Means of Dissolving a UK Company
Forming a company bestows certain statutory obligations on the directors of that entity. In cases where the company is no longer required, certain steps must be taken to dissolve it.
Where the directors of a business choose repeatedly not to comply with the requirements to submit annual returns for example, Companies House might well commence dissolution proceedings which will result in the striking off of the company.
Although the above might achieve the goal of the company being dissolved, it also exposes the directors to fines and penalties which may be levied due to their non compliance with their duties and the law.
By far, the safest method of ending a company is the voluntary dissolution method under the supervision and and with the permission of Companies House.
Criteria for Voluntary Company Dissolution
In order for a company to apply for voluntary dissolution it must meet the following conditions and criteria:
- It must have had the same name for a period of at least three months. If the company has changed it name, it must wait until the three month period has lapsed.
The requirement only exists for the company’s official registered title name and does not relate to any business name it trades under.
- It must have been a dormant company with no significant transaction or trading activities for a period of thirteen weeks.
The winding down or otherwise curtailment or downsizing of operations within this period is not sufficient for it to qualify for voluntary dissolution under the current criteria.
- Within the last three months, it must not have engaged in any of its normal trading activities or sold any of the goods or services which formed part of its usual business services when it was active.
Items which were incidental to the company carrying on its trade may be liquidated.
- It must not have carried out any new trading activity in the proceeding thirteen weeks, although actions which are for the purpose of tidying up any current arrangements are permitted.
In addition, the company must not be subject to any other petition for it to be wound up and struck-off.
