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When a company has ceased to trade there are a couple of options that can be taken to close the company down.

The first option is a formal members voluntary liquidation, this will cost as you will need to engage with an Insolvency Practitioner to carry this out for you but there maybe tax savings in going down this route.

The second option is to use form DS01 to strike the company off.  This may be more cost effective if the company has reserves under £25,000 that will automatically be classed as a capital distribution rather than an income distribution if this route is taken where the reserves are in excess of £25,000.

Form DS01 can only be filed once the company’s accounts and tax affairs are all up to date and there are various other conditions that need to be met that can be found here.

Once form DS01 is filed with Companies House all of the assets of the company pass to The Crown. This also includes bank accounts so it is important to ensure the bank account is emptied and closed before submitting the form to ensure you don’t lose any money unnecessarily.             

If you have a company that you need to close down or would like any advice or assistance in this area please contact us on 01282 864 228 or use our simple online contact form to arrange a free initial consultation.

Date published 15 Oct 2021

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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