STRIKING OFF: Getting your limited company ‘struck off’ the Companies Register is one way to close it down.
But, you can only strike off a private limited company if it hasn’t:
- Changed its name within the last three (3) months.
- Sold off any stock or traded in the last three (3) months.
- Been threatened with a ‘winding up’ order (liquidation).
- Made agreements with creditors (e.g. a Voluntary Arrangement).
Meeting these conditions means you can apply to ‘strike off’ your company. But, you must meet legal responsibilities for closing down your business.
Note: What if the company fails to meet these conditions? In this case, you would need to liquidate your limited company instead ‘voluntarily’.
How to Close Down Your Limited Company
You must follow the legal steps to close down your company. Thus, before you apply to strike off a private limited company, you would need to:
- Announce the intention to any interested parties and to HM Revenue and Customs (HMRC).
- Deal with the accounts and the assets belonging to the business.
- Ensure any employees get treated according to statutory employment rules in United Kingdom.
People You Need to Notify
There is a specific application form to strike off a private limited company from the Companies Register (details below). After filling in ‘form DS01’ you must send a copy (with seven days) to anyone who the striking off may affect. In most cases, it would include:
- Company members (i.e. the shareholders)
- Creditors
- Employees (if applicable)
- Managers or trustees of any employee pension fund
- Any company directors that may be unaware of the plans (e.g. they did not sign the application form)
Note: Failing to follow all the rules and regulations on who you must tell can result in a fine and a prosecution.
If the Company Employs Staff:
- You must pay their final wages or salary.
- You must follow the rules if you are making staff redundant.
PAYE and National Insurance (NI)
If the company employs people you would need to inform HM Revenue and Customs (HMRC) any time you stop being an employer.
Sharing Business Assets
It is wise to share out any business assets to the shareholders before the company gets struck off. Anything left over after the striking off would go to the Crown. In this case, you would need to restore your dissolved company to get back any assets.
Final Statutory Accounts
The final trading accounts and a Company Tax Return would need sending to HM Revenue and Customs (not with Companies House). Follow these 3 steps to file the company final accounts:
- Prepare the final accounts and the company tax return. A different section explains accounts and tax returns for private limited companies in more detail.
- Go ahead and file the accounts and the company tax return. You should state that they are the final trading accounts because the company will soon be ‘dissolved’ (closed down).
- Finally, you must pay all corporate taxes and any other outstanding liabilities for taxation.
Note: The final year of trading may have resulted in a loss. If so, you might offset the tax against profits made in previous years. Thus, you would claim ‘terminal loss relief’ on the final tax return.
Capital Gains Tax (on personal profits)
Taking assets out of a company before getting struck off may be liable for Capital Gains Tax (CGT) on the amount.
In some cases, you could qualify for Business Asset Disposal Relief. Use your personal Self Assessment tax return to work out whether you can claim it.
Note: HMRC would treat the amount as income if it is worth over £25,000. In this case, the amount would then be liable for Income Tax.
Keeping Business Records after Being Struck Off
You must keep your business documents for at least seven (7) years after getting your company struck off from the Companies Register. Typical documents you must keep include bank statements, sales invoices, and payment receipts.
The rule changes if the company employed people. In this case, you would need to keep copies of the Employers’ Liability insurance policy and schedule for forty (40) years from the date that the company got dissolved.
Apply to Strike Off Your Limited Company
It is best to deal with company assets before you apply. That may include closing bank accounts and transferring website domain names.
You can close a company online or use ‘Form DS01‘ to strike off a private limited company from the register. Fill in form DS01 striking off application and send it to Companies House. A majority of company directors must have signed the application form.
The current cost to strike off a limited company is £10 (payable to Companies House). The striking off application fee is £8 if you close a company online. But, you cannot pay the fee by cheque from an account belonging to the company getting struck off.
Note: Making a dishonest application to strike off a company is an offence and can result in a fine and prosecution.
After Applying to be Struck Off
Companies House will send you a letter to confirm that you filled in the form without error. They will then fulfill your request for the company to get struck off the Companies Register.
They will also publish the company status by notice in your local Gazette Official Public Record as ‘struck off’.
The Gazette issues a notice period of two (2) months for people to object. If there are no objections, the company will get struck off the register. A second notice gets published after the two month period finishes to state that the company is legally ‘dissolved’.
Further Information on Striking Off Your Company.
Companies House produce guidance for directors, secretaries, or company advisers on how to dissolve a company or restore a company to the register.
How to Withdraw an Application
Losing company eligibility to be struck off means you would need to withdraw your application. So for example, starting to trade or becoming insolvent would mean withdrawing the application.
Changing your mind is also a valid reason to withdraw an application. Even so, your company must still be on the Companies Register to proceed with this option.
Note: Only one company director would need to sign the withdrawal form to withdraw a striking off application.
Withdraw a Striking Off Application Online
You can use the Companies House online service to withdraw a private limited company striking off application.
Withdraw a Striking Off Application by Post
Use ‘Form DS02‘ to withdraw a company striking off application by postal methods. Fill it in and send it to the address written on the document.