‘Company strike off’ is the term for removing a business from the official register of limited companies . When you no longer need a limited company and wish to close it there are a few considerations.
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Striking off is Not Always Appropriate
If the company has lots of creditor debts then a striking off is not appropriate. If there are creditors each creditor must be written to and they can object to your proposal to Companies House to have the company struck off. If there lots of debts then the company must be liquidated.
Does the Company Have Assets?
Other considerations to bear in mind are does the company have any assets? It may be this is precisely why you want to dissolve the company. In this case it will depend on the value of the assets within the company. Generally if the value is more than £25,000 then the company is likely to need liquidating. A solvent company liquidation is called a members voluntary liquidation.
However is the value of the assets is below £25,000 then you can proceed to cease to trade and apply to Companies House to strike off the company. This template letter can be used to inform your creditors and members if you trade as a limited company and are considering striking the company off the Companies Register.
[Name and address of recipient]
[Your business’s address]
Account No: [Your account number]
I am writing to inform you that [Business name] is technically insolvent and ceased trading on [Date]. The company does not have the necessary assets or money in the bank to enter into liquidation, and therefore invites members and creditors to issue winding-up proceedings if you should wish to do so. If you or the business’s other creditors do not wish to begin formal winding-up proceedings, I will choose to apply to strike the business off the Companies Register under s1003 of the Companies Act 2006.
This will occur three months after the date stated above.
Please find enclosed DS01 from Companies House confirming the striking off aim. [you will need to go to Companies House download and complete DS01 form and send with each piece of creditor correspondence. Follow instructions on the website].
[Your full name]
[Your trading name]