Even successful and profitable businesses can be struck by cash flow problems because as they grow, more working capital is tied up in the business.Without proper cash flow planning good businesses can suddenly find they don’t have enough money to buy resources to fulfil the orders coming in.If you have a limited liability company that is to close or has ceased trading it’s very important that you take the necessary steps to formerly dissolve the company or follow a dormant company route.How to close a limited company in Ireland will depend on the status of the company and future plans for the company.“This may include a deliberate dividend strategy to reduce the cash balance below the £25,000 threshold for a Section 1030a distribution.Liquidating a contractor's company by a licensed insolvency practitioner enables high cash reserves to be distributed as capital, potentially attracting a tax rate as low as 10%Andrew Rosler, Ideal Corporate Solutions “Alternatively, a contractor who knows their income will fall, possibly due to retirement, may choose to leave the cash in the company and take dividends up to their basic rate allowance over successive years.” But Abbott acknowledges that many contractors taking retirement or moving into a long-term permanent role are seeking both closure and peace of mind that any risks associated with the company, such as IR35 or claims from clients, are minimised.When the liquidation is complete the company is removed from the Register of Companies. From the date of liquidation the liquidator takes custody and control of all the company’s unsecured assets and assists secured creditors where necessary.Accountants or solicitors can provide further information about options for insolvent companies. The assets are collected and sold for the benefit of the company’s creditors.
It doesn’t matter how much you are selling or the size of your profit, if your business doesn’t have enough cash to pay staff and suppliers you are in big trouble.Timing can be very important if you are considering closing a company.Continuing to trade on when the company is insolvent creates significant potential risks. The assets are collected and sold for the benefit of the company’s creditors. From the date of liquidation the liquidator takes custody and control of all the company’s unsecured assets and assists secured creditors where necessary.