In this video, Michael Chamberlain takes us through the main points of company dissolution.
Who is it for?
Voluntary Strike Off and Dissolution
In what circumstances may a company apply to be struck off the register?
A company may apply to the registrar to be struck off the register and dissolved. The company can do this if it is no longer needed.
How Chamberlain & Co can help
Given the precise legalistic nature of the process and the risks involved for the directors in getting it wrong, we recommend that they obtain professional assistance. Chamberlain & Co are happy to undertake the entire process on behalf of the directors, as a bespoke service.
When can I not apply to strike my company off the register?
The company may not make an application for voluntary strike off if, at any time in the last 3 months, it has:
- Traded or otherwise carried on business.
- Changed its name.
- Made a disposal for value of property or rights that, immediately before ceasing to trade or otherwise carry on business, it held for the purpose of disposal for gain in the normal course of trading or otherwise carrying on business.
- Engaged in any other activity except one which is necessary or expedient for the purpose of.
- Making an application for strike off or deciding whether to do so.
- Concluding the affairs of the company.
- Complying with any statutory requirement.
A company cannot apply to be struck off if it is the subject, or proposed subject, of:
- Any insolvency proceedings such as liquidation, including where a petition has been presented but has not yet been dealt with.
- A section 895 scheme (that is a compromise or arrangement between a company and its creditors or members).
However, a company can apply for strike off if it has settled trading or business debts in the previous three months.
What happens when Companies House receives the application?
The registrar will publish notice of the proposed striking off in the Gazette to allow interested parties the opportunity to object.
What if the company ceases to be eligible or I change my mind and want to withdraw my application?
The directors must withdraw the application if they change their mind or the company ceases to be eligible for striking-off.
Can anyone object to dissolution, how and why?
Any interested party can object to the registrar if they believe the company is ineligible for the process.
Offences and penalties
It is an offence:
- To apply when the company is ineligible for striking-off.
- To provide false or misleading information in, or in support of, an application.
- Not to copy the application to all relevant parties within seven days.
- Not to withdraw application if the company becomes ineligible.
The offences attract a fine of up to a maximum of £5,000 on summary conviction (before a magistrates’ court or Sheriff Court) or an unlimited fine on indictment (before a jury). If the directors breach the requirements to give a copy of the application to relevant parties and do so with the intention of concealing the application , they are also potentially liable to not only a fine but also up to seven years imprisonment. Anyone convicted of these offences may also be disqualified from being a director for up to 15 years.
What happens to the assets of a dissolved company?
From the date of dissolution, any assets of a dissolved company will be ‘bona vacantia’. Bona vacantia literally means “vacant goods” and is the technical name for property that passes to the Crown because it does not have a legal owner. The company’s bank account will be frozen and any credit balance in the account will be passed to the Crown.