Close (dissolve) Your Limited Company Online Today

Closing or dissolving a company is the process of removing or “striking off” a company from the register at Companies House. In situations where a company has become surplus to requirements (i.e. it has fulfilled the purpose it initially set out to achieve) and is no longer trading.

The company can strike off the register if for example:
- the directors wish to retire and there is no one to take over the running of the company
- the company is a subsidiary whose name is no longer needed
- the company was originally set up to exploit an idea that turned out not to be feasible
- the company has served its purpose, is no longer active and is unlikely to be required in the future

Section 1004 and section 1005 of the Companies Act 2006 set out the circumstances in which the company may not apply to be struck off.

For example, the company may not make an application for voluntary strike off if, at any time in the last 3 months, it has:
- traded or otherwise carried on business
- changed its name
- engaged in any other activity except one which is necessary for the purpose of:
i) concluding the affairs of the company, such as settling trading or business debts
ii) complying with any statutory requirement
iii) dispose of assets used to carry the business

For example, a company in business to sell apples could not continue selling apples during that 3 month period but it could sell the truck it once used to deliver the apples or the warehouse where they were stored.

In order to apply for voluntary striking off the company must be solvent: the directors can be held to be personally accountable if the company is struck off without settling all its debts.

A company cannot apply to be struck off if it is the subject, or proposed subject, of:
- any insolvency proceedings such as liquidation, including where a petition has been presented but has not yet been dealt with
- a section 895 scheme (that is a compromise or arrangement between a company and its creditors or members)

You will commit an offence if you breach these restrictions. Dissolution is not a process for trying to evade creditors. If it is found you have failed to notify a creditor of your application to dissolve the company, you could be prosecuted and, in certain circumstances, barred from holding future directorships for a period of 15 years.

The directors who make the application must, within 7 days of sending the application to the registrar, send a copy to:
- creditors, including all existing and likely creditors such as banks, suppliers, former employees if the company owes them money, HMRC and Department of Work and Pensions (DWP), employees, managers or trustees of any employee pension fund, any directors who have not signed the form.

Companies House will examine the form and, if it is acceptable, will:

- register the information and put it on the company’s public record
- send a notification to the company at its registered office address to enable it to object if the application is bogus
- publish notice of the proposed striking off in the Gazette to allow interested parties the opportunity to object
- place a copy of the Gazette notice on the company’s public record

If there is no reason to delay, the registrar will strike the company off the register not less than 2 months after the date of the notice. The company will be dissolved on publication of another notice in the relevant Gazette.