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Drawing wage from business that is no longer trading

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  • 30-10-2014 12:48pm
    #1
    danny1986
    Registered Users Posts: 32 ✭


    Hello there.

    I have a limited company which I am closing, and have stopped trading for just over a week now.

    The problem is that I could really do with drawing one last wage from the business before closing it, as I have some funds in there still.

    Are you allowed to draw a wage from a company when you have stopped trading? I haven't sent in any letters to revenue yet, I have just stopped trading and will be sending in my accounts to revenue asap.

    Thanks for any advice.


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    #2
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    It depends. If you have not paid all your creditors in full it would be most inadvisable to pay yourself, so effectively you cannot take any money out. If there is a shortfall the liquidator is oblige by law to file a report with the ODCE. There are big downsides so you need to talk with the accountant you will use to wind up the company.


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    #3
    danny1986
    Registered Users Posts: 32 ✭danny1986


    pedroeibar1 wrote: »
    It depends. If you have not paid all your creditors in full it would be most inadvisable to pay yourself, so effectively you cannot take any money out. If there is a shortfall the liquidator is oblige by law to file a report with the ODCE. There are big downsides so you need to talk with the accountant you will use to wind up the company.

    Thanks for the reply.

    I actually don't ow any money to creditors. The only money owed will be for the years taxes etc. I believe that you are right, it's probably going to cause more hassle taking out a wage.


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    #4
    barneystinson
    Registered Users Posts: 4,683 ✭✭✭barneystinson


    danny1986 wrote: »
    Thanks for the reply.

    I actually don't ow any money to creditors. The only money owed will be for the years taxes etc. I believe that you are right, it's probably going to cause more hassle taking out a wage.

    Not necessarily, if the company is solvent and drawing the money won't prevent it from being able to pay its creditors & costs of winding up. Talk to your accountant.


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    #5
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    barneystinson wrote: »
    Not necessarily, if the company is solvent and drawing the money won't prevent it from being able to pay its creditors & costs of winding up. Talk to your accountant.

    Quite. But it appears that the OP does not regard the Taxman as a creditor, as he wrote
    I actually don't ow any money to creditors. The only money owed will be for the years taxes etc.

    For background read this


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    #6
    barneystinson
    Registered Users Posts: 4,683 ✭✭✭barneystinson


    pedroeibar1 wrote: »
    Quite. But it appears that the OP does not regard the Taxman as a creditor, as he wrote

    For background read this

    Ahhhhh, well that's a horse of a different colour.

    If the only tax owed is PAYE/PRSI on the OP's salary to himself (no mention of VAT and maybe he never got over the registration threshold), then Revenue will simply apply S.997A and deny the OP the credit for tax deducted by the company which hasn't been remitted to Revenue - in other words collect the PAYE that the company hasn't paid, from the individual.

    But certainly from a company law point of view, he shouldn't be drawing any further wage based on the situation outlined in the link.


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