If your company has stopped trading and has little or no debt, company dissolution (also known as striking off) can be a simple and cost-effective way to close a limited company.
However, dissolution is only suitable in certain circumstances. If your company has outstanding debts, owes HMRC, or creditors are likely to object, a formal insolvency procedure such as a Creditors' Voluntary Liquidation (CVL) may be more appropriate.
At Parker Walsh, we can help you understand whether dissolution is the right option and guide you towards the most suitable way of closing your company.
Complete our free online checker to receive an quote and instant indication of whether striking off may be appropriate for your circumstances.
Company dissolution is the legal process of removing a limited company from the Companies House register.
Once dissolved:
Unlike liquidation, dissolution does not involve appointing an Insolvency Practitioner. Instead, directors apply directly to Companies House to have the company struck off.
Dissolution is generally suitable where a company:
If these conditions are not met, dissolution may not be appropriate.
Company dissolution should not normally be used where:
In these situations, creditors can object to the dissolution, and Companies House may suspend or reject the application.
Where a company cannot pay its debts, a Creditors' Voluntary Liquidation (CVL) is often the correct legal solution.
Dissolution does not write off company debts.
If creditors discover the company is attempting to dissolve while debts remain outstanding, they can object to Companies House and prevent the company from being struck off.
In some cases, a dissolved company can even be restored to the register so creditors can pursue recovery action.
For this reason, directors should always seek advice before applying if any liabilities remain.
Before a company is dissolved, all assets should be dealt with appropriately.
This may include:
If assets remain after dissolution, they generally become bona vacantia, meaning ownership passes to the Crown.
The process usually takes around three to six months, although timings can vary depending on whether any objections are received.
Once the application is submitted:
For solvent companies with no outstanding liabilities, dissolution is often the simplest and least expensive closure method.
However, choosing dissolution simply because it appears cheaper can be costly if the company is actually insolvent or creditors later object.
Taking advice first can help avoid delays, complications and potential director issues.
Absolutely. We regularly advise directors who are unsure whether dissolution is appropriate.
We'll review your circumstances and explain whether:
Our advice is always tailored to your specific circumstances.
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