Can I close a company online?

If you have a limited company that you no longer need or want, it is possible to close it quickly online, allowing you to retire, return to employment or move on to your next venture.

There are several benefits of closing a company online. Firstly, it’s quick. Once you have submitted the application form, it typically takes two months for your company to be struck off the register. It’s also cheap. You can complete the Voluntary Strike Off procedure without having to pay a liquidator’s fee. 

There are a few things to bear in mind, though, when closing a company online. Here we explain how the process works, who can apply and whether there may be more tax-efficient options.

Submitting your Strike Off application is the final part of the process. Before that, there are several steps you must take to prepare your company for closure. That includes:

• Ceasing trading – Make staff redundant, bring contracts to an end and cease all trading activities. You cannot have traded for three months before applying for Strike Off. 
• Pay any outstanding liabilities – Pay landlords, suppliers, employees, utility providers and any other parties you owe money to. 
• Sell or transfer business assets – Sell or transfer the assets away from the company and distribute the proceeds among the shareholders. 
• File final tax returns – Submit a Corporation Tax return to HMRC, deregister from VAT and PAYE and pay any tax liabilities. 
• Notify interested parties – Inform all interested parties that you have stopped trading and intend to dissolve the company. That includes HMRC, creditors and shareholders.
• Close business bank accounts – Withdraw any funds and formally close your company’s bank accounts. 

You must take these steps before applying for Strike Off to avoid objections and delays. If the company still owes money or has unresolved obligations, an interested party may object to the Strike Off, and Companies House will suspend the application while the issue is resolved.

In particular, it’s crucial to sell or transfer company assets away from the business and close its bank accounts. That’s because, if the company is dissolved with cash or assets still in its name, they will become the property of the Crown, and recovering them can be a protracted process.

Once you have completed the above steps, we will prepare and file the Strike Off application with Companies House. To proceed, more than half of the directors must sign the application, which they can do digitally. We’ll then notify you when your application has been accepted.

Within seven days of submission, you must send a copy of the application to anyone who may be affected. That includes creditors, shareholders and pension providers. A notice will also be published in the Gazette, giving stakeholders two months to raise any objections.

If no objections are received and Companies House is satisfied, a second Gazette notice will be published confirming that the company has been dissolved. That usually takes place within two to three months of the submission date. You will also receive a confirmation notice from Companies House.

Striking off a company online is a low-cost and straightforward process, which makes it attractive to many business owners. However, if your company holds significant assets or cash reserves, it may not be the most tax-efficient method of closure.

When you dissolve a company, you must pay tax on the profits or assets that you distribute among the shareholders. Using the online Strike Off procedure, profits of up to £25,000 are treated as capital distributions.

The shareholders will pay Capital Gains Tax (CGT) on the profits according to their individual tax rates. They may also be eligible for Business Asset Disposal Relief, which reduces CGT to 14% for disposals made after 6 April 2025 and before 6 April 2026, and 18% for disposals made after 6 April 2026. 

However, if the total distribution exceeds £25,000, the entire sum, and not just the amount over £25,000, is treated as income. It is then subject to dividend tax at the following rates, and Business Asset Disposal Relief is not available.

• 8.75% (basic rate)
• 33.75% (higher rate) 
• 39.35% (additional rate)

A Members’ Voluntary Liquidation (MVL) is another procedure you can use to close a solvent company. In this case, you must appoint a licensed Insolvency Practitioner (like us) to close the company on your behalf, and that will involve a fee. Simple MVLs usually start at around £1,500.  

Liquidation is a formal legal procedure, and we will administer the process on your behalf. You do have certain obligations, such as signing documents and approving resolutions, but you can do that online. 

The main benefit of a Members’ Voluntary Liquidation over Strike Off is that there is no £25,000 limit. All distributions are treated as capital gains rather than income, which can significantly lower your tax bill. 

If you’re eligible for Business Asset Disposal Relief, you can further reduce the rate of CGT you pay. That makes this closure method particularly attractive for shareholders of companies with significant retained profits.

If you are ready to close your business or would like to learn more about your company closure options and their implications, please get in touch with our team. We offer a free telephone consultation to discuss your circumstances and recommend the next steps. You can also arrange a face-to-face meeting at one of our 100+ offices throughout the UK.