Last updated on 5 July 2022
PayPal is famously known for instantly seizing accounts and taking the money for themselves. It’s happened countless times to people I know, and myself. But why is there no regulation against this for such a huge company? Surely that’s illegal, but nope, it’s apparently allowed. Another question, why is there no PayPal competitor that can take over? It’s needed!
Closing a company with traditional banks vs. PayPal
If you are closing down your company in the UK or similar, you’re probably aware but the “Crown” officially takes money that is left in your bank account after striking off or dissolving the company. It’s important to remove any funds from your bank account before you dissolve your company. You can learn more about why the Crown takes the money here.
Basically, I asked this question about my business PayPal account too. Do PayPal freeze or seize your money in your PayPal business account when closing down a company? The answer is no, they don’t. I would still recommend you remove the money as soon as possible though and will explain why below.
I spoke to PayPal support and asked if they do what traditional banks do and seize your money and their reply was:
So, I do have an important suggestion – remove your funds if possible! Because PayPal can’t be trusted and they have the right to steal your funds at any time (I know it’s daylight robbery!).
If you do close down your company while having a business account, you could run into another issue which I have experienced. If they see or investigate that your company is marked as dissolved or struck off, they will seize your funds instantly without warning and lock them up for 180 days. If they deem them to be “risky” to them, they will keep the funds for themselves, coz they are literally thieves.
I’ve had the experience of this on 2 companies. One of them the PayPal account was fine and was able to keep running. But another one, I needed support so they had to look into an issue on the account and without warning, boom! They gave me that message above.
Should you keep money in your PayPal account when closing down a company?
Even though they don’t take the money for the “Crown”, it’s not a good idea to hold money in PayPal if you have dissolved your company. They most probably won’t notice it closing down, but if they happen to investigate it manually, they will seize your funds instantly.