Dissolution is sometimes referred to as deregistration or striking off.
Companies can be dissolved by Companies House without the consent of the owners or as, examined here, voluntarily by the owners of the company.
Company owners voluntarily deregister their companies for many reasons. As company formation agents we are often asked to deregister newly formed companies or companies that have never traded because business owners abandon the project for which the company was set up or because an awaited contract does not materialise. More established companies are voluntarily deregistered when they no longer serve a purpose. If you have set up a limited company that you no longer need, there is a simple process to have it deregistered.
VOLUNTARY DEREGISTRATION PROCESS
- All or a majority of a company’s directors apply to have a company deregistered by submitting form DS01 to the Registrar of Companies with a payment of £10.
- The Registrar of Companies places an advert in either the London, Edinburgh or Belfast Gazette (depending on the jurisdiction in which the company is registered ) notifying the public of the intention to deregister their company. The notice allows interested parties two months in which to object to the dissolution.
- Providing there are no valid objections; the company will be struck off the register after the two months notice has expired.
A dissolved company simply ceases to exist, although a record of its previous existence remains on the public records at Companies House.
Until recently form DS01 was sent by post to Companies House together with a cheque of £10. However, it is now possible to submit the form electronically through our gateway and to make a payment online.
STRIKING OFF APPLICATION-FORM DS01
Form DS01 can be submitted to Companies House on condition that, in the three months before the date of the application;
- The company has not traded
- The company has not changed its name
- The company has settled all its creditors and has no outstanding liabilities
- The company has not transferred or disposed of any goods in which it usually trades
THESE CONDITIONS DO NOT PREVENT THE DIRECTORS OF A COMPANY THAT HAS PREVIOUSLY TRADED FROM MAKING THE NORMAL ARRANGEMENTS TO CEASE TRADING, SUCH AS
- Paying final salaries and complying with redundancy regulations.
- Submitting final VAT returns and deregistering for VAT
- Closing down PAYE schemes
- Notifying the Department of Works and Pensions of the cessation
- Filing final accounts and tax returns with HMRC and informing them of the cessation of trade
DUTY TO ADVISE INTERESTED THIRD PARTIES OF YOUR APPLICATION TO DISSOLVE A COMPANY.
Once a DS01 has been sent to Companies House, a copy should be sent to any other interested parties, which would include the following
- Company shareholders
- Company employees
- Company creditors
- Any director who did not sign the DS01
- The trustees of any employee pension fund
- Any party that becomes a creditor of the company after the DS01 has been sent to Companies House, but before the company is deregistered
LOST ASSETS (BONA VACANTIA)
Bona Vacantia is the legal term given to ownerless assets. Once a company is dissolved it ceases to exist, and its assets its are Bona Vacantia and become the property of the Crown. We frequently receive requests to restore companies that have been voluntarily dissolved because the directors forgot to deal with the assets of the company. The most commonly overlooked assets are:
- BANK ACCOUNTS – owner/directors of small companies are regularly accessing their business bank accounts to monitor them and make payments, and they often forget that the accounts are the property of the company and not their own. It can be quite a shock to find out that you no longer have access to several thousand pounds. Before submitting a DS01, close the company bank account and transfer the balance as appropriate.
- WEBSITES AND DOMAIN NAMES – Transfer ownership of websites and domain names that are held by the company. If you are intending to continue operating your website and generating sales through another company or as a sole trader, you need to ensure you and not the Crown own the domain name and website
- PROPERTY FREEHOLDS AND LEASES – Wherever the land or property is situated, it should be transferred before dissolution.
- SHARES IN OTHER COMPANIES – These could be investments or group company holdings
- INTELLECTUAL PROPERTY – This could include patents, copyrights and trademarks
- TAX REFUNDS – There may be times when a refund of tax is due, especially if a company has had mixed trading results. Tax claims cannot be made, and refunds cannot be received if a company no longer exists
TAX ADVICE
If you are transferring assets from a company that you intend to dissolve, you and your tax advisors should examine the tax implications of the transfers before submitting the DS01
You may like this article: Choosing an accountant and agreeing fees
REVERSING THE DEREGISTRATION PROCESS
You can stop the process of deregistration by submitting form DS02. There are some circumstances in which it may be necessary to withdraw the DS01 to stop the deregistration process, such as:
- A petition is presented by a creditor to wind up the company, instead of allowing you to dissolve it.
- You find that you have not complied with the conditions required to submit a DS01.
- You wish to transfer assets that have been overlooked and in which the company has a title.
RECOVERING ASSETS FOLLOWING A VOLUNTARY DISSOLUTION
If a company is deregistered and assets have been overlooked and have become the property of the Crown, you are left with two options if you wish to recover them:
- REPURCHASE THEM FROM THE CROWN – You can ask the Treasury Solicitor for their valuation and arrange the purchase. Buying back assets that you once owned is annoying but may be necessary.
- APPLY FOR A COURT ORDER RESTORATION – This is an expensive process. You can avoid hiring a solicitor by making a direct application to the court, and this will reduce the cost significantly. Nevertheless, you will have to pay a Court fee of £280 and a fee of £300 to Companies House for the reversal. The effect of restoration is that the company will be reinstated to the Companies House Register as if it had never been struck off. You will regain full title to all assets including any monies left in bank accounts. Court Order Restorations are a long-winded process that should be possible to complete within 3 to 4 months but frequently take a year or longer to complete.
If you would like assistance with submitting a DS01, you can open an account with us and use the portal we provide. Our charge for this service is £10. Alternatively, contact us