Dissolution of a UK Company. Service offer

If your UK company is no longer needed, it should be dissolved, fulfilling all the conditions and taking all the steps provided for this by the local legislation.

We are happy to assist with the preparation of the company for dissolution and the carrying out of the dissolution itself (either of the options available), including the liaising with the relevant UK authorities.

Time frame for closing a UK company

Strike off – approximately 6 months from the date of submission of all necessary documents;

Voluntary liquidation – approximately 1 year from the date of submission of all necessary documents.

Cessation of business by a UK company

A UK company can be closed either via voluntary liquidation (voluntary winding up) or via voluntary strike off.

Liquidation is normally necessary if, at the time of the decision to close down, the company has accounts payable and receivable and assets to distribute, so you need to understand your goals when choosing the closure option.

In all other cases, the company is usually voluntarily struck off the register. Let us inspect closer these options for cessation of the company’s business.

Strike off

UK legislation has several options for closing a company. The simplest, and therefore less expensive, procedure is striking the company off the register.

The essence of the procedure is that the company’s operations stop at some point and after a while the director reports this to Companies House (CH).

CH accepts the director’s application and initiates the strike off which is completed in about 6 months.

If a company is closed using this procedure, it can be restored to the register within 6 years of the strike off date.

Before filing an application for strike off, it is necessary to deal with the company’s assets (distribute the assets among the members, close the company’s bank accounts, transfer rights to domain names, etc.).

Once the company is struck off the register (i.e. essentially dissolved), all undistributed assets will become the property of the Crown (including money in the company’s accounts).

A UK company can be struck off if the following conditions are met:

the company has not traded in the 3 months preceding the application for strike off (other than taking actions necessary for its dissolution);

the company has not disposed of any property (including securities) in the 3 months preceding the application for strike off;

the company has not changed its name in the 3 months preceding the application for strike off;

the company is not threatened with liquidation (meaning an alternative liquidation procedure, which can be either voluntary or compulsory) or bankruptcy;

the company has no agreements with creditors (a Company Voluntary Arrangement / CVA – an agreement under which the insolvent company repays its debts (or part thereof) to creditors within agreed period of time);

the company has submitted all financial statements up to the date of the decision to close down.

If the company does not meet any of the conditions or has any undistributed assets, it has to use another closure procedure (for example, a voluntary liquidation).

Strike off includes the following steps to be taken by the company:

The members of the company pass a resolution to cease business.
The company clears all its existing obligations.
The bank accounts are closed.
The liquidation accounts are prepared.

To do this, it is necessary to provide information about the company’s activities in the financial year up to the dissolution date (copies):

bank account statements and certificates of account closure;
contracts and agreements made in the financial year;
previously made contracts and agreements which continue in the financial year in question (for example, loan agreements);
underlying documentation disclosing the business of the company in the financial year.

5. Dissolution as such is launched by the director’s application to CH in the prescribed form (Form DS01 which must be signed by the majority of the company’s directors).

A copy of the strike off application must be sent within 7 days to all interested parties. This list may include:

members (shareholders) of the company;
directors who did not sign Form DS01;
creditors;
employees;
managers or trustees of the employees’ pension fund, etc.

If all the conditions are met, an announcement is published in The Gazette stating that the company is going to be struck off the register. If there are no reasons for the delay and no one has filed an objection to the strike off, then after 2 months from the announcement publication date the company is struck off the register (of which a second announcement in The Gazette must be made).

In practice, Companies House (CH) sends a notice of strike off approximately within 6 months of the director’s application. Therefore, in terms of timing, this procedure takes on average 6 months from the date of submission of all documents to CH.

The cost of strike off is USD 1 450. It does not include the cost of preparation of liquidation accounts.

Please note that although the company is considered dissolved, there is an obligation to retain documentation regarding the company, including bank statements, invoices, and receipts, for a period of 7 years from the strike off date.

Such a company can be restored within 6 years of its strike off date.

Voluntary liquidation

There are 3 types of company liquidation:

creditors’ voluntary liquidation (a company cannot fully repay its debts, and the members decide to liquidate it; in this case, an authorised insolvency practitioner is appointed as liquidator to act in the interests of the creditors, and such liquidation does not involve a court);

compulsory liquidation (a company cannot repay its debts, and the director applies to court to liquidate it; this procedure is also carried out with the consent of the company’s members, but in court);

members’ voluntary liquidation (a company is solvent, but a decision is made to liquidate it).

What we are considering here is the third type of liquidation. In this case, the company’s assets are used to pay its debts, and the remaining funds are distributed among the members.

Please note that once a liquidation application is filed, the company’s bank accounts are frozen, and you would need to apply to the court for permission (validation order) in order to access them. The funds that have not been distributed among the members at the time of liquidation of the company become the property of the Crown.

In general, members’ voluntary liquidation goes as follows:

1. 5 weeks before convening the general meeting of members and signing the resolution to dissolve the company, the directors check the assets and liabilities of the company and officially declare its solvency – issue a Declaration of Solvency.

The Declaration, among other things, must indicate the period during which the company will repay all its debts in full (this period cannot be more than 12 months from the liquidation commencement date). The Declaration also contains the Statement of the company’s assets and liabilities.

2. The liquidation itself begins after the meeting of members (shareholders) passes a resolution to voluntarily cease the company’s business.

An authorised insolvency practitioner is engaged as the liquidator in this procedure.

The minimum cost of a voluntary liquidation of a UK company starts at USD 10 000. This price does not include the cost of preparation of liquidation accounts. A more detailed estimate will be provided upon request and depends on the conditions of the liquidation (for example, whether or not the company has assets).

A liquidated company can only be restored by a court order if there are substantial reasons for it (in addition, it is necessary to obtain an independent legal opinion before going to court, which makes the restoration of a liquidated company even more costly).

Fees[1]

Services	Fees (USD)
Striking a company off the register, not including the preparation of the company’s liquidation accounts	1 450
Voluntary liquidation of a company, not including the preparation of the company’s liquidation accounts	from 10 000
Preparation of liquidation accounts	100 – 400 / hour (based on time spent)
Preparation and submission of dormant accounts (for dormant companies)	1 250
Preparation and submission of non-dormant accounts (for trading companies) and conducting of an audit	100 – 400 / hour (based on time spent)
Compliance fee Payable in the cases of: - incorporation of a company, - renewal of a company, - liquidation of a company, - transfer out of a company, - issue of a power of attorney to a new attorney, - change of director/shareholder/beneficial owner, except the change to a nominee director/shareholder, - signing of documents.	350 (standard rate, includes the check of 1 individual) + 150 for each additional individual (director, shareholder, or beneficial owner) or legal entity (director or shareholder) if such legal entity is administered by GSL + 200 for each additional legal entity (director or shareholder) if such legal entity is not administered by GSL 450 (rate for high-risk companies, includes the check of 1 individual) 100 (signing of documents)

[1] The fees are valid as of August 2024.

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