Limited company dissolution

From shareholders deciding they wish to retire to the assets and goodwill of a company being sold to a new owner (as opposed to a share sale), there are many reasons why business owners choose to dissolve a company.

Voluntary dissolution, sometimes called striking a company off or winding a company up, is a slow process that can be taken by any business as long as it has not, in the previous three months:

• carried out its normal business activities
• changed its name
• carried out any activity not related to the winding up of the business. Activities which do not obstruct an application to dissolve a company include selling property or rights that a company needed when it traded and settling its debts
• been threatened by creditors with liquidation
• entered into a credit agreement like a company voluntary arrangement
• been the subject of any legal proceedings

If any of these situations apply to your business,Companies House will require you to file for voluntary liquidation to close operations instead of filing for company dissolution.

For help and advice on company dissolution, please callus on +44 (0) 207 689 7888 or email us at info@yourcompanyformations.co.uk

Company dissolution service UK – our service

Completion and submission of DS01 form and payment of the fee to Companies House

Companies House require a payment of £10 and the completion and submission of form DS01 to start the company dissolution process. We make this payment on your behalf when you use our service.

Completion of board minutes documentation

Our legal experts write up the minutes of a board meeting showing that a vote has been passed to dissolve the company. You will need to hold onto these records as well as others (detailed below).

Dissolution of company UK – frequently asked questions

Who needs to know that I’m dissolving the company?

Under the requirements of the Companies Act 2016, you must, within seven days, inform anyone with an interest or stake in the continued running of your business. These people and companies include but are not limited to shareholders within the business, banks, creditors, landlords,suppliers, guarantors, HMRC, employees, any person suing for a personal injury claim against you, employee pension fund managers, and directors who have not signed the DS01 form.

Can I change my mind?

Once you have started the dissolution process, you can stop it by using a DS02 form from Companies House – this can be done online or with a paper form.

You will also need to fill in a DS02 form if you start trading again, change your company name, carry out an activity that’s not related to the dissolution of your business, or your business becomes subject to insolvency proceedings or a section 900 application.

Are there any tax considerations I should know about?

If your business assets are worth £25,000 or less, you may distribute them prior to your company’s dissolution. This might be treated by HMRC as a capital gain. If your business assets are worth over £25,000, you may pay it to yourself and other shareholders in the form of a dividend. In both cases, Entrepreneur’s Relief might be applicable and, if so, you would only pay 10% tax (subject to a lifetime limit of £10m).

This is a complicated area of taxation so we recommend that you consult with an accountant before deciding on a course of action.

How long does the process take after the submission of the DS01 form?

Between three to six months.

What support do I get from Your Company Formations?

We’re committed to providing our customers with the highest level of support. Please feel free to contact us before, during, or after you have used us to change your company name by phone or email.