What is a company dissolution?

A company dissolution is the act of a company being removed – or struck off – from the Companies House register. Once a company has been dissolved it can not carry on any more trading activity and should be considered closed.

In this post, we’re going to look at the need-to-know information for company dissolutions. Let’s get started.

Why dissolve a limited company?

A company can be dissolved voluntarily or involuntarily.

Voluntary dissolution – Companies are dissolved voluntarily for a number of reasons but ultimately it will be because the company shareholders decide that the company is no longer required.

A common, practical reason for a company dissolution is that the company has fallen behind with its annual accounts. Rather than pay the fine for late filing of the accounts, the shareholders decide to close the company instead, and so avoid any late filing penalty. 

Involuntarily dissolution – Companies are dissolved involuntarily (by Companies House) if they fail to keep up with their company filing obligations, such as the confirmation statement, annual accounts or company tax returns.

Is it always possible to dissolve a company voluntarily?

No, there are scenarios when a company can’t be dissolved, such as:

• The company has traded within the last three months
• It has changed its names within the last three months
• It is currently the subject of legal proceedings 
• It is in liquidation (when a company needs to close but has outstanding liabilities) or is entering liquidation 
• It is in a credit agreement

How long does a voluntary company dissolution take?

Once a company has filed the DS01 – Strike off a company from the register form it will typically take 3 months for the company to be closed.

When a company has been dissolved, Companies House will continue to hold information on it.

Do you need help dissolving a limited company?

With our dissolution service, we’ll take care of your company’s dissolution from beginning to end. 

We’ll complete and file the DS01 form, take care of the board resolution to approve the dissolution, and ensure everything goes as smoothly as possible.

• Find out more about our Company Dissolution Service

So there you have it, the company dissolution explained.

Please leave a comment if you have any questions.