I Want To Close My Company
There is and it could be useful for you. It’s called voluntary dissolution and it can remove companies from the Companies House Register if certain conditions are met. Beware though dissolution can only be used if ALL of these conditions are met (see detailed guide below). Find out how to dissolve your company
If you have any disputes or legal actions with creditors then dissolution is probably not a solution you can use.
Providing you meet the conditions then this is a very useful and cost effective tool, AND there is no need to incur liquidation costs, no investigation into your directors’ activity and little publicity…..
"This is what I need, but I wish I could buy a step by step guide to dissolution. I am busy with other things and don't have time to learn all about the process"!
What if there was a way we could quickly get on with closing our unwanted company?
Here is the table of contents of the Unique Dissolve Your Company Programme built by our Experts.
Contents of the 50 pages of the programme
- Introduction to the Programme
- Section 1: How Did You Get to Here?
- Section 2: Definitions of Insolvency
- The Cashflow Test
- The Balance Sheet Test
- Legal Action Test
- Section 3: Compliance with Dissolution Rules
- Section 4: User Guide & Setting up the Control Files
- Section 5: Preparing and completing the section 1000 Form
- Section 6: Advantages and Disadvantages of Dissolution
- Section 7: Rejection: Who May Object to the Dissolution and Why Would They?
- Section 8: FAQs About Dissolution
- Section 9: The Reply from The Registrar
- Section 10: Summary
- Appendix 1: Your file and timetable templates
- Appendix 2: Your letter templates
- Appendix 3: Sample Board Resolutions for Each Step
- Appendix 4: Glossary of Terms in Insolvency and Turnaround
- Appendix 5: Compliance Guides
Detailed Guide To Dissolution
This process is also known as a voluntary dissolution. This is a provision in the Companies Act to allow the removal of the company from the Companies Register, typically when the company is dormant.
If the company serves no useful purpose, its dissolution removes the need for filing annual returns and accounts. But bear in mind that the company can only be dissolved (removed from the Companies House register), if the following conditions apply:
- The company has not traded for three months; this must be a genuine cessation of trade!
- The company has no assets or property or cash at bank.
- The creditors must be circulated requesting their permission for the company to be dissolved under this process.
- Creditors are given three months to consider the request to dissolve the company and can reject such request.
- The company cannot have changed its name in this period.
- The company may not have disposed of any property or assets (this may include land and buildings, plant and equipment, debtors and other assets).
Please note that paying off debts does not necessarily constitute trading, but for detailed advice on this and all other aspects of dissolution, please call on 0800 9700 539 for further advice.
Dissolution cannot be used if:
Any formal insolvency procedure is in place or proceedings have been commenced. Procedures such as a CVL, CVA, Administration, receivership or compulsory liquidation under the Insolvencies Act 1986, or scheme of arrangement under the Companies Act 2006.
If any petition has been issued against a company (for administration or compulsory liquidation) then dissolution cannot be used.
Advantages of closing dissolution:
It is a quick and clean removal of a dormant company from the Companies House Register.
Dissolution avoids the costs of liquidation, fees and expenses.
It avoids formal investigation into the conduct of the directors as required in liquidation or receivership.
Creditors may reject the application; their permission is required to proceed with a dissolution.
Any shareholder, creditor or liquidator can apply to revive the company for up to 20 years after dissolution.
They may revive the company of the following applies:
Notice required to creditors was not given correctly or adequately or it comes to light that the company was trading during the three months period prior to making application to dissolve.
It comes to light that some fraud, misfeasance or other unjust action was committed by the company or the directors before or during the dissolution process.
Whilst a commonsense approach to collecting assets and distributing them to creditors in proper order usually suffices, there is no prescribed method. This could of course be open to abuse and if performed incorrectly can lead to a revival of the company as above. If you have any doubt as to the application of this methodology please do not hesitate to contact us by e-mail or on our freephone number 0800 970 0539.
Dissolution cannot terminate leases, HP agreements or contingent liabilities. Receivership, Administration, CVL, or CVA need to be used whenever such circumstances exist. This is clearly a very difficult technical area and the directors should take proper advice from a turnaround practitioner or insolvency practitioner who is well-versed in the rules in this regard.
From a creditors’ perspective dissolution avoids a formal investigation into the director’s conduct. Of course if any transactions such as a preference, transactions defrauding creditors or basic fraud have been committed dissolution does not afford an investigation into past conduct. If the creditors are of the opinion that such transactions may have occurred they can of course refuse permission and the company will either be liquidated voluntarily or compulsorily.