Updated: 20th May 2020
If you wish to close your company, then there are a number of ways in which you could do this, often depending on the solvency status of your company. If your company is solvent and no longer trading then you can apply to have the company voluntarily struck off from the Companies Register, simply by filling in a DS01 form and paying a £8 fee. However whether this is actually the right choice for your company is another question.
Providing your limited company meets certain criteria you, as the company director, can apply to Companies House to have it removed from the Companies Register.
You can only voluntarily strike off a company if it:
1. Before it can be struck off you must officially close down the company. This includes;
2. Complete a DS01 Application to Strike Off form. Send a copy of this within 7 days to any interested parties including any:
If you do not inform any and all interested parties at this point you may be subject to a fine or prosecution.
3. Compile and submit your final accounts. This includes:
As you can see, the process is not actually as simple as it first sounds, and there are also a number of tax and other financial implications that could mean that employing a DS01 voluntary strike off could actually cost you a lot more than just £8. The other option for closing a solvent company is through a Members’ Voluntary Liquidation (MVL), or if your company is insolvent then a Creditor’s Voluntary Liquidation (CVL).
There are in fact a number of reasons why choosing liquidation through either a MVL or CVL could actually leave you in a better position than if you choose voluntary strike off for closing your company.
Many people are not aware that if they liquidate their company, along with their employee’s being entitled to redundancy payments, any company directors are also entitled to redundancy. This is paid at a statutory rate from the National Insurance Fund via the government’s Insolvency Service and the average claim amount is around £9,000. So even if you do have to pay a sum for the liquidation of the company itself, you are still liable to walk away with a higher amount than if you voluntarily struck off your company as with you would not have been eligible for director’s redundancy payments. To find out more visit RedundancyClaim.co.uk who are experienced and professional director’s redundancy claim specialists.
If you choose to voluntarily strike off your company, this can’t actually be used to escape from any creditors that you may have. Even if a company has been removed from the Companies Register then your creditors can apply to for a court order to have the company reinstated. This would result in the company being reinstated as if it had never been dissolved and any creditors could continue to chase you for payment. However if you liquidate your company then your Insolvency Practitioner will attempt to pay any creditors from your company’s remaining assets and at the end of the process you will be officially released from any remaining obligation to your creditors.
When you choose to officially liquidate your company then you will appoint a licensed Insolvency Practitioner to handle the liquidation for you. They will take charge of the entire process and ensure that all of the statutory obligations are met and that the process is fully compliant. This includes extracting and fairly dividing any remaining assets that your company has in the most tax efficient manner possible.
If you wish to close your company, there are some circumstances in which a voluntary strike off may be appropriate. However if you have ever taken a salary from the company, it has any remaining assets or creditors then you may find that opting for a liquidation will be a more profitable and less complex avenue.
The experts at Real Business Rescue have nearly 30 years’ experience in assisting company directors when they wish to close their company. We will take the time to get to know you and your company before evaluating your options to find the most advantageous route for you. Contact us now to see how you could profit from closing down your company. With 83 offices across the UK, you’re never far away from expert and confidential advice.
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