How to Strike off or Dissolve a Limited Company (UK)
A Dissolution is the method of removing a company name from Companies House.
What is a Company Dissolution (Strike off Application)?
Company dissolution, also known as 'striking off', is the method of removing a company name from Companies House. This brings the legal existence of the company to an end, concluding all its trade activities.
Dissolving a company is usually a voluntary process. Although, Companies House have the power to strike off companies that haven't filed accounts and tax returns. This is a compulsory strike off.
Can I Strike Off or Dissolve My Limited Company?
A voluntary strike off is not suitable for every business looking to close. Typically, for a company dissolution to go through, your company must:
- Have no debts (or minimal debt, provided you have the creditor's consent)
- Have no assets
- Not have traded or sold any stock in the last 3 months
How to Strike off or Dissolve a Limited Company (UK)
To strike off a limited company, you need to submit a DS01 form. The form costs £8 online, or £10 for a paper application.
This must be signed by a majority of directors and sent to Companies House. All 'notifiable parties' must receive a copy of the form within 7 days of making the application. This includes creditors, employees and shareholders.
Submitting the form triggers a notice in the Gazette announcing your decision to dissolve the company. If there are no objections, your company name will be removed from the register 3 months later. A final notice will be published in the Gazette confirming your company has been struck off.
What are my Responsibilities Before Striking Off My Limited Company?
Before you apply to dissolve your company and have it struck off the register, you typically need to fulfil these responsibilities:
- Check it's the correct route for your company. The Directors Helpline can do this for you.
- Distribute any assets to shareholders. If you don't do this, the assets will become Bona Vacantia and then property of the Crown.
- Pay employees their final wages and, if you're making staff redundant, follow any redundancy procedures.
- Pay all outstanding Corporation Tax, PAYE, National Insurance and other tax liabilities.
- File accounts and a tax return with HMRC. You need to declare these are the final accounts as you're planning to dissolve the company.
- Close down the company payroll scheme and deregister for VAT. Contact HMRC regarding this.
- Close any company bank accounts. Contact your bank regarding this.
- Notify HMRC and any interested parties about your decision to dissolve the company.
You must also keep any records and documents relating to the business for 7 years after your company dissolution.
Can Anything Stop my Company being Dissolved?
While some strike off applications go through with no issues, in some instances there can be an objection. This usually happens when the application is advertised in the London Gazette. Anyone connected to your business can formally object to the dissolution - such as creditors, shareholders and employees.
In most cases, the objection will come from a creditor of the company. This is because the creditor will lose any money your company owes to them if the dissolution is successful. That being said, it is possible for a creditor to pay to reinstate your company post dissolution. Therefore, it's in the creditor's best interest to object to the planned strike off so they can receive money owed to them.
If your company can't settle its debts, you may consider closing it through a Creditors Voluntary Liquidation. Unlike a strike off, this is a formal process that cannot be objected to.
2) Withdrawing your application
A director can withdraw their strike off application using a DS02 form. You must complete this if your company changes its name, continues trading or has become insolvent.
A dissolved limited company no longer exists. This prevents any further trading and all business must stop. A director can set up a new limited company if they'd like to continue trading.
A strike off is only suitable for companies with no assets and no debts (or minimal debt with creditor consent). Complete the informal process yourself at Companies House.
A Creditors Voluntary Liquidation is the most commonly used form of liquidation. This is for insolvent companies (when the debts outweigh the assets). Liquidation is a formal process which requires a licensed insolvency practitioner. There is also an investigation into the director's conduct which cannot be objected to.Watch our 40 second video
While striking off a company may seem straightforward, pitfalls exist. False information or failure to notify interested parties can lead to severe consequences, including fines. Seek advice before attempting to close your company to ensure it's the best route.
What happens to a director when a company is struck off?
Once you dissolve your company in accordance with Companies Act 2006 legislation, you will no longer be a director. In future, you can still be a director of a different or new limited company.
However, there is an exception to this - when a director's conduct is unfit. For example, striking off an insolvent company (instead of liquidating) to hide misconduct. This can potentially lead to a director disqualification.
What happens to debts when a company is dissolved?
It may be tempting to strike off a company to avoid paying its debts. However, dissolving a limited company does not mean the debts disappear. Creditors can still pursue and even reinstate the company following dissolution.
In some cases, the director may be held personally liable if the process wasn't done correctly. For example, if the director dissolved their company to avoid paying its debts, knowing the company was insolvent.
How The Directors Helpline Can Help
The Directors Helpline are committed to supporting directors like you. Make well-informed choices while safeguarding your personal interests.
Our expert team is available 24/7 to guide you through the dissolution process. For free and confidential guidance, reach out to our team today and discover the best next steps for your company.
Dissolve your ltd company
Navigating company dissolution can be complex, but we're here to simplify the process. Our experienced team provides tailored guidance, from evaluating your company's eligibility for strike off to understanding the steps involved.
Whether you need help handling objections, or understanding your responsibilities pre-dissolution, we offer reliable support throughout. Strike off your company correctly and protect your best interests as a director.
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Director's Complete Guide to Dissolution
Our straightforward guide on Dissolution (Strike Off Applications) will help you understand your responsibilities, the cost, and the process.
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