A limited company does not end when it stops trading. It ends when it is removed from the Companies House register, and for a solvent company that has finished its purpose the usual route is voluntary strike-off under section 1003 of the Companies Act 2006. The application itself is a single form and a £13 fee. What makes the process go wrong is everything that has to happen before the form, and the order it has to happen in. This guide sets out that sequence, the tax on getting the money out, and the situations in which strike-off is the wrong tool.
Who can use it
A company can apply for voluntary strike-off if, in the three months before the application, it has not traded or otherwise carried on business, has not changed its name, has not sold property or rights that it held for the purpose of its business, and has not engaged in any activity other than winding up its affairs or complying with a statutory requirement. It must have no outstanding liabilities, must not be subject to any insolvency proceedings or a court-sanctioned arrangement, and must have paid everything it owes, including to HMRC. A company that cannot pay its debts cannot use the process; it needs a creditors' voluntary liquidation through a licensed insolvency practitioner, and directors who strike off an insolvent company face personal liability and disqualification.
The sequence before the form
Stop trading and decide the cessation date; the three-month clock runs from the last trading activity. Issue final invoices and collect what is owed. Pay every creditor, including suppliers, loans, the director's own expenses and HMRC. Prepare and file the final statutory accounts and the CT600 for the last accounting period, which may be shortened to the cessation date by filing form AA01, and pay the Corporation Tax. Deregister for VAT within 30 days of the last taxable supply, with a final return accounting for any stock and assets held. Close the PAYE scheme with final submissions and issue P45s. Tell HMRC the company has ceased trading. Distribute the remaining assets to the shareholders. Close the bank account. Only then file the DS01.
Anything the company still owns when it is dissolved, including money in a bank account, passes to the Crown as bona vacantia and can only be recovered by restoring the company, which is slow and expensive. Emptying the company completely before dissolution is not optional.
The application and the notices
Form DS01 is filed online with the £13 Companies House fee and signed by a majority of the directors. Within seven days of filing, a copy must be sent to every shareholder, every creditor including HMRC, every employee, every director who did not sign, and any manager or trustee of an employee pension scheme. Failing to send the notices is an offence. Companies House publishes a notice in the Gazette inviting objections; if none is received within two months, the company is struck off and a second notice confirms its dissolution. The whole process typically takes three to four months.
Objections
HMRC is notified of every application and objects where tax returns are outstanding or tax is unpaid, which suspends the process until the position is resolved and can be repeated. Creditors, including anyone the company owes money to, can object. The way to avoid objections is to have filed and paid everything before applying, and to have told HMRC the company has ceased, which is the point of the sequence above. If circumstances change after the application, for example trading resumes or a creditor emerges, the application must be withdrawn on form DS02.
Tax on the final distribution
Money distributed to shareholders on a dissolution is treated as capital, and taxed under Capital Gains Tax, provided the total distributed is £25,000 or less. Capital treatment means the £3,000 annual exempt amount, the 18% and 24% rates, and business asset disposal relief at 18% where the shareholder held at least 5% and was an officer or employee for two years. Above £25,000 the whole distribution is taxed as a dividend, at 10.75%, 35.75% or 39.35%, unless the company is wound up through a formal members' voluntary liquidation by a licensed insolvency practitioner, which preserves capital treatment and is usually worth its cost for balances well above the threshold. The anti-phoenixing rules can also deny capital treatment where the same person carries on a similar business within two years.
The decision about how to extract the final balance therefore needs making before anything is distributed, and depends on the amount, your other income and your plans.
Records after dissolution
The former directors must keep the company's records for seven years after dissolution for HMRC purposes and six for Companies Act purposes: accounts, tax returns, bank statements, payroll and VAT records. HMRC can still enquire into the company's affairs after dissolution by restoring it.
Restoration
A company can be restored to the register within six years, by administrative restoration if it was struck off compulsorily or by court order otherwise, usually because an asset was overlooked, a claim arises, or someone needs to sue the company. It is slow and costly, and the thorough sequence before dissolution exists to make it unnecessary.
When not to strike off
If the company owes money it cannot pay, a creditors' voluntary liquidation is the only lawful route. If it has significant assets above £25,000 to distribute, a members' voluntary liquidation may save substantial tax. If there is any chance the company will be needed again, or the name has value, making it dormant costs around £130 a year and keeps the option. If Companies House has already begun compulsory strike-off for non-filing, the options are to let it proceed, which leaves the filings outstanding on the record, or to bring the company up to date and apply voluntarily.
Getting it done
Our pre-closure check at £29 confirms whether the company qualifies and lists what must happen first. The strike-off service at £59 plus the £13 Companies House fee manages the application, the notices and the Gazette to dissolution, and the £349 package adds the final accounts and CT600. If dormancy is the better answer, make a company dormant handles that transition instead.
A worked example
A contractor's company stopped trading on 30 June 2026 when she took a permanent job. It had £18,000 in the bank, no debts and no employees other than her. The accounting period was shortened to 30 June, final accounts and a CT600 were filed in August and the Corporation Tax of about £2,100 paid, VAT was deregistered with a final return in July, the PAYE scheme was closed with a final submission and her P45, and HMRC was told the company had ceased. On 1 October, three months after the last trading activity, £15,900 was distributed to her as the sole shareholder and the bank account closed. The DS01 was filed on 5 October with the £13 fee, copies went to HMRC and to her as the only shareholder within seven days, the Gazette notice appeared in mid-October, and the company was dissolved in late December. The £15,900 distribution, being under £25,000, is a capital receipt; after the £3,000 exemption and with business asset disposal relief at 18%, the Capital Gains Tax was about £2,300, against the roughly £5,700 of dividend tax that treating it as income would have cost.
Timing the three months
The three-month period of no trading starts from the last activity in the ordinary course of business: the last invoice, the last sale of stock, the last contract performed. Collecting old debts, paying creditors, filing returns and closing accounts are winding-up activities and do not restart the clock. Changing the company's name does. Selling the van the company used does not, provided it was not stock in trade, but selling it to a connected person at an undervalue can attract HMRC's attention on the final return.
A worked example
A contractor's company stopped trading on 30 June 2026 when she took a permanent job. It had £18,000 in the bank, no debts and no employees other than her. The accounting period was shortened to 30 June, final accounts and a CT600 were filed in August and the Corporation Tax of about £2,100 paid, VAT was deregistered with a final return in July, the PAYE scheme was closed with a final submission and her P45, and HMRC was told the company had ceased. On 1 October, three months after the last trading activity, £15,900 was distributed to her as the sole shareholder and the bank account closed. The DS01 was filed on 5 October with the £13 fee, copies went to HMRC and to her as the only shareholder within seven days, the Gazette notice appeared in mid-October, and the company was dissolved in late December. The £15,900 distribution, being under £25,000, is a capital receipt; after the £3,000 exemption and with business asset disposal relief at 18%, the Capital Gains Tax was about £2,300, against the roughly £5,700 of dividend tax that treating it as income would have cost.
Timing the three months
The three-month period of no trading starts from the last activity in the ordinary course of business: the last invoice, the last sale of stock, the last contract performed. Collecting old debts, paying creditors, filing returns and closing accounts are winding-up activities and do not restart the clock. Changing the company's name does. Selling the van the company used does not, provided it was not stock in trade, but selling it to a connected person at an undervalue can attract HMRC's attention on the final return.