Company dissolution, also known as voluntary strike-off, closes your company and removes its name from the Companies House register. The process can be undertaken by yourself as a director and involves winding down your business affairs over several months.
You must repay all your creditors, for example, close down your payroll scheme, pay all tax liabilities, and also make any redundancy payments to staff. To be eligible for this form of closure your company must not have traded or changed its name in the last three months.
Additionally, you must not have made any formal agreements with creditors on behalf of the business. Voluntary dissolution is inexpensive, which makes it a popular choice, but there are two key elements you need to consider before applying for strike-off.
- Is your company definitely solvent? If not, you could face scrutiny from the Insolvency Service for failing to prioritise your creditors.
- Are your business affairs complex or relatively straightforward? The formal MVL option may be more suitable if your business affairs are complex, and can offer you considerable tax benefits.