If you are the owner of a limited company, then you may already be familiar with the term dissolution. You may be looking into ways to close your business and dissolving your company is certainly one way that you can achieve this.
But what is dissolution and how does it work? Today, in our short guide, we will be discussing some of the important factors that you need to familiarise yourself with.
What Is Dissolution?
Dissolving a company, a process also known as “dissolution” or “striking off” involves the closure of a company. The company is closed by removing the name from the official register held at Companies House. Once your company name is removed from the list, it no longer legally exists.
If you would like more information on what dissolution is then it is recommended that you look at some online blogs and resources. Dissolving your company can feel rather daunting if it is something that you have not done before. So, the more you can educate yourself on the matter, the better. This will help you moving forward in the dissolution process as you will have a better understanding of what will happen.
How Do You Dissolve Your Company?
The process of dissolving your company is fairly straightforward. Firstly, you will be required to pay off any creditors, dispose of assets and close the company bank account. Your company must be solvent in order to be dissolved and you cannot be trading. Then HMRC must be informed and a DS01 form should be committed to Companies House.
If you need help with dissolving your company then Future Strategy can certainly help. Their team of experts are on hand to help you through each step of the dissolution process. Their six-step dissolving process has been created with you in mind. They aim to make it as stress-free for you as possible. So, you have peace of mind knowing that you have some professional help on hand. If you are ever in doubt, it is always the best course of action to consult with a professional.
Is Dissolution the Same as Liquidation?
Dissolution and liquidation are two completely different processes. They are not similar in any way. Dissolution can help you achieve company closure in situations where no debt is present. If there is any outstanding debt, it is important that it can be settled in full within 12 months. If it can, then your company can go through the dissolution process.
This is where liquidation differs. You would opt for liquidation if your company was unable to pay off what it owes. The process involves extracting the assets from the company, selling them and then paying off any outstanding debts with the money earned. Unlike dissolution, the liquidation process can be a lot more expensive, and it can also take a lot longer too. So, if you are looking to close your business make sure you have your debts solved. You can learn more about liquidation and what it is through various online resources.