Known as a strike-off or dissolution, dissolving a company is the fastest and cheapest way to close it down. It’s a simple process you can carry out yourself, without needing an insolvency practitioner.
Because of the simplicity, it’s only available to companies that meet certain criteria. Your business must be free of debts and not have traded in the last three months.
Before you can start the process, the majority of company directors must agree to dissolve the business. Once that’s decided, there are a few key steps to follow before applying to remove the company from the Companies House register.
To dissolve a company, you must stop trading at least three months before applying. You need to make sure any outstanding work and invoicing is completed and payments have been collected
You’ll need to notify all relevant parties of your intention to dissolve the company. This includes shareholders, HMRC, creditors and employees.
Sell any company assets before you apply for dissolution. If you don’t do this, they could pass to the Crown under a process called bona vacantia, which you won’t be able to reverse later.
Use any proceeds from asset sales to pay creditors. You can’t dissolve the company if it still owes money.
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All employees must be paid their final wages, including redundancy payments where applicable.
When submitting your final accounts and tax return to HMRC, you’ll need to indicate that these are your final submissions due to planned dissolution.
Shut down your business bank accounts and make sure all trading activity has ceased completely.
Once everything is complete and the company has been inactive for at least three months, you can submit form DS01 to Companies House. There’s a £44 fee to do so.
After submitting the form, you must notify all interested parties within 7 days. Assuming no objections are raised, your company will usually be dissolved within 2–3 months
If a strike-off isn’t suitable for your business or it doesn’t meet the criteria, there are other formal options available.
If your company is solvent, has net assets of over £25,000, and has been trading for more than 24 months, an MVL could be a more tax-efficient way to close down. With the help of an Insolvency Practitioner, your company can be closed in an orderly, professional way, often with tax advantages for directors and shareholders.
If your company is insolvent and can’t pay its debts, a CVL allows you to close it down while repaying creditors where possible. An Insolvency Practitioner will manage the entire process and help stop legal action and creditor pressure.
Closing down a company can feel daunting, but it doesn’t have to be. Our in-house experts make the process simple. Whether you’re solvent or struggling with debt, we’ll help you choose the right route and take the pressure off.
We offer a free, no-obligation financial health check so you can understand your options before making any decisions.