There comes a time when you no longer need your company. Assuming it has not been forced upon you because the financials all went wrong, there are a few different routes.

If you have a large cash balance then it is often most tax efficient to get it formally liquidated but take advice before you go that way, as it is not a cheap process.

In some circumstances a company can simply be “struck off” the register without undergoing formal liquidation procedures. A straightforward and inexpensive process  but is only appropriate where the company is solvent, there are no outstanding legal actions, and it hasn’t traded for at least the last three months.

Strike off (aka an informal liquidation) can be initiated by the directors of the company

If all the documents have been filed to strike off the company, Companies House will not usually chase for the financial statements to be filed for the period before strike-off, because there is no longer going to be a company to file these financial statements against.

There may however be a need to supply financial information to HMRC to support final tax returns. HMRC will monitor proposed strike off requests and if they have an open file will object to the strike off and derail your plans.

If a company is pursuing strike off, but this will not be completed prior to the filing deadline for the financial statements, it may be beneficial for the company to extend its previous year end and just prepare one long set of accounts.

If the company has any unpaid creditors, they are likely to object to the strike off and, even if the company has been dissolved, creditors could apply to have the company restored to the register.

When a company is dissolved, any assets that remain are deemed to belong to the Crown, the Duchy of Lancaster or the Duchy of Cornwall (deemed to be “bona vacantia”). If the amounts are small, it is questionable whether any action would be taken to seize these, but Directors should be aware of the risks.

Our advice is always to clear out your balance sheet before the striking off is complete and you may need to take advice on the ways to do this. It is also a good idea to close the bank account. We have seen many people lose their money in bank accounts that became bona vacantia.