— Company Closure
Close the Company Simply. When Dissolution Is the Right Route.
Company dissolution — also known as voluntary strike off — is the simplest and least expensive way to close a limited company. It removes the company from the Companies House register without the need for a formal insolvency procedure, a licensed IP, or a creditor vote.
But dissolution is only appropriate in a limited set of circumstances. Using it incorrectly — attempting to dissolve a company that has outstanding debts, unsettled HMRC obligations, or assets of significant value — is a serious offence that can result in personal liability for directors, criminal prosecution, and restoration of the company to the register.
Business Guardian advises on whether dissolution is the correct route for your company, and manages the process if it is.
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— MVL
When Is Dissolution
Appropriate?
A company can apply for voluntary strike off under Section 1004 of the Companies Act 2006 provided that in the previous three months it has not:
Traded or otherwise carried on business
Changed its name
Made a disposal for value of property that, immediately before ceasing to trade, it held for the purposes of disposal or gain in the normal course of trading or otherwise carrying on business
In practice, dissolution is appropriate for:
Dormant companies that were set up but never traded
Companies that have ceased trading and have no significant assets or outstanding liabilities
Companies where all debts — including HMRC — have been paid in full and accounts are up to date
Dissolution is not appropriate for insolvent companies, companies with outstanding creditor claims, or companies with assets of significant value that need to be distributed. The consequences of incorrectly using dissolution are serious.
— DS01Application process
The DS01
Application Process
step one
All outstanding HMRC obligations are settled — tax returns filed, all tax paid, PAYE schemes closed.
step two
All company bank accounts are closed.
step three
Any remaining assets are distributed to shareholders or written off.
step four
A DS01 form (Application to Strike Off a Limited Company from the Register) is submitted to Companies House, signed by a majority of directors.
step five
Companies House notifies interested parties, including HMRC, and advertises the proposed strike off in the London Gazette.
step six
After a two-month waiting period, if no objections are received, the company is struck off the register.
The process typically takes two to three months from submission of the DS01 to final dissolution. Companies House charge a nominal fee for the application.
— Assets on dissolution
What Happens to Assets
on Dissolution?
Any assets remaining in the company at the time of dissolution pass to the Crown as bona vacantia — they do not automatically pass to the directors or shareholders. This is why it is essential to distribute or dispose of all assets before applying for strike off. The most common oversight is cash remaining in company bank accounts. We advise on the correct pre-dissolution distribution of assets.
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