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Home» Accounts » Striking off companies

Striking off companies

Posted by admin - October 11, 2011 - Accounts, Business

HM TreasuryThe Treasury Solicitor removes its concession so you must sort out the Share Capital before applying for a company to be struck off under C16.

Technically speaking if a company is struck off under Extra Statutory Concession (ESC) C16 any share capital distributed as part of the ‘pay-out’ is treated as an unauthorised distribution under company law and this element of the payout can be recovered from the shareholders by the Crown as bona vacantia.

The Treasury Solicitor has in recent times exercised a concession under which they will not seek to recover share capital paid out during a company strike off if the amount of share capital involved is less than £4,000.

This concession is being withdrawn by the Treasury Solicitor with effect from 14 October 2011.

In future if you use ESC C16 to have a company struck off then if any of the money paid out represents share capital that amount can be recovered by the Treasury under the bona vacantia procedure. The new provisions in Companies Act 2006 make it easier to reduce or pay back share capital. In future if you are going to take advantage of ESC C16 you can pay out any amount of distributable reserves, subject to capital gains tax, but you should reduce the share capital of the company to a nominal £1 if you want to avoid any problem with bona vacantia.

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