Many people have formed limited companies with very high expectations of business success. Unfortunately, such success is not guaranteed and may elude some, forcing the business to close.
If your business is no longer needed, out of debt, and has stopped trading, then closing a business should be simple and straightforward.
In these circumstances, business closure may be subject to a “voluntary strike-off and dissolution process” as defined on the Companies House website.
Before starting the closing down process
Certain conditions must be met before an application to close a business can be filed. Of importance are:
- The company must not trade or change its name in the past 3 months;
- You should have informed HMRC so they will wait for final accounts to close of trade and any taxes to be paid;
- You should also consider any surplus funds you wish to receive from the company in the form of salaries, dividends or capital distributions. If you are unsure about this, you may need to hire an accountant who will guide you through the process and ensure that you extract the funds in the correct and most tax-efficient manner;
- If you have creditors, they must be notified prior to filing and a copy of the strike-off form must be sent to them within 7 days of the filing date.
Complete the form
Requests for closure or strike-off must be submitted by directors by completing a form called DS01. The form is easy to fill in and quite self-explanatory in its content.
The fee payable for this is £10.
Don't waste your money
Make sure to close your business bank accounts before closing the business as bank accounts will be frozen and any monies in the account will pass to the Crown if you haven't withdrawn them before the closure is finalised.
The strike-off process takes approximately two months from the date of application. The deadlines are set by Companies House and there a number of steps before the final closure takes effect. Companies House will:
- register an application for strike off on the company’s public record;
- send an acknowledgment to you to this effect as well as a notification to the company at its registered office address;
- publish notice of the proposed striking off in the Gazette in order that any interested parties can object if needed e.g. HMRC if you have not filed accounts and tax returns or they know tax is due.