How to strike off and dissolve your contractor limited company

In this article, we look at the processes involved in closing down your limited company permanently — to have it struck off the Companies House register and dissolved.

These steps apply to the dissolution of a solvent limited company, which is a relatively simple and inexpensive process.

Before you read on, you should be aware that you must distribute any remaining company assets before the strike-off occurs. Otherwise, they will pass to the Crown as bona vacantia.

Alternatives to striking off your company

• If you’re not sure that dissolution is the answer and intend to use your company again in the future, you can choose to keep it dormant instead.
• If you have significant retained profits (typically over £25,000), you may be better off using a Members’ Voluntary Liquidation (MVL) for tax efficiency.
• If your company cannot pay its debts, you should seek professional advice and explore formal insolvency options.

How to strike off your limited company

Tell all interested parties of your decision to dissolve the company

Inform clients, suppliers, and any other relevant parties that you intend to close the company. If there are creditors or other shareholders, you must notify them in case they object.

Pay off any outstanding debts

Assuming the company is solvent, it must settle all outstanding liabilities. This will usually include final tax obligations.

Cancel your VAT registration

Cancel your VAT registration (if applicable). You can do this online or submit form VAT7.

Run the final company payroll

Run the final payroll for staff and directors. This is done via your payroll software by submitting a final Full Payment Submission (FPS) or Employer Payment Summary (EPS). See also PAYE and payroll requirements.

Issue all employees with a P45

Provide a P45 to all employees and directors on their final day.

Submit your final accounts and tax return to HMRC

Your accountant should prepare and submit the company’s final accounts and Corporation Tax return to HMRC.

You will also need to file final accounts with Companies House as part of the normal filing requirements.

Pay your company’s Corporation Tax liability

Pay the final Corporation Tax bill. Payment is normally due nine months and one day after the end of the accounting period.

The company cannot be dissolved until all tax liabilities are settled.

Distribute any remaining assets to shareholders

Once liabilities have been cleared, any remaining funds can be distributed to shareholders.

This is often done as a final distribution. Depending on the amount, it may be treated as income or capital. See dividend rules and take advice where needed.

Shut down the company bank account

Once all transactions are complete, close the company bank account.

Start the Companies House dissolution process

Once the above steps are complete, you can apply to Companies House to have the company struck off.

The company must not have traded or changed its name within the previous three months.

A director submits form DS01 and pays a small fee. If there are multiple directors, at least half must sign.

Inform interested parties about the dissolution

Within seven days of submitting form DS01, you must notify shareholders, creditors, employees, and any directors who did not sign the application.

Intention to strike off published in the Gazette

Companies House will publish a notice in the Gazette (London, Edinburgh or Belfast).

The company is dissolved

If no objections are received, the company is usually struck off around three months after the notice is published.

A second notice confirms the dissolution.

Further information

For more detail, refer to the Companies House official guidance.

You should seek professional advice before closing a company, particularly where tax or retained profits are involved.