Company Strike Off

What is company strike off (voluntary dissolution)?

Company strike off, also known as voluntary dissolution, is the simplest and cheapest way to close a limited company you no longer need. You apply to Companies House to have the company removed from the register, and after a short waiting period, it will be struck off the register of active companies and will cease to exist.

However, strike off is only appropriate for solvent companies with no outstanding debts. If your company owes money it cannot repay, you’ll need a formal insolvency procedure such as a Creditors’ Voluntary Liquidation (CVL) instead. And if you’re closing a solvent company with significant assets to distribute (typically over £25,000), a Members’ Voluntary Liquidation (MVL) may be more tax-efficient and cost-effective.

This page explains when strike off is appropriate, how the process works, and what can go wrong.

Can I strike off my company?

While strike off can be a great option, there is a strict eligibility criteria for being able to utilise this option. Your company is eligible for voluntary strike off if it meets all of the following conditions:

• The company is solvent meaning it can pay all its debts in full, including tax liabilities
• The company has not traded or sold any stock in the last three months
• The company has not changed its name in the last three months
• There are no active insolvency proceedings, no Company Voluntary Arrangement (CVA), or other formal arrangement with creditors is in place
• There are no outstanding legal proceedings against the company
• The company is not subject to a winding up petition

If your company doesn’t meet these conditions, strike off is not a viable closure option. In particular, if the company has debts it cannot pay, attempting to strike it off could lead to the application being rejected once outstanding creditors become aware of your intentions.

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How does the strike off process work?

The strike off process is initiated by submitting a DS01 form to Companies House. Here’s the step-by-step process to striking off a company:

Before applying

Before you submit the DS01 to Companies House, you need to wind up the company’s affairs. This means you must:

• Close the company’s payroll scheme with HMRC and settle any outstanding PAYE and National Insurance
• File the company’s final accounts and corporation tax return with HMRC
• Pay any outstanding tax liabilities, including VAT and corporation tax
• Deregister for VAT (if applicable)
• Deal with any remaining employees including making any redundancy payments, final wages, and holiday pay
• Distribute any remaining assets to shareholders before submitting the strike off application
• Close the company’s bank accounts

Submitting the application

1. Complete the DS01 form (available from Companies House or online) and have it signed by a majority of the company’s directors
2. Submit the form to Companies House with the application fee
3. Within 7 days of submitting, send a copy of the DS01 application to all interested parties. This includes any directors who haven’t signed it, all shareholders, all outstanding creditors, all employees, and pension fund managers

The Gazette notice and objection period

Once Companies House accepts the application, a notice is published in the Gazette announcing the proposed dissolution. This gives any interested party, including creditors, HMRC, and employees, two months to object.

If no objections are received, a second Gazette notice is published confirming the company has been dissolved. If an objection is made, the application is suspended.

Company is dissolved

The company is officially dissolved approximately three months after the first Gazette notice, provided no objections have been received. From this point, the company ceases to exist as a legal entity.

What happens if the strike off is rejected?

Strike off applications can be rejected or suspended for several reasons. The most common is an objection from HMRC, who routinely monitor dissolution applications and will block any where they believe tax is owed. See our detailed guide to what happens when a strike off is rejected for more detail.

Other common reasons for a strike off application being rejected include:

• A creditor objects because they are owed money by the company
• An employee or former employee raises a claim (e.g. unfair dismissal, unpaid wages)
• The company has traded or changed its name within the last three months
• The directors failed to notify all interested parties within 7 days of the application

If the application is rejected and the company has debts it cannot pay, you’ll need to consider a formal insolvency procedure as an alternative closure method. In most cases, that will be a CVL.

What are the risks of striking off a company?

Strike off is a cheap and simple company closure option, but it comes with risks that directors need to understand:

Creditors can object and restore the company
Even after a company has been dissolved, creditors can apply to the court to have it restored to the register. If the company is restored and found to have been insolvent at the time of dissolution, the directors could face serious consequences.

Personal liability risk
If you strike off a company that has outstanding debts you could be accused of misconduct. This could lead to director disqualification or personal liability for the company’s debts.

Bona Vacantia
Any assets remaining in the company at the point of dissolution automatically become the property of the Crown (known as Bona Vacantia). This includes cash in bank accounts, property, intellectual property, and any other assets. Once assets pass to the Crown, recovering them is extremely difficult and costly.

Tax implications for distributions over £25,000
If the total distribution to shareholders exceeds £25,000, HMRC treats it as income rather than capital, meaning it’s taxed at dividend rates (up to 33.75%) rather than Capital Gains Tax rates. For distributions above this threshold, an MVL is almost always more tax-efficient.

Strike off vs other closure options

Strike off vs MVL
For a detailed comparison, see our guide to MVL vs strike off. In summary: if your distribution is under £25,000, strike off is usually the best option. Above £25,000, an MVL will typically save you significantly more in tax than it costs in professional fees.

Strike off vs CVL
If your company is insolvent, strike off is not an option and you need a CVL if you want to close the company down. Attempting to strike off an insolvent company is not only likely to be blocked by creditors, but could also lead to accusations of misconduct against you as a director. For a full comparison, see our guide to strike off vs liquidation.

Strike off vs making the company dormant
If you’re not sure you want to close the company permanently, making it dormant is an alternative. A dormant company stays on the Companies House register and you can reactivate it later if needed. This protects your company name from being taken by someone else, however, you’ll still need to file annual accounts and a confirmation statement each year.

Can I strike off a company with debts? 

If your company has outstanding debts it cannot afford to repay, strike off is not appropriate. Creditors will almost certainly object, and HMRC will block the application if tax is owed. If you attempt to dissolve a company with debts, you should expect your application to be objected to.

If your company has debts, the appropriate route is usually a CVL. If you’re unsure whether your company is solvent, see our guide to the main insolvency warning signs you should be aware of.

What should I do next?

If your company is solvent, has no debts, and you’re confident there are no hidden liabilities, strike off is a straightforward process you can handle yourself. But if there’s any uncertainty about the company’s solvency, potential HMRC claims, contingent liabilities, or the tax treatment of distributions then getting professional advice first could save you significant problems down the line.

At BTG Begbies Traynor, we have a team of licensed insolvency practitioners based across the UK who can guide you through potential options for your company.