How does the Dissolution Process Work?

Dissolution is a simple process that starts with filing a form at Companies House. A notice is sent to any creditors, certain other parties and the Gazette. Around 3 months later, if no one has objected, a second Gazette notice is published and the company is dissolved from the Register.

Decision to dissolve

Dissolution is a process that is usually undertaken by a company’s directors, by passing a board resolution to dissolve the company. However, some company’s provisions may require that the members approve a Dissolution application. Accordingly, you will need to check the company’s Articles or Shareholders Agreement.

What are the necessary criteria to dissolve my company?

You are able to dissolve your company if it:

Has not traded or sold stock in the last 3 months;
Has not changed its name in the last 3 months;
Is not threatened with Liquidation proceedings; and
Has no current agreements with its creditors either informally or formally (such as a Company Voluntary Arrangement).

Submit DS01 Form

Once the resolution to dissolve has been properly approved, you will need to submit a DS01 Form, together with the relevant fee to Companies House.

The directors who make the application must, within 7 days of sending the application to the registrar, send a copy to:

Members, usually the shareholders
Creditors, including all existing and likely creditors such as:
- Banks
- Suppliers
- Former employees if the company owes them money
- Landlords or tenants (for example, where a bond is refundable)
- Guarantors
- Personal injury claimants
- HMRC and Department of Work and Pensions (DWP)
Employees
Managers or trustees of any employee pension fund
Any directors who have not signed the form

Submit DS01 Form continued…

The company’s directors must also send a copy of the application to any person who, at any time after the application has been made, becomes a:

Director
Member
Creditor
Employee
Manager or trustee of any employee pension fund

This must be done within 7 days of the person becoming one of these.

This obligation continues until the dissolution of the company or the withdrawal of the application. You’ll be committing an offence by not sending the notice to the relevant parties, and could face a fine or, in the most serious cases, a maximum of a 7 year prison sentence.

Once Companies House has received the DS01, it will:

Register the Dissolution information and publish this on the Public Register of Companies;
Send an acknowledgement to the contact address on the DS01 form;
Send notification to the company‘s registered office address;
Publish a notice in the Gazette indicating the company’s intention to strike itself off; and
Publish a copy of the Gazette notice on the Public Register.

If no objections are received

The company will be dissolved after two months from the notice in the Gazette has passed. A second notice will then be published in the Gazette and on Companies House stating that the company does not legally exist anymore.

If objection/s are received

After an objection is made, the objecting party has around 6 months to undertake further action, which would normally take the form either debt recovery or winding up proceedings. If no further action is undertaken within that timeframe, then the dissolution process will usually recommence. However, Companies House is likely to suspend the application for for several more months if the interested party maintains its objection.

If further action is taken by creditors

Creditors who object to a dissolution application have two options available to them, being debt recovery or winding up proceedings.

If legal proceedings are commenced and an objection is submitted, then the dissolution will be suspended. However, if they are subsequently abandoned for whatever reason, the dissolution will recommence unless there is another objection submitted.

Debt Recovery Proceedings

Debt recovery proceedings against a company that is looking to be dissolved will have little impact save from delaying the process. This is because it will be highly unlikely that the company will have any assets against which the creditor can subsequently enforce proceedings.

Winding Up Proceedings

Winding up proceedings against a company that is looking to be dissolved can have far reaching consequences. If the proceedings are progressed to their conclusion, this will result in the company being placed into Compulsory Liquidation. Either the official receiver or an Insolvency Practitioner who works within the private sector, will take the appointment as Liquidator.

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