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Thread: Tax / Accounting Advice Needed on winding up cc

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    Tax / Accounting Advice Needed on winding up cc

    Hi

    I am an ex small business owner and need some help.

    I started a CC in 2008. The CC was "dormant" till around April 2010 when I bought a licensed laundry shop. It went all downhill and on the 28th Feb 2011 I closed the shop doors for the last time. I got an accounting firm to assist me with financial statements for the 2011 tax year (they submitted the IT14 on my behalf). Now they're gone and I need to understand:
    1) My CC reflected some assets in terms of the license (or shall we call it franchise) rights, and a small amount of equipment which I had to leave in the shop so that the landlord could recover some of the fees as I actually breached the lease contract.
    2) The CC also reflected some liabilities - mainly the loan account.
    We did not have any transaction or trade in the 2011 / 2012 year.

    I am now told that SARS is looking for the IT14 for the CC for 2009 and 2010, 2012 after which point they will de-register it. Do I still have to submit full AFS even if there was a zero balance (2009/2010) and how do I reflect the assets (non-existent assets, a useless license and no more assets) in my accounting, does the rights depreciate and what about the equipment that was left behind? Can I also just transfer the closing balance of the loan account as a starting balance and closing balance again?

    Ideally I don't want to get an accountant for a non-existing business. Your input is really much appreciated.

    Thanks!

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Ronelle View Post
    Do I still have to submit full AFS even if there was a zero balance (2009/2010)
    No. Just state the the cc was dormant.

    Quote Originally Posted by Ronelle View Post
    how do I reflect the assets (non-existent assets, a useless license and no more assets)
    Under the circumstances, the 2012 accounts should probably be prepared on a liquidation basis. This means they're reported at their likely realisable value.

    Quote Originally Posted by Ronelle View Post
    does the rights depreciate and what about the equipment that was left behind?
    I think not - these will be capital losses in the end. (Maybe someone else can confirm or correct).

    Quote Originally Posted by Ronelle View Post
    Can I also just transfer the closing balance of the loan account as a starting balance and closing balance again?
    Just to be clear - are you winding up the cc, or do you intend to trade again with the cc at some future date?
    The trouble with opportunity is it normally comes dressed up as work.

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    Hi

    Thanks for the advice, correct I am of the intention to wind it up and not trade again.

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    Site Caretaker Dave A's Avatar
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    When it comes to the loan account, if there are no transactions during the year then the opening and closing balances will be the same.
    The trouble with opportunity is it normally comes dressed up as work.

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