What if there was a way to just get rid of my dormant company simply and cost effectively?

24 June 2010

Voluntary Dissolution

There is and it could be useful for you. It's called voluntary dissolution and it can remove companies from the Companies House Register if certain conditions are met. Beware though you cannot use dissolution unless ALL of these conditions are met (see detailed guide below).

Providing you meet the conditions then this is a very useful and cost effective tool, AND there is no need to incur liquidation costs, no investigation into your directors' activity and little publicity.....

This process is also known as a voluntary dissolution. This is a provision in the Companies Act to allow the removal of the company from the Companies Register, typically when the company is dormant.

If the company serves no useful purpose, its dissolution removes the need for filing annual returns and accounts. But bear in mind that the company can only be dissolved (removed from the Companies House register), if the following conditions apply:

•The company has not traded for three months; this must be a genuine cessation of trade!

•The company has no assets or property or cash at bank.

•The creditors must be circulated requesting their permission for the company to be dissolved under this process.

•Creditors are given three months to consider the request to dissolve the company and can reject such request.

•The company cannot have changed its name in this period.

•The company may not have disposed of any property or assets (this may include land and buildings, plant and equipment, debtors and other assets).

Please note that paying off debts does not necessarily constitute trading, but for detailed advice on this and all other aspects of dissolution, please call on 0800 9700 539 for further advice.

Dissolution cannot be used if:

Any formal insolvency procedure is in place or proceedings have been commenced. Procedures such as a liquidation, CVA, Administration, receivership or compulsory liquidation under the Insolvencies Act 1986, or scheme of arrangement under the Companies Act 2006.

If any petition has been issued against a company (for administration or compulsory liquidation) then dissolution cannot be used.

Advantages of dissolution:

•It is a quick and clean removal of a dormant company from the Companies House Register.

•Dissolution avoids the costs of liquidation, fees and expenses.

•It avoids formal investigation into the conduct of the directors as required in liquidation or receivership.

Disadvantages:

•Creditors may reject the application; their permission is required to proceed with a dissolution.

•Any shareholder, creditor or liquidator can apply to revive the company for up to 20 years after dissolution.

Want to know more?

See here for the rest of this detailed guide to DISSOLUTION

Or call us now on 0800 9700539 and get some expert advice, we'll help you decide if you can dissolve it with our step by step programme.