Dissolving a Company

A question frequently asked of us, is how to dissolve a company, without actually liquidating it, or using an insolvency process. Before specifically answering the question, we’ve set out below the criteria necessary, before considering the dissolution of a company.

Conditions for dissolution of a company

In order to qualify for the dissolution process, the company must firstly satisfy the following criteria:

  • It must not have traded in the three months prior to the application for striking off
  • It must not have changed its name within the past three months
  • It must not be in any kind of insolvency proceedings

Provided the above criteria are met, then the directors can, if they so choose, arrange for the company to be dissolved.

How to apply to dissolve a company

The easiest and most cost effective way of dissolving a company, is to apply to the Registrar of Companies to have the company struck off. This is a fairly simple process and can be done by completing form DSO1. This form can be found on a Government website at www.gov.uk/government/publications/company-strike-off-dissolution-and-restoration

However, before actually applying for strike off and subsequent dissolution, we would recommend that you have a brief word with us, just to ensure that you have satisfied all of the relevant criteria for dissolution and more importantly, that this is the most efficient tax method of dealing with your company. We do not charge for this initial consultation. If dissolution of your company is the optimum way of dealing with it, then we can assist you with that process.

If you decide to apply to have the company dissolved using the strike off process by completing for DS01, then the form will need to be signed by the sole director if there is only one, both directors if there are two, or the majority of directors if there are more than two.

The completed form then needs to be sent to the Registrar of Companies together with the £10 filing fee.

Notification of proposed dissolution of the company

Normally, most companies considering applying for dissolution, will have discharged the company’s liabilities ahead of the dissolution application. However, if for whatever reason your company does have outstanding liabilities at the date of applying for strike off, then you must send notification of the impending dissolution process to the following:

  • Any supplier or other creditor still owed money
  • Any former employees who may be owed money
  • HMRC

Additionally notification must be sent to all shareholders, irrespective of whether or not the company has outstanding liabilities.

The easiest way of notifying any outstanding creditor that your company is applying to be struck off and dissolved, is to send each creditor a copy of the form DS01.

The process following submission of the form to strike off

Once your application to strike off the company is received by Companies House, the actual application for striking off will be placed on your company’s public record at Companies House. The application for striking off will be acknowledged with the Registrar sending confirmation of receipt to the company’s registered office.

Notice of the proposed striking off will then be placed in the London Gazette.
In the event that no objections are received, then the company will be formally dissolved not less than two months after the notice was advertised in the London Gazette.

Further information on dissolution of a company

Although the dissolution of a company is a fairly simple process, there may be other more tax efficient ways of dealing with this issue. Before actually applying for the striking off of your company, we would recommend that you call us, in order that we can check on the current position and ensure that dissolution is indeed the correct process for you. Again, there is absolutely no charge for this advice.