Comments on: the tell-tale signs a contractor may need to dissolve their limited company https://www.freelanceinformer.com/freelancer-tales/the-freelancers-couch/the-tell-tale-signs-a-contractor-may-need-to-dissolve-their-limited-company/?utm_source=rss&utm_medium=rss&utm_campaign=the-tell-tale-signs-a-contractor-may-need-to-dissolve-their-limited-company Empowering the Freelance Economy Fri, 27 Aug 2021 09:24:11 +0000 hourly 1 https://wordpress.org/?v=6.7.1 By: John W https://www.freelanceinformer.com/freelancer-tales/the-freelancers-couch/the-tell-tale-signs-a-contractor-may-need-to-dissolve-their-limited-company/#comment-345 Fri, 27 Aug 2021 09:24:11 +0000 https://www.freelanceinformer.com/?p=4111#comment-345 I know this may sound a little self righteous, but when I first started contracting and had a “real” physical accountant, he gave me a pretty robust instruction in the legalities of a limited company. Key points were to never forget that although I might own the Company, it was legally a separate entity to me, and the need ensure its finances were “by the book”. In other words, funds to pay taxes, etc., have always been set aside at the time, ready for when they come due. Sadly, I have come across many over the years who treat their ltd company like an extra personal bank account with little regard to liabilities, hoping that their accountant can make sense of it for the annual accounts. I’ve seen several run into trouble as a result.

As for whether you should close down a ltd company, if you move to inside IR35 roles, there is no need to do so if you don’t want to. If all outgoings are dealt with, it can simply be made dormant for a time. If it doesn’t trade, the legal reporting requirements are minimal. There’s not even a need to retain accountant services. I did this myself for several years, when I had a consultancy role with a company as an employee.

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