Company dissolution is the process of removing a company from the Companies House register, after which the company ceases to exist as a legal entity. Dissolution can be initiated voluntarily by the directors or compulsorily by Companies House or a court.
Types of Dissolution
| Type | Initiated By | Common Reason |
|---|---|---|
| Voluntary strike off | Directors (form DS01) | Company no longer needed; ceased trading |
| Compulsory strike off | Companies House (Registrar) | Failure to file accounts or confirmation statements |
| Court-ordered winding up | Creditors or court | Insolvency or public interest |
| After voluntary liquidation | Liquidator | Company wound up through MVL or CVL |
Voluntary Strike Off (DS01)
The most common method for closing a company that is no longer needed.
Eligibility
The company must not have, in the previous 3 months:
- Traded or carried on business
- Changed its name
- Disposed of property or rights for value
- Engaged in any activity other than what is necessary for the strike-off process
Process
| Step | Action |
|---|---|
| 1 | Settle all debts and close the PAYE scheme |
| 2 | File outstanding accounts and tax returns |
| 3 | Majority of directors sign form DS01 |
| 4 | Send copies of DS01 to all stakeholders (creditors, shareholders, employees, pension trustees) |
| 5 | File DS01 with Companies House and pay the filing fee |
| 6 | Companies House publishes a First Gazette notice |
| 7 | 2-month objection period begins |
| 8 | If no objections, Companies House publishes a Second Gazette notice |
| 9 | Company is dissolved (typically 3 months from application) |
Who Must Receive a Copy of DS01
Within 7 days of filing, the directors must send copies to:
- All shareholders
- All creditors (including HMRC)
- All employees and former employees with outstanding claims
- Pension scheme trustees or managers
- Any directors who did not sign the application
Compulsory Strike Off by Companies House
Companies House can strike off a company if it has reasonable cause to believe the company is not carrying on business or in operation. This commonly happens when:
- Accounts are overdue and the company has not responded to reminders
- The confirmation statement has not been filed
- Post sent to the registered office is returned undelivered
Compulsory Strike Off Process
| Stage | Action |
|---|---|
| 1 | Companies House sends a letter asking if the company is still active |
| 2 | If no response within 14 days, a First Gazette notice is published |
| 3 | 2-month objection period |
| 4 | If no objection or response, Second Gazette notice |
| 5 | Company dissolved — removed from register |
Objecting to Strike Off
Any person can object to a company being struck off during the 2-month objection period. Common objectors include:
| Objector | Reason |
|---|---|
| HMRC | Outstanding tax liabilities or unfiled returns |
| Creditors | Unpaid debts |
| Employees | Outstanding wages or redundancy pay claims |
| Shareholders | Assets not properly distributed |
| The Pensions Regulator | Unresolved pension obligations |
To object, the person writes to Companies House explaining why the company should not be struck off. If the objection is accepted, the strike-off action is suspended.
What Happens After Dissolution
Company Assets
Any assets remaining at the time of dissolution pass to the Crown as bona vacantia (ownerless property). This includes:
- Cash in bank accounts
- Property and land
- Intellectual property (trademarks, patents)
- Shares in other companies
- Debts owed to the company
The Treasury Solicitor (or equivalents in Scotland and Northern Ireland) administers bona vacantia and can sell or dispose of the assets.
Company Liabilities
Dissolution does not extinguish the company’s debts. Creditors can apply to restore the company to the register to pursue outstanding claims.
Restoring a Dissolved Company
A dissolved company can be restored to the Companies House register through two methods:
Administrative Restoration (s.1024)
| Feature | Detail |
|---|---|
| Who can apply | Former directors or shareholders |
| Time limit | Within 6 years of dissolution |
| Requirements | Company was trading at the time of strike off; all outstanding filings delivered |
| Fee | A Companies House restoration fee plus any outstanding filing penalties |
| Applied to | Companies House (not the court) |
Court-Ordered Restoration (s.1029)
| Feature | Detail |
|---|---|
| Who can apply | Any person with an interest (including creditors, former directors, shareholders) |
| Time limit | Within 6 years of dissolution (or longer for personal injury claims) |
| Requirements | Court must be satisfied that restoration is just |
| Cost | Court fees plus legal costs (typically £1,000+) |
When a company is restored, it is treated as if it had never been dissolved. All filing obligations for the period of dissolution must be met, and any bona vacantia property is returned.
Dissolution and Tax
Before dissolution, the company must settle all tax affairs:
| Tax | Requirement |
|---|---|
| Corporation tax | File final CT600 and pay any liability |
| VAT | Deregister and file final return |
| PAYE | Close the scheme and issue P45s |
| Distributions | Apply correct tax treatment to any capital distributions |
HMRC frequently objects to strike-off applications where tax returns are outstanding.
Accounting for Dissolution
The final accounting records should show:
| Account | Position at Dissolution |
|---|---|
| Assets | Zero (all distributed or transferred to the Crown) |
| Liabilities | Zero (all settled) |
| Share capital | Returned to shareholders via distributions |
| Retained earnings | Distributed or eliminated |
The company must file its final accounts with Companies House before applying for strike off. These accounts cover the period from the last filed accounts to the date of cessation of trading.