Closing down your company can be overwhelming if you don’t know the steps to navigate the process smoothly. A crucial strategy for the legal closure of your company is creating a voluntary deregistration resolution.
Voluntary deregistration is the process of removing your company’s name from the register. Instead of forced closure due to liquidation, voluntary deregistration clears your company from paying taxes and dues in the future. There are various measures to follow with a special voluntary deregistration resolution.
Things to Do Before Voluntary Deregistration
Similar to applying for a job, you should strictly comply with these requirements before deregistering your company.
• Cancel or close all bank accounts associated with the company.
• Cancel or transfer registered business names.
• Clear or transfer stocks and fixed assets from the company.
• Make sure your company has no outstanding business debts.
• Settle all tax debts and requirements.
• File the company’s last income tax return (ITR) and financial report.
Your eligibility for voluntary deregistration depends on your company’s location, size, and the legal requirements of your country’s business origin. Check with your local finance commission and tax bureau for additional requirements.
Eligibility for Voluntary Deregistration
Aside from the basic requirements, there are procedures you should meet before deregistration. Meeting these conditions is essential when coming up with a voluntary deregistration resolution. Please note that solvent companies are the only companies eligible for voluntary deregistration.
• All company members should agree with the deregistration.
• The company’s trading is no longer in operation.
• The company has no other legal proceedings and obligations.
• The company has no outstanding liabilities towards external parties and employees.
• The company has distributed all its assets in compliance with the law.
Who Can Request Voluntary Deregistration?
Shareholders can apply to deregister a company through a special voluntary deregistration resolution. The board of directors or a point person can also send an application. However, they can only do so if the company’s constitution allows or encourages the application.
How to Submit a Voluntary Deregistration Application
Depending on where you’re from, lodge your application to the government commission assigned for your business type once all requirements are complete. You should pay an upfront fee for the commission to process your application. Since it’s a non-refundable fee, you should double-check your company’s eligibility. For more reassurance, you should employ business advisory services to ensure that there are no loopholes in your requirements.
What Happens After Voluntary Deregistration?
You are removing the legal obligations of the company or corporation when you voluntarily deregister your company. Voluntary deregistration also denies your business the ability to engage in binding transactions. You should also archive and store your company’s records even after you have deregistered your company.
Voluntary deregistration is tricky without proper knowledge of the correct procedures. If you plan to deregister your company, it would be best to reach out to experts in the matter. Consult with business advisory services to walk you through the voluntary deregistration process. These services can help you think of a voluntary deregistration resolution suited for your company’s needs.
