How Long Should You Keep Company Records After Liquidation?December 10, 2021
There’s lots to do when closing a business - while it’s not the first thing you’ll think of, it’s vital to know how long to keep company records for after liquidation.
The Insolvency Service’s latest figures show that for the first time, the number of Creditors’ Voluntary Liquidations (CVLs) has gone up compared to before the COVID-19 pandemic.
There were 1,521 CVLs in November 2021, 43% higher than two years ago, perhaps a result of temporary insolvency restriction protections coming to an end in October.
To explain how long to keep business records for after closing a company in the UK, this article covers the process for CVLs. For compulsory ones, the liquidator will confirm how long to keep company records for after liquidation.
What happens to the business after liquidation?
Although directors’ authority ends once liquidation begins, you still have a responsibility to cooperate with the liquidator’s requests until the full process is complete.
There’s no fixed timeframe for the end of liquidation, it depends on how long it takes to sell assets, repay creditors and handle all the other circumstances.
The liquidator will deal with legal disputes and remaining contracts, as well as interviewing directors to report on the reasons behind the company’s closure.
Your employees are typically dismissed but also become creditors if they’re still owed their salary.
Ultimately, Companies House must be notified and the resolution listed in The Gazette.
To close down a company officially, you need to file final trading accounts and a company tax return with HMRC.
How long to keep business records for after closing a company in the UK
Seven years - that’s how long to keep company records for after liquidation.
Once the company has been closed down, you must still keep bank statements, invoices, account records, tax documents, receipts and so on for seven years.
This includes any other relevant records including bank correspondence, trading histories and sales books, details of owned assets, till rolls, debts, stock and so on.
Why seven years? One reason is because technically, liquidated businesses can be restored to the Companies House register within six years.
Note that for accounting records in general, for any limited company not being liquidated, there’s a requirement to keep these for at least six years after the last financial year anyway.
Something else to be aware of is that you also need to retain copies of staff’s liability insurance policy for 40 years after liquidation.
Summary: how long to keep company records for after liquidation
So now you know - if anyone asks you how long to keep business records for after closing a company in the UK, tell them that in short, it’s for seven years, assuming it’s a CVL.
For further information about the process of placing a company into liquidation, we’ve previously written an in-depth guide.
For any other queries about closing a business or how long to keep company records for after liquidation, please don’t hesitate to get in touch with us.