Just wondered what the general consensus was about closing down my ltd vs making it dormant for a year or 2.
I have had my company for over 10 years now, so well established etc. I have recently taken a permanent role at a start up, which was a good offer / equity etc, also wanting to see how the landscape pans out with the IR35 changes next year. My company year end is end of September, so I need to decide what to do regarding my company. I can either close it down or make it dormant.
My thoughts are I will be in the perm role for at least a couple of years. However, things may change and I may go back to contracting sooner rather than later. I have looked at both closing it down and making it dormant, my main worry is if I make it dormant I think it is still a legal entity, so potentially could get caught up in legal matters. I don't think I will not be able to buy and insurances etc as if you buy / sell anything the company automatically loses dormant state. I am not worried about IR35, as I get all my contracts checked and am pretty careful about working practices etc. I don't have too much to worry about from a getting sued by a client as I am a front end developer, all my work is signed off by the end clients before it goes live and can't really cause any damage to a client that would cause them to come after me in a legal manner.
I am thinking that from a personal finance point of view, it might be better to have it dormant so if I do go back to contracting when it comes to mortgages etc I can show I have been running the company for a significant amount of time, all be it with a dormant period whilst being a permie, so this may go in my favour with banks etc. I am going to take the remaining money out of the business anyway as dividends and close the business bank account down either way. So there isn't a pro / con there.
Any thoughts?
I have had my company for over 10 years now, so well established etc. I have recently taken a permanent role at a start up, which was a good offer / equity etc, also wanting to see how the landscape pans out with the IR35 changes next year. My company year end is end of September, so I need to decide what to do regarding my company. I can either close it down or make it dormant.
My thoughts are I will be in the perm role for at least a couple of years. However, things may change and I may go back to contracting sooner rather than later. I have looked at both closing it down and making it dormant, my main worry is if I make it dormant I think it is still a legal entity, so potentially could get caught up in legal matters. I don't think I will not be able to buy and insurances etc as if you buy / sell anything the company automatically loses dormant state. I am not worried about IR35, as I get all my contracts checked and am pretty careful about working practices etc. I don't have too much to worry about from a getting sued by a client as I am a front end developer, all my work is signed off by the end clients before it goes live and can't really cause any damage to a client that would cause them to come after me in a legal manner.
I am thinking that from a personal finance point of view, it might be better to have it dormant so if I do go back to contracting when it comes to mortgages etc I can show I have been running the company for a significant amount of time, all be it with a dormant period whilst being a permie, so this may go in my favour with banks etc. I am going to take the remaining money out of the business anyway as dividends and close the business bank account down either way. So there isn't a pro / con there.
Any thoughts?
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