> Strike Off and Dissolution

Strike Off and Dissolution

Why voluntary strike-off does not work for a company that owes money — and why dissolution is no longer a way out.

What strike off is

Voluntary strike off is an application by the directors, on form DS01 with a £44 fee, to have the company removed from the register. If nobody objects the company is dissolved after roughly three to four months, and anything left in it passes to the Crown.

It is designed for dormant companies with nothing outstanding. It is routinely attempted by companies that owe money, and it routinely fails.

Why it fails when there are creditors

Every creditor has to be told within seven days of the application, and any of them can object. HMRC objects as a matter of course where there are unfiled returns or arrears, and Companies House is notified automatically.

What usually happens is that the application is blocked and a creditor responds by petitioning to wind the company up instead — which leaves the director in a worse position than if they had done nothing.

Dissolution is not a clean break

This is the part most directors have not caught up with. Since 2021 the Insolvency Service has been able to investigate the conduct of directors of companies that have already been dissolved, without going through the old process of restoring the company to the register first. It looks back at conduct from before the rules changed.

A dissolved company can also be restored by a creditor who wants to pursue a claim or put it into liquidation. Dissolution is not the end of the story and should not be planned around as though it were.

When it is the right answer

Dormant company, no creditors, nothing owed, returns up to date. In that situation it is quick and cheap and there is no reason to do anything else.

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