February 8th, 2023
What Does Company Dissolution Mean?
Company dissolution is the process of legally terminating a limited company in the UK. It is officially recognised as a ‘termination of life’ by the Companies House Register in the UK. This process will involve the company being struck off the Companies Register, which removes all legal obligations it had for trading.
The most common form of company dissolution is a ‘Strike Off’. This is when a company voluntarily applies to be removed from the Companies Register. Liquidation is the other recognised form of company dissolution and is more commonly used for insolvent companies.
Is Strike Off the Same as Liquidation?
No, Strike Off and Liquidation are not the same thing. Whilst both involve taking a company off the Companies House Register, the two processes involve different legal procedures.
Strike Off is a voluntary process and requires the company to apply to the Companies House . The company must be up to date with its filing requirements, debts must be settled and all assets must be distributed or sold. The key difference between Strike Off and Liquidation is that a Liquidation involves a third-party, such as a Liquidator, to manage the closing of the company.
Can I Strike Off or Dissolve My Company?
Yes, if the company is up to date with its filing requirements and all debts are settled then you may be able to apply to Companies House to strike off your company. Before you can apply, there are a few steps you need to take.
The first step is to hold a board meeting with all directors present to discuss the decision to dissolve the company. Once this meeting has been held, the decision must be minuted and filed with the official documents of the company.
You will also need to make sure that your company hasn’t traded, changed its name or moved to a different address in the last three months. If it has, you must provide proof that all debts have been cleared, such as invoices and account statements.
Can Anything Stop My Limited Company Being Dissolved?
Yes, Companies House can stop your company from being dissolved if they believe it would be detrimental to creditors or other stakeholders. The Registrar will also refuse to dissolve your company if they believe that the information you’ve provided is inaccurate or if any creditors or shareholders are against the dissolution.
What Do I Have to Do Before Striking Off My Company?
1. All debts must be settled and accounts closed.
2. All assets must be distributed or sold
3. All relevant accounts and final returns must be filed with HM Revenue & Customs (HMRC).
4. A strike off notice must be sent to creditors, employees and suppliers.
5. An application must be made to Companies House to strike off the company
Conclusion
Company dissolution, or Strike Off, is the official process for closing a limited company in the UK. There are two recognised forms of dissolution; Strike Off and Liquidation. Strike Off is a voluntary process and will require the company to settle all debts, distribute all assets and provide Companies House with all necessary documents. Companies House can, however, refuse to dissolve the company if it’s deemed to be unfavourable to creditors or shareholders.