How to Close Your Company Down the Right Way

How to Close Your Company Down the Right Way

Thinking about closing your company? You’re not alone.

Whether your ecommerce venture didn’t go as planned, you’re moving on to a new idea, or you simply no longer need the company — it’s important to close it properly.

Leaving a company open might seem harmless, but it can lead to ongoing costs, admin, and potential penalties.

Here’s how to shut things down the right way.

Why You Shouldn’t Just Leave a Company Open

A common mistake is assuming you can just “leave it” if you’re no longer trading.

Even if your company is inactive, you may still need to:

• File annual accounts
• Submit a confirmation statement (CS01)
• Deal with HMRC correspondence

This means:

💸 Ongoing accountancy costs

⏳ Admin you don’t want

⚠️ Risk of late filing penalties

Option 1: Strike Off (Voluntary Dissolution)

For most small businesses, freelancers, and ecommerce sellers, the simplest route is voluntary strike off.

This removes your company from the register at Companies House.

You can apply for strike off if:

• The company hasn’t traded in the last 3 months
• It has no outstanding debts
• It’s not involved in legal proceedings

The process:

1. Stop trading
   Close down operations and ensure no further business activity
2. Settle all liabilities
   Pay any outstanding debts, taxes, and supplier balances
3. Close bank accounts
   Withdraw remaining funds and distribute appropriately
4. Submit final accounts and tax returns
   Make sure everything is up to date with HMRC
5. Apply for strike off (DS01 form)
   Submit your application to Companies House
6. Wait for approval
   If no objections are raised, your company will be dissolved

Option 2: Members’ Voluntary Liquidation (MVL)

If your company has significant retained profits, you may want to consider a Members’ Voluntary Liquidation instead.

This is a more formal process handled by an insolvency practitioner, and can be more tax-efficient in some cases.

This is usually only relevant for companies with larger balances, so it’s worth getting advice before going down this route.

Risks of Leaving a Company Dormant

If you don’t close your company properly, it can cause issues down the line:

• ❌ Late filing penalties from Companies House or HMRC
• ❌ Unexpected accountancy costs year after year
• ❌ Director responsibilities still apply
• ❌ Potential complications if you want to start a new business

In some cases, Companies House may strike the company off themselves — but this is not something to rely on, and can still cause complications.

Ecommerce & Small Business Example

Let’s say you launched an Etsy or Shopify store but decided to stop selling after a year.

If you leave the company open, you’ll still need to:

• File accounts annually
• Submit confirmation statements
• Keep records and respond to HMRC

Instead, applying for strike off means you can cleanly close the chapter and avoid ongoing admin and costs.

Need Help Closing Your Company?

At File Tax Go, we support ecommerce sellers, small businesses, and content creators with one-off company closures.

We can handle:

• Final accounts and tax returns
• Strike off applications
• Guidance throughout the process

So you can close your company quickly, correctly, and without stress.

Get in touch to learn more.