
I'm with simplyjoe on this. You can not have a company struck off if it has €100,000 in the bank.
If you contributed €100,000 for share capital then get the company liquidated get out your €100k then the company has no assets and can be struck off.
You could also sell the shares back to the company under a share buy back but you need to meet the criteria as simplyjoe has said.
 
Many Thanks ! Confirms my suspicions how crazy the system is...

Here i am having paid off every creditor, Revenue , not a cent owed. Everything finished except final audit which also costs a few grand and which will confirm nothing owed and nothing in the company except original share capital.

And yet I have to fork out thousands more to a liquidator to do, well, basically nothing.

On the other hand , many of my small-business colleagues ,also ltd.companies, have just stopped trading,done no accounts, owed money to everyone including redundancy ..and ,as they have told me ,nobody has chased them.

Crazy !
 
P.A. - Reading the rules it seems anyone unconnecting from the company can be a liquidator, so perhaps for twenty quid my milkman will do it !
 
Is it 100k in reserves or 100k in share capital? Seems a lot for share capital. Normal share capital would be 100 or 1000 but 100k is alot.

Can you not pay yourself a termination payment thereby reducing the bank balance to NIL leaving only share capital and reserves? You can then cease trading and stike off your company. Maybe you can even create a capital gains loss on your investment which can be carried forward indefinitely.

By the way, you don't need an audit if you are liquidating or striking off. You only need a liquidator if your insolvent. Also you don't need accounts as such, if you strike off before your ARD date. All you need is a Trial balance for completing a tax return for Revenue.
 
The amount of cash left over is after the maximum tax fre termination of employment payment for the two directors - me and my wife.
I am sole shareholder in this l.l.c. and the amount of cash, over 100k, is roughly equal to the fully paid up share capital.
(Amount of fully paid up share capital for travel companies is dictated by law in ireland and should be proportionate to t.o)

No other assets - and not a cent liability.

..but my auditors say I need a liquidator even after they finalise accounts. After 30 yrs of using auditors and heeding their advice, I feel odd disputing what they say -or rather the cost of it -but will probably try to do as much D.I.Y.

A real thanks to all posters so far.
 
Hi,
I know that while you had a travel agent licence you have to provide the regulator with an audited set of accounts.
But if you have ceased trading do you still need an auditor?
Ask your auditors about the company buying back your shares might be cheaper.
 
joe90 -you know much... did you do a travel agents books?

You're right -no longer need auditor for final accounts, especially as only a few months trading after the last accounts. And I can't see or understand why I need a professional liquidator to liquidate basically nothing except my shares.
Anyway will look more closely at company buying back my shares which I assume means I can go down the voluntary strike of route /



thanks for that.
 
Totally agree with Joe 90 and your final summary.

You don't need an audit or a liquator. Sounds like your advisors want some wrap up money.
 
Yes, i reckon so.
increasingly am looking at other posts about people owing money ---and I've been talking to friends who have closed their businesses ,owing a fortune to everyone inc staff redundancies, revenue etc.

After 30 yrs owing my own business iand paying every bill and tax I'm comnvuinced that the rule in ireland is ...

1 ) close the business owing money to everyone and there''s very little chance you will be pursued. I've seen so many of my fellow travel agents shut up shop without final accounts -anything . And that's the end of the matter. Sometimes a few nasty letters which they ignore...

2) try to do things 100% correctly and Revenue and every damn legal,accounting and other overpaid official will say -ah you must do this and the fee is this... and if you don't do this, we know you have money so we'll go after you..
 
In order to get the remaining 100k at CGT rate you do need to liquidate. The reason you need the last set of accounts is because the liquidator has to be able to ensure that there are no tax liabilities. Before he pays you the 100k he has to ensure that there are no other creditors. The accounts may have to be audited because a) the revenue could object to them not being audited when you have other statutory obligations for audit and 2) non audit of the accounts may lead you to having trouble with obtaining a travel agency again as well as possible personal liability with the ODCE and other regulatory bodies. I feel that your accountant has advised you very well.
I understand your frustration. The system seems to punish the compliant whilst the fly by nights get away free. The CRO, ODCE, Revenue and DSW are a joke in that they allow the non compliant get away scot free whilst the guy that does things right ends up paying huge compliance costs. Makes it very hard for accountants also who end up advising clients to be compliant knowing that this is probably costing them money. The country is littered with laws that no body enforces. I say have more liberal laws but enforce them fully.
 
simplyjoe ....
-sadly I know that your advice is 100% right. And I know that auditor is a stickler for doing things properly. It's the cost (and to my mind) the "double-auditing" (i.e. auditor followed by liquidator) that bugs me.

I wonder if I could bother you with one question..

After the auditor does accounts which show that there are no liabilities and no assets, save the share capital, what, then ,does the liquidator have to do that he'll charge thousands of euros ? My audior reckons he could find a "CHEAP" one for 5k plus VAT - six grand for doing almost nothing !!



I could close the company now but am awaiting refunds from three different govnt sources - redundancy, VAT,travel bond -plus disposing of a lease of the shop, and paying ourselves a termination payment- after obtaining revenue permission for the excess 910kp.p.) payment.
Absolutely no other transaction.

If the audit shows that there is nothing owed, is the liquidator then just effectively auditing the auditor ? i.e a sort of "double-audit".

i suppose I'm acting like the grumpy old man here ???

( My t.o. this final financial year is below threshold for obligatory audit, and dont need audit for travel agency purposes having advised Regulator am not seeking renewal of licence. )
 
A liquidator carries a huge amount of responsibility and risk. Long after the company is dissolved, if it is disclovered that a liquidation was not performed by the letter of the law, that liquidator is very exposed to legal action. Also, there are significant external regulatory requirements.

So why don't you prepare an unaudited set of accounts and find a low cost liquidator? Better still, why not get the company to buy back your shares instead of liquidation?
 
Paddy199 said:
So why don't you prepare an unaudited set of accounts and find a low cost liquidator? Better still, why not get the company to buy back your shares instead of liquidation?
Click to expand...
In order for the share capital to be reduced the company would have had to have traded for 3 years and the reduction would have had to be for commercial reasons for the good of the company. If you could not prove this the Revenue could tackle the distribution as income and apply income tax.
 
..well, if reducing the share capital is part of the closing down process I'm unsure that it can be argued it's for the good of the company.
 
You need to liquidate the company, despite what is posted by others above it will be what is called a members voluntary liquidation. This form of liquidation is for solvent companies such as yours.

You do not need to prepare audited accounts.

The liquidator does not audit the auditor. You need an experienced liquidator to liquidate the company even though there is only a bank balance equal to the shares are there is as you can imagine still a certain amount of "red tape" that has to be adhered to. If everything is a simple as you are stating you should be able to get a quote from an experienced liquidator for around 1,000 to 1,500 as they can just fly through the paperwork.
 
You will need to prepare cessation acounts in order to satisfy the liquidator that there are no further tax liabilities else he cant 'distribute' the remaining cash. The question is will the revenue now accept un-audited accounts when the company has an obligation to audit accounts elswhere? A liquidator only charging €1,000 for a liquidation is taking some risk for very little reward.
 
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