Last Updated on May 31, 2022 by Kimberly Crawford
We saw a whopping 50% increase in business closures in the UK last year compared to 2020, with closures increasing across all major industrial groups. The harsh reality is that very few businesses last forever, and you may need to consider dissolving your limited company at some point.
There are numerous reasons why a business may fail or cease to trade in the UK. Most of the world’s top entrepreneurs and business leaders have a history of tried and failed businesses, primarily due to low revenue generation. However, in some cases, the business owner may decide to voluntarily close the business.
The majority of the time, the business idea did not turn out to be as profitable as expected or predicted, leaving return forecasts severely lacking. As a result, they may need to close their limited company, either temporarily or permanently. Directors frequently decide to close their UK company for a variety of reasons, including ownership transfer, conversion to an LLP, and so on.
When Do You Need To Dissolve Your Company?
Being the Director of a Limited Company is both an interesting and challenging experience. When done correctly, it can provide you with significant financial benefits as well as hours of entertainment. However, things take an unexpected turn, especially when a company’s income is in jeopardy.
Alternatively, your business may have been successful but has now served its purpose, or it may never have gotten off the ground at all and has been dormant ever since. In such a case, you will be required not only to file your corporation tax and accounts on a regular basis, but also to pay for their preparation if you can afford it.
Are you in a similar situation? Are you considering taking a vacation? Is your business not making a profit? And you don’t want to be required to file paperwork with Companies House? Then dissolution is your best bet. Filing for dissolution allows you to close your UK company, as well as all personal liabilities, in a single simple and easy process.
And, to help you with the process and tie up any loose ends, we have created a handy guide that walks you through everything you need to know and the procedures you need to follow to dissolve your company in the UK.
First Thing First; What Is Company Dissolution In The UK?
Dissolving a company is known as ‘dissolution’, which means officially erasing the official registered name of your UK company from Companies House’s register of companies. When a company’s name is removed from this register, it does not exist anymore.
Dissolving a company is done when the company has no debts or when any debts that do exist can be easily paid off and settled in full before the company is dissolved. There are several methods for removing a company from the register, but dissolution is by far the simplest and least expensive. However, dissolution is only available to businesses that meet a specific set of criteria.
What Are The Things You Need To Do For Dissolving Your Company in the UK?
Regardless of the reason for dissolving your company in the UK, it is critical to take the necessary steps to properly dissolve the company, rather than simply leaving it and walking away. As a Director, you must follow regulations while also protecting yourself from potential risk and fines.
There are a few things you should do to make sure everything goes smoothly. The first step is to notify all of your employees about the closure and when it will take place. Following that, you must notify all relevant government agencies, such as HMRC and Companies House. You must also cancel any contracts and transfer any outstanding debts to the appropriate parties. Finally, make certain that all company assets are properly disposed of.
It is possible to completely close down a UK Ltd company in this manner, which means that the business will cease to exist and any assets, liabilities, and debts will be handled by the directors themselves. When your company has no assets or liabilities, this can be a prudent course of action.
How To Dissolve Your Company In The UK?
Now, when your company has no assets or liabilities to deal with and meets the criteria for dissolution, this is a viable option. However, you must understand how to properly close a company through dissolution. Here are a few steps to take:
- Form must be completed and submitted after signing properly by the director in order to dissolve a company.
- The form is then submitted to Companies House, with notifiable parties receiving a copy.
- Once the form is submitted, it takes at least 8 weeks for Companies House to process the application to close your company.
- Following that, a notice of the decision to dissolve the company is published in the Gazette.
- Following this, the company is dissolved after 3 months (approximately) if no objections are raised. Finally, a notice confirming the company’s dissolution was published in the Gazette.
What Are The Challenges In Company Dissolution And How Can We Help?
The process of closing your business is not easy and can be very costly if done incorrectly, especially if there are creditors or outstanding debts to deal with.
There may also be some additional costs associated with being a Director, such as Internal Audit or Statutory Auditing. This is a costly option for those who simply want to keep their heads down and get out of the situation. As a result, it’s a big deal that can be stressful for you.
In such a case, we are here to assist you with our UK company dissolution service. Yes! In addition to assisting you in registering a company, we can assist you in dissolving your UK company while ensuring that all legal procedures are followed.
We will file all necessary forms on time and ensure that the company is properly closed down, in accordance with all legal requirements. We handle everything for you so you can get back on your feet quickly. We will handle all requirements and activities on your behalf to execute the formal dissolution process. You simply need to contact us to begin the process.
Final Thoughts
Whether you started the company from the ground up or joined to take on a new challenge, deciding to close your company can be one of the most difficult challenges you’ve ever faced. And, with so many steps involved in closing your business, it’s critical that you do so properly and in accordance with any legal guidelines.
However, with a comprehensive and professional UK company dissolution service like Icon Offices, the process can be quick and painless. Furthermore, we will guide you through the process as painlessly and inexpensively as possible. Connect with us today to learn more!
