How to close my company
‘Go kill some puppies, Cruella’ is one of my favourite put-downs and I often feel a tad Cruella-esque when, an incredible business comes to the end of it’s life and, I’m the one lifting the hatchet to close the company properly. Thankfully, not being a liquidator, things don’t get too gruesome for me. My area of expertise is more fluffy; closing happy companies after the business sells for squillions or the amazing owners are off chasing more lucrative opportunities.
I liken closing a company to running those final painful steps of a marathon. There are of course those (less gifted in the intellect department) who think closing a company is as simple as quitting a job and strutting out the door with the middle finger raised. What these fools don’t realise is that until the company is closed properly it still has a beating heart. It’s alive and that metaphorical door won’t hold back any rampaging zombies (like unpaid creditors, the tax department, ACC and warranty claims).
So let’s talk about your options for closing a company:
Strike-Off
The slackers way to shut a company is to stop filing annual returns, with the Companies Office, so the company is struck-off. It’s sort of like putting your company in ’snooze-mode’. It can still be woken up if anyone comes after you. There’s no real legal protection and the company assets become property of the crown (let’s hope your iPhone wasn’t owned by the company). Another drag is having to do non-active tax returns and accounts for eternity because being struck-off doesn’t make them magically go away.
Voluntary removal
A Voluntary Removal puts an end to filing tax returns and it works well if your company has paid all it’s bills and is unlikely to be sued. A Voluntary-Removal is also a good deal easier and a lot cheaper than a formal Liquidation ($855 with us).
Liquidation
You’re likely to terminate your company with a full-on Liquidation if your company owes money to creditors, if there’s a chance that the company could be sued or if you just want complete and utter peace of mind that everything’s been shutdown and closed properly legally. Full liquidations cost thousands and on top of that you’ll have to stump up for the advertising costs.
If you need to liquidate, talk to us first and we’ll connect you with a friendly liquidator who’ll have your back. It’s rarely smart to let your suppliers or the IRD appoint your liquidator.
Whichever way you go, don’t get yourself in strife by:
yanking all the money out of the company before we’ve done your final accounts
forgetting you may still have to pay the final Tax and Accident Compensation bills
thinking you’ll be debt free by closing the company when you’ve personally guaranteed company debts
killing off a company with tax losses which could save you tax in a future business endeavor
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