7 key points when striking off a business

By March 24, 2022June 8th, 2022No Comments

If you want to remove your company from the Companies House register, you will have to go through a process called dissolution. This is also known as striking off your business. You will not have to send an

A voluntary dissolution can only happen if the company has already met certain criteria. This could be:

  • Not trading or changing names within the last 3 months 
  • Not being threatened by the prospect of liquidation
  • Not having an agreement with creditors, like a Company Voluntary Arrangement (CVA)

The company will have to liquidate voluntarily if it does not meet these conditions.

What do I have to do before I apply?

Business owners have responsibilities that they must adhere to before applying to strike off their company.

You must announce plans for all interesting parties and HMRC. Employees have to be treated according to the company rules, business assets must be disposed of, and accounts have to be emptied. If these things are not done, assets of a dissolved legal company will become property of the Crown as it will not have a legal owner. 

The company’s bank account will be frozen from the day that the dissolution has been agreed. You’ll have to restore the company to get assets and credit balance in the account back; it will pass over from your company to fall under the ownership of the Crown.

How do I apply?

You can apply online, using your Companies House account and authorisation code. The DS01 form can be filled out on paper but this will take longer to process. 

For companies with several directors, over half of those directors need to sign the application before it can be processed. A copy of the application must be sent off within 7 days to those who could be affected by this (shareholders, creditors, employees, directors who haven’t already signed). 

If your company has never traded, it’s still easy to complete the process. Once you have applied for the process, you must let HMRC know that the company has never traded and it will be quickly struck off the Companies House register. 

On the other hand, if your company has traded but they meet the conditions, you must send a final statutory account and a Company Tax return to HMRC. You must state that these are the final trading accounts that the company will be dissolved soon. 

You do not need to put final accounts in with Company House. 

If there is no opposition to the strike off, the company will be struck off the register once a 2 month notice has been passed. A second notice will be published in the Gazette, meaning that the company will no longer legally exist; it will have been officially dissolved. 

Any late filing penalties to Companies House can usually be cast aside after the dissolution of your business. 

How can I withdraw my strike off application?

You can withdraw your application if your company is no longer able to be struck off. This could be because it has been trading or it has become insolvent. You are also able to withdraw your application if you have had a change of heart and you now want to keep the company.  

What happens after your company is dissolved?

Information from dissolved companies is maintained for 20 years after their dissolution, even though the company will no longer exist. Dissolved information can still be requested from Companies House or National Archives. 

Your company name can also be taken by somebody else with a brand new and unique company number. 

Who do I tell?

Before jumping into this, we advise that you talk to our compassionate experts, who will make the best decision for you and your business.

Fill in an application to strike off and send a copy within 7 days to anyone who could be affected. This includes:

  • members (usually the shareholders)
  • creditors
  • employees
  • managers or trustees of any employee pension fund
  • any directors who didn’t sign the application form

What is a DS01 form?

The DS01 form is a piece of paper that is used to formally dissolve or strike-off a company that is no longer wanted. It will remove the company name from the Companies House register, meaning that it no longer exists legally.

What can I do if creditors have opposed by decision to strike off?

You might find that your request has been blocked if you have made the decision to strike your company off by submitting the DS01 form to Companies House. This is usually because you have outstanding creditors who are set to lose the money that they are owed from your company, if your company is struck off and taken off the register. It could be a supplier chasing an unpaid invoice or HRMC looking to gather unpaid tax. Companies have two months to oppose your strike off, following your initial application. Your company will remain active if Companies House verifies these objections, and your strike off will of course be suspended. 

Your 4 options

1. Submit your application again

You can hope that it’s second time lucky for you and your application. There is the possibility that your application could squeeze through this time around but it won’t necessarily be that easy. After all, your creditors could be aware of your intention to strike off your company and they will be ready to launch an opposition to this. 

2. Pay off your creditor

If a small outstanding debt is the stumbling block, you could simply pay off that debt. There is no reason for your company strike-off to be rejected if you have paid back everything that you owe. 

3. Show caution with multiple creditors

You cannot simply go ahead with option 2 if you have multiple creditors who you owe money to. If you can pay all of them off then fair enough, however, you should not attempt to pay some of them off without paying others off as well. This can look like you are prioritising creditors and this is seen as a wrongful form of trading. 

4. Enter a Creditors Voluntary Liquidation (CVL)

A CVL will allow an insolvency practitioner to manage the affairs of your company before closing it down. Assets within the company will be liquidated and ratioed out to outstanding creditors in a fair manner. Outstanding debts on top of that will be written off during the process. 

A licensed insolvency practitioner is needed to make sure that the company is closed down in a correct and proper way. You do not have to worry about liquidation after petitioning for your company to be reinstated. Instead, you can be clear that the company has been shut down formerly and you can move forward. 

Get in touch

We are a front-running aid for corporations and people who find themselves in financial hardship. We are also a leading business advice service, providing expert advice and support in personal and corporate insolvency, liquidation, administration, restructuring, and refinancing.

At Business Helpline, we offer expert advice on the options available to you. Our experienced and knowledgeable advisers have a full understanding of the current business support options available to directors, and can advise you on the best route to take.

Call us today at 0800 088 2142.

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7 key points when striking off a business 63e4bc6b6a0c6

7 key points when striking off a business 63e4bc6b6a0eb