I'm a LTD Company sole Director - what happens to all my assets when the company closes?

[Deleted User]

Hi, pretty much all in the title. Due to the current Covid situation a lot of business, including me, are considering closing down. 
I'm a graphic design freelancer set up as a LTD company. I had been trading less than a year before the outbreak of covid so I haven't been able to claim a furlough.
I've purchased computer equipment up to an excess of £2000 during my time working - what happens to this if I decide to close down my company?

Thanks for any help.

bap98189

Does the company owe any money? If so then the equipment should be sold to pay the debts. If not then it is yours.

ACG

Does the equipment belong to you or the company? 
If it belongs to you, then it is your asset so it would not be used to pay off any debts. 
If it belongs to the company then it would potentially be used to cover any debts if there are any. But it depends on what the company owes. Also bare in mind if you have paid yourself any dividends, those would likely need paying back to the company. 

[Deleted User]

ACG said:

Does the equipment belong to you or the company? 
If it belongs to you, then it is your asset so it would not be used to pay off any debts. 
If it belongs to the company then it would potentially be used to cover any debts if there are any. But it depends on what the company owes. Also bare in mind if you have paid yourself any dividends, those would likely need paying back to the company. 

The company has no debts. But the equipment was payed for out of the company accounts as an expense. I assume this would make it owned by the company. Does this change anything?
And could you explain the dividend part to me please, why would they need to be paid back. Would this only need to happen if the company was still in debt?

Thanks again for both your replies.

Dox

AshG1992 said:

ACG said:

Does the equipment belong to you or the company? 
If it belongs to you, then it is your asset so it would not be used to pay off any debts. 
If it belongs to the company then it would potentially be used to cover any debts if there are any. But it depends on what the company owes. Also bare in mind if you have paid yourself any dividends, those would likely need paying back to the company. 

The company has no debts. But the equipment was payed for out of the company accounts as an expense. I assume this would make it owned by the company. Does this change anything?
And could you explain the dividend part to me please, why would they need to be paid back. Would this only need to happen if the company was still in debt?

Thanks again for both your replies.

Don't worry, the dividend comment would only be relevant if the company had debts it couldn't pay and you had paid yourself dividends when there were insufficient profits to support such a payment.

[Deleted User]

I am the sole shareholder that's right. And thanks for clearing that up guys, appreciate the help.

tasticz

If you want to keep the items for yourselves then you'll need to add balancing charge on the corporation tax computation for the items and pay corporation tax @ 20% for that amount.

Savvy_Sue

If you've got an accountant, it would be well worth talking to them to make sure you do this right ... 

Grumpy_chap

AshG1992 said:

LTD company. I had been trading less than a year before the outbreak of covid so I haven't been able to claim a furlough.

Why couldn't you claim furlough?  If you had run payroll before 23 March, you could have been eligible for furlough.  Too late now though.

What will you do for income once you close the company?

LittleVoice

Grumpy_chap said:

AshG1992 said:

LTD company. I had been trading less than a year before the outbreak of covid so I haven't been able to claim a furlough.

Why couldn't you claim furlough?  If you had run payroll before 23 March, you could have been eligible for furlough.  Too late now though.

What will you do for income once you close the company?

When they began trading using the limited company maybe they were hoping to pay less tax by taking dividends rather than a salary.

Grumpy_chap

Yes, but it normally makes sense to receive a low salary to appropriate thresholds.