You might assume that it’d be fine to dispose of your company records after it’s been liquidated, but whether you’re a sole trader or running a limited company, HMRC requires you to hold onto company records even after shutting down your business. Having these records available will help to protect you from future legal action after your company has been successfully liquidated, and provides HMRC and other regulatory bodies with vital information.
Below, we detail everything you need to know, including how long to keep company records after liquidation in the UK, which records you need to keep, and why.
Why Do Company Records Still Matter After Liquidation?
While your company being liquidated and dissolved means that it has stopped trading, that doesn’t mean it’s totally absolved of any legal proceedings later on. In these cases, you’ll need to be able to provide detailed company records. Creditors, HMRC or other regulatory bodies may request this information from you as well. For full transparency and legal coverage, you need to keep your company records.
How Long Do Records Need To Be Kept?
As a general rule, you should keep your company records for 6 years, in either paper or digital format. There are a few reasons for this. Contractual claims expire after a period of 6 years, as set out in the Limitation Act 1980. For the majority of cases, this will be long enough to ensure that you are covered until any potential claims against you expire. Also, if done within the same six-year timeframe, liquidated companies can also be restored to the Companies House register, so you’ll want your records available in case you decide to pursue this.
What Records Do You Need To Keep?
The exact full list of documents that you should keep will vary depending on the nature of your business and exactly what records you had available when the business shut down. As a general rule, though, we recommend keeping all of the following:
- Financial statements and accounting records.
- Bank statements.
- Tax returns and VAT records.
- Payroll information.
- Employee records.
- Asset registers.
- Contracts and agreements.
- Company correspondence.
- Liquidation documents and reports.
- Board meeting minutes and statutory registers.
Who Is Responsible For Keeping Company Records After Liquidation?
As well as how long to keep company records after liquidation, you need to know who needs to keep them too. The company’s liquidator is required to keep company records for a period of only 12 months. As a result, it’s very strongly advised that company directors secure a copy of all records before the liquidation is finalised. After the 12-month period is over, company directors will hold sole responsibility for keeping company documents.
What Are The Consequences If You Don’t Have Your Company Records?
If HMRC requests your company records and you don’t have them, you could face a fine of £3,000 per accounting period. If for any reason you don’t have your records, get in touch with HMRC proactively. If you are found to have lost your records during an active investigation, you’ll very likely face serious fines as a consequence, so do your best to retain your records and act quickly if you do lose them.
We hope that this guide on how long to keep company records after liquidation and why has been of help to you, but if you require further assistance, you can always contact us at Ballard Business Recovery. Our expert team will be able to help you with a variety of different business rescue and closure strategies, so if you’re in doubt or seeking advice relating to the future of your business, get in touch with us today.
