{"id":6573,"date":"2019-08-26T10:13:38","date_gmt":"2019-08-26T09:13:38","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=6573"},"modified":"2024-11-08T12:04:15","modified_gmt":"2024-11-08T12:04:15","slug":"closing-a-company-a-guide-to-voluntary-dissolution-and-strike-off","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/closing-a-company-a-guide-to-voluntary-dissolution-and-strike-off\/","title":{"rendered":"Closing a company \u2013 a guide to voluntary dissolution and strike off"},"content":{"rendered":"
Closing a company and having it officially stuck off the Companies House register comes with a set of very strict rules and processes. Whatever your reason for winding up your company, this article will take you through the procedures involved with company dissolution, also known as ‘strike off’.<\/p>\n Our Company Dissolution Service - close your company today<\/span><\/a>\n \n If your business is solvent (it has money in the bank and is able to pay its creditors), you can apply to get your business struck off the companies register<\/a> or (ii) start a Members’ Voluntary Liquidation<\/a> (MVL).<\/p>\n If your business is insolvent, you\u2019ll need to follow a Creditors’ Voluntary Liquidation<\/a> (CVL) process.<\/p>\n These are voluntary processes, as opposed to a Compulsory Liquidation which is forced on a business by its creditors.<\/i><\/p>\n To get your limited company struck off the Companies House register, certain conditions apply:<\/p>\n If you cannot satisfy every one of these conditions, you\u2019ll need to apply for voluntary liquidation (MVL or CVL) or wait until the conditions do apply.<\/p>\n Before a company is struck off, it needs to be legally closed by:<\/p>\n The GOV.UK website provides a\u00a0full list of instructions for closing a company<\/a>,\u00a0which we recommend consulting before taking any official steps.<\/p>\n How can I generate passive income for my company?<\/span><\/a>\n \n Once you\u2019ve followed the recommended steps, you\u2019re ready to apply to Companies House to strike off your company.\u00a0The directors must formally agree to close down the company,\u00a0either by passing a resolution at a board meeting or by written board resolution. You can\u00a0then complete and file\u00a0Companies House Form DS01<\/a>.<\/p>\n Quality Company Formations offers a full\u00a0Company Dissolution Service<\/a> for only \u00a389.99 plus VAT. All you need to do is electronically sign the application to dissolve your company – we will do the rest, which includes paying the Companies House fee of \u00a350.00, filing form DSO1, and preparing a board resolution to approve the dissolution.<\/p>\n If your application is accepted, a notice will be put in your local Gazette. This invites any interested parties to object. Assuming this doesn\u2019t happen, there will be a second notice, two to three months later, announcing that the company has been dissolved.<\/p>\n You should keep all your business documents (including bank statements, invoices and receipts) for seven years after the striking-off period. If your company had employees, it is necessary to keep copies of the employers\u2019 liability insurance policy and schedule for 40 years from the date it was dissolved.<\/p>\n Individuals and other businesses or organisations may object to the dissolution of your company if:<\/p>\n Objections must be sent to Companies House. If any of these are upheld before the 2-3 months is up, then the strike-off will be suspended.<\/p>\n If you change your mind or your company becomes insolvent you can withdraw the application, providing your business is still on the Companies Register.<\/p>\n To withdraw your application, you should complete Companies House Form DS02<\/a>.<\/p>\n MVL is a process used to close a company in a more tax-efficient way. Examples of when a MVL might be preferable include:<\/p>\n MVL is a more expensive way of closing a company because a liquidator needs to be appointed. but it can be a more tax-efficient approach. If the amount of funds to be distributed amongst shareholders exceeds \u00a325,000, you\u2019ll pay lower rates of Capital Gains Tax with an MVL, as opposed to higher rates of Income Tax.<\/p>\n A Declaration of Solvency will have to be signed by a majority of directors. This is a statutory declaration which states the company will be able to repay its debts, along with any interest, within a fixed period of time not exceeding 12 months.<\/p>\n What is a business loan and how can my company get one?<\/span><\/a>\n \n An Extraordinary General Meeting has to be called within five weeks of the declaration. A Special Resolution will be passed, agreeing to the liquidation and the appointment of a liquidator. Within 14 days of their appointment, the liquidator must give notice of their appointment to the Registrar of Companies and advertise the appointment in the Gazette.<\/p>\n The liquidator then takes control of the company and carries out their duties, such as gathering and distributing assets accordingly.<\/p>\n If you are unable to pay your outstanding bills or creditors, your business is classed as insolvent. At this point, the interests of the company\u2019s creditors come before those of the directors or shareholders. If this happens, you may be able to start a Creditors\u2019 Voluntary Liquidation (CVL).<\/p>\n This type of liquidation can only begin under the guidance of an insolvency practitioner. Steps include:<\/p>\n The company will be struck off the register at Companies House and will no longer exist. Any remaining liabilities due to insufficient assets will be written off unless personally guaranteed.<\/p>\n The liquidator will investigate actions by the directors, including any former directors within the past three years. If fiduciary duties were not fulfilled, they could be guilty of fraudulent trading or misfeasance. In this case, they face personal liability for all or some of the company\u2019s debts. A disqualification from being a director for up to 15 years is possible.<\/p>\nWhat are the differences between closing a solvent and insolvent business?<\/h3>\n
Are there conditions for getting my company struck off the Companies Register?<\/h3>\n
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Are there steps to take before I can get my company struck off the Companies Register?<\/h3>\n
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Once my company has been dissolved, do I need to keep my business documents?<\/h3>\n
Why might there be objections to a company being struck off?<\/h3>\n
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Can I withdraw an application to have my company struck off?<\/h3>\n
What is a Members\u2019 Voluntary Liquidation (MVL), and why choose that over striking off?<\/h3>\n
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What\u2019s the process for a MVL?<\/h3>\n
Closing a company that is insolvent<\/h3>\n
How does a Creditors\u2019 Voluntary Liquidation work?<\/h3>\n
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What happens after a Creditors\u2019 Voluntary Liquidation?<\/h3>\n
What are the disadvantages of a Creditors\u2019 Voluntary Liquidation?<\/h3>\n
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What are the main advantages of a Creditors\u2019 Voluntary Liquidation?<\/h3>\n
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What is Compulsory Liquidation?<\/h3>\n