Since the replacement of ESC C16 by a statutory instrument, the process for closing a company has changed significantly. The new legislation effectively puts a cap on the tax advantage that can be gained on closure of a company by prohibiting a company with reserves in excess of £25,000 to be informally wound up. Companies looking to close since 1st March 2012 with reserves in excess of £25,000 must now be liquidated formally in order for the proceeds to be treated as capital receipts in the hands of shareholders.