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mickd_08(Newbie)Newbie
4 Dec 2023

Hello,

I'm wanting to wind up my ACN company that I've had for the past 20 years.

This was a single employee IT services company.

The business has not traded for the past 8 years, but I had kept it alive just in case I wanted to use it the future. I continued to pay the annual ASIC fees by way of personal directors loans to the business.

The business now has a loan liability to me of >$2000 with no other debts or assets.


The business also has franking credits of >$1500 from prior years that I seemingly have no way to distribute as I understand you can only distribute franking credits by attaching them to dividends - but I have no retained earnings to distribute.


I'm looking for any advice in how I can make use of these 2 financial elements - or am I correct in thinking I need to just suck it up and move on . . .


Thanks.

2,375 views
2 replies
2,375 views
2 replies

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Most helpful replyATO Certified Response

YianaATO(Community Support)Community Support
ATO Certified Response12 Dec 2023

Hi @mickd_08


A company that has no income or assets is unlikely to be able to pay its debts when they fall due.


It's important to seek advice from a trusted professional adviser sooner rather than later when looking to wind up a company. Ensure that the person you speak with is a registered professional, such as an accountant, lawyer or accredited insolvency adviser. For more information have a look at the following pages, winding up a company and deregistration.

 

Franking credits operate to offset tax payable on the received franked dividends. Since the company does not have any income or assets to distribute, it is unlikely to be able to use the franking credits. Check out Utilising franking tax offsets and effect on losses โ€“ corporate tax entities for more information. 

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Most helpful replyATO Certified Response

YianaATO(Community Support)Community Support
ATO Certified Response12 Dec 2023

Hi @mickd_08


A company that has no income or assets is unlikely to be able to pay its debts when they fall due.


It's important to seek advice from a trusted professional adviser sooner rather than later when looking to wind up a company. Ensure that the person you speak with is a registered professional, such as an accountant, lawyer or accredited insolvency adviser. For more information have a look at the following pages, winding up a company and deregistration.

 

Franking credits operate to offset tax payable on the received franked dividends. Since the company does not have any income or assets to distribute, it is unlikely to be able to use the franking credits. Check out Utilising franking tax offsets and effect on losses โ€“ corporate tax entities for more information. 

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Windup up a company - Directors loan and franking credits | ATO Community