While there are thousands of new companies incorporated each year in the UK , almost as many companies are dissolved and removed from Companies House public register. Companies can be dissolved for many reasons, in some cases they are struck off by Companies house due to failure to comply with their filing requirements. In other instances, the directors of the company may apply for the company to be dissolved. This means the company can no longer trade and it has officially been closed.
How to dissolve a company
Submitting a company dissolution request involves a majority of directors signing a DS01 form and submitting this to Companies House. This form can be submitted electronically and Companies House will contact the directors to sign the form electronically or a paper form can be signed and posted to the relevant Companies House office.
Before submitting a company dissolution request, you must take several steps. All interested parties must be notified regarding your plans to close the business. This includes the shareholders of the company, any creditors, company employees, managers/trustees of employee pension funds, any directors who do not sign the dissolution application and HMRC to confirm your company will no longer be trading. The company assets will also need to be distributed to the shareholders as the company bank account will be frozen from the date of the dissolution and any remaining assets will be passed to the government.
The process of dissolving a company can be reversed but is often viewed as a permanent decision as reversing the dissolution is very administrative and often expensive as it requires professional legal assistance.
It is important to stress a dissolution request is not always accepted. As part of the process, public notices will be published explaining the directors’ intentions to close the company. If there are outstanding debts to be paid by the company an objection can be made to stop the dissolution process.
Applying to dissolve and close the company may not always be the preferred option, if you feel the company may be required in future. In this instance, you may decide to make the company dormant so it can begin trading at a later date. You are still required to file a confirmation statement and dormant company accounts each year if you would like to keep the company dormant.
By Small Firms Services|2023-03-10T15:21:03+00:00June 10th, 2022|Categories: Uncategorised|Comments Off on What is Company Dissolution?