If you are thinking of dissolving a company in the UK, there are a few things to keep in mind. First, you will need to contact the Companies House Registry to find out the steps needed to dissolve a company. Second, you will need to make sure that all of the company’s documents are filed and available to the registry. Third, you will need to pay any taxes owed by the company. Finally, you will need to notify the company’s employees of the dissolution. Let’s take a look at this process in detail.
What does it mean when a company is dissolved?
Whenever a company based overseas ceases to operate in the UK, it has to register this closure with Companies House. The company is required to fill out and submit Form OS DS01. Once this document is registered with Companies House, the company no longer needs to file documents for the UK establishment.
Why would a company be dissolved?
A company might be dissolved by its directors for different reasons:
- This could happen when the company is insolvent.
- Refusing to cooperate with the insolvency practitioner or any other official receiver appointed to the company.
- Continued trading that harms the interests of creditors after the company was declared insolvent.
- Maintaining inappropriate accounting records.
- If a company is no longer required or is not carrying on business, it might be dissolved.
- When a company has entered into formal insolvency proceedings, like liquidation or administration, it might be dissolved after the case administration is complete.
- Inability to pay tax or failing to submit tax returns and other money due in the UK.
- Deliberate removal of assets without paying creditors.
- Substituting the director with someone else to run the company.
- Inability to run the company properly.
- Inability to prepare and file accounts with the Companies House.
- Frauds or fraudulent behaviour.
- Failing to file annual returns with the Companies House.
- Failing to comply with other regulations.
How to dissolve a company
An overseas company that has set up business in the UK is required by law to disclose the following on all order forms, websites, and business letters that are used in carrying on business in the UK:
- Registered address of the company
- Country of incorporation of the company
- Registry that holds the company’s registration
- Company’s head office
- Legal structure of the company
- Liability of the company’s members
- Company’s limited or unlimited liability
- Company being wound up or subject to other insolvency proceedings
- The amount of share capital on websites, business letters, or order forms
When a business includes the names of its directors on its official forms of communication, like business letters, it is required by law that this business disclose the names of all its directors. When a legal person or corporate body is involved, it must disclose its firm or corporate name. This information must be clearly visible to the naked eye.
How long does it take to dissolve a company?
To dissolve a company, you must first handle company assets and then submit Form DS01, signed by a majority of the company directors. Dissolving a company costs £10, payable via non-company check. Companies House will inform you via letter if the form is filled out correctly. If there are no objections, the company will be dissolved after two months. A second notice will be published in the Government Gazette, making the company legally nonexistent.
What happens when a company is dissolved?
Once a company is dissolved, it will no longer exist as a legally recognized entity. This means that all trade and business activity related to the company will cease. The company’s name will be removed from the Companies House register, and the company will have no more filing requirements.
Can a dissolved company still operate?
Despite dissolving, a business entity remains an invalidated business entity with no rights towards trading or other forms of operation. Nevertheless, this business entity can operate in the UK when it has to settle internal matters or those related to governmental affairs. These matters could involve completing voluntary or involuntary legal proceedings concerned with the dissolution of a company.
Such matters as the payment of dues, the fulfilment of debts, and the release of stipends may be allowed despite the dissolved status of the company. When it comes to assets, both liquidated and non-liquidated, that are being distributed to shareholders or creditors, these principles still apply. This is often done in order to fulfil equity debt or other similar obligations.
How to reinstate a dissolved company
If you were a director or shareholder of a company that was struck off the register and dissolved within the last six years, you can apply for administrative restoration. This means the company will be restored to its former state, with any outstanding proceedings concerning its dissolution considered resolved. Otherwise, you’ll need to get a court order to have the company restored.
Form your company in the UK with Workhy
Workhy provides online company formation services for worldwide businesses without actually traveling to or residing in the UK. To simplify matters further, Workhy assists its customers even with the dissolution process in case they want to close their companies after establishment. Workhy also offers additional services, including opening online bank accounts, applying for VAT, preparing VAT returns, managing financial processes, and monthly or yearly accounting. Click here for more information.