How to shutdown your company and avoid a liquidation

When forming companies for clients, I am often asked how much hassle is involved in closing a company, if it is no longer required. Normally, a liquidator would need to be appointed, which can be expensive.

However, if a company ceases to trade and has no assets or liabilities (or they are less than €150), then the company can request to be struck off the register, which is a much simpler process.

Conditions for Voluntary Strike-Off

In order for the company to be struck off, there are some conditions which must be met:

  • The company must have ceased trading or never traded
  • Must not re-commence/commence trading in the period prior to being struck off the register
  • At the date of application for strike-off, the assets of the company must not exceed €150
  • At the date of application for strike-off, the liabilities of the company (including any potential liabilities) must not exceed €150
  • All outstanding annual returns must be filed and all relevant fees and penalties paid
  • A letter of no objection from the Revenue Commissioners must be submitted with the application. This letter must be dated within six months of the application.
  • The entire page of the newspaper containing the advertisement must be submitted with the application. The advertisement must be placed within the six weeks prior to the application. The original newspaper page must be included, not a photocopy.

Procedure

  1. Ensure that there is a Members’ Resolution in place sanctioning the application for voluntary strike off.
  2. Ensure all outstanding tax and CRO returns are filed and paid.
  3. Write to Revenue requesting a letter stating that they have no objection to the strike-off.
  4. Once the letter from Revenue is received, an advertisement must be placed in one daily newspaper published and circulated nationwide. Accepted publications are Irish Independent, Irish Daily Mail, Irish Daily Mirror, Irish Daily Star, Irish Times, Irish Examiner, Evening Herald or The Sun (Irish Edition).
  5. If the company has a registered business name, file RBN3 to de-register the name.
  6. Complete Form H15 and submit to CRO with the letter of no objection and the entire page the advertisement appeared on.
  7. The company must also be de-registered for taxes by filing Form TRCN1 with the Revenue Commissioners.
  8. Once the application has been submitted, it can take time for the company to be struck off. The company will receive two separate notices requesting if it still wishes to be struck off the register. The Registrar will then advertise their intention to strike the name of the company off the register and finally, a further month later, the company will be struck off and dissolved.

Example of Advertisement

XY Limited [formerly EFG Limited], trading as Z, [and formerly having traded as W], having ceased to trade/never traded (as applicable) having its registered office at [ ] and formerly having its registered office at [] and its principal place of business at [ ], and having no assets exceeding €150 and/or having no liabilities exceeding €150, has resolved to notify the Registrar of Companies that the company is not carrying on business and to request the Registrar on that basis to exercise her powers pursuant to section 311 of the Companies Act 1963 to strike the name of the company off the register.

By Order of the Board

Name of director/secretary (as applicable)

Potential Pitfalls

Care needs to be taken with the timing of each step. The advertisement should only be placed once all returns have been filed and paid and the letter of no objection has been received from Revenue. When submitting the application to the CRO, the Revenue letter must be within six months and the advertisement within six weeks of the application.

Voluntary strike off can be a more straightforward process than liquidation and can save considerable fees. However, it is advisable to seek professional advice before striking off the company to ensure that it is the correct course of action for your business and does not result in any tax claw backs.

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