Closing a limited company
To strike off a company, or dissolve a limited company, is the same thing described two ways, and most small companies do it the same way: a £13.00 form, a notice in the Gazette, and about three months. The part that costs people money is not the closing. It is how they take the last of the cash out.
Updated 13 September 2026 · Tax year 2026/27
The two ways to close a company #
The strike off company meaning is simply this: the registrar removes the company from the register at Companies House, and it stops existing. Dissolution is the result, strike off is the process, and in everyday use the two words are interchangeable.
The strike off company meaning is simply this: the registrar removes the company from the register at Companies House, and it stops existing. Dissolution is the result, strike off is the process, and in everyday use the two words are interchangeable.
If the company can pay its debts, there are two routes. Which one you want depends almost entirely on how much money is left in it.
| Strike off (dissolution) | Members voluntary liquidation | |
|---|---|---|
| What it is | Asking Companies House to remove the company from the register | A formal liquidation run by a licensed insolvency practitioner |
| Cost | £13.00 online | Typically several thousand pounds |
| Time | About 3 months | Several months, sometimes longer |
| Cash out treated as | Capital up to £25,000.00, dividend above it | Capital, with no £25,000.00 ceiling |
| Suits | Most small companies | Companies distributing well over £25,000.00 |
If the company cannot pay its debts, neither of these applies and you should be taking insolvency advice rather than reading a guide. Applying to strike off an insolvent company is not a way out of its debts.
How to dissolve a company: the DS01 #
How to strike off a company, in one line: you apply to Companies House on form DS01. That single application is how to dissolve a company uk-wide, and it is the same form whether you are closing a limited company or a ltd company by any other spelling.
Almost everyone should apply to strike off a company online rather than on paper. To strike off a company online, or to dissolve a company online, costs £13.00 against £18.00, the service checks the application as you complete it, and it is processed faster. The paper form can only be paid for by cheque or postal order.
The application must be signed by a majority of the directors. There is no separate close a company form for HMRC: the strike off application goes to Companies House, and HMRC is dealt with by filing the company's final returns.
When you cannot apply #
The company has to have been quiet for 3 months first. Any one of these stops the application:
- It has traded or carried on business in the last 3 months
- It has changed its name in the last 3 months
- It has disposed of property or rights it held for trading purposes
- It has done anything beyond concluding its affairs and meeting statutory duties
- It is in, or threatened with, insolvency proceedings or a liquidation petition
- It has an agreement with creditors, such as a Company Voluntary Arrangement
Settling up is allowed. Collecting a final debt, paying a final bill, closing the bank account and filing the last return are all concluding the company's affairs rather than carrying on business. Taking one more job is not, and it resets the 3 months.
Who you have to tell, and when #
Within 7 days of applying you must send a copy of the application to everyone with an interest in the company:
- Every shareholder
- Every creditor, present or likely, including HMRC, banks, suppliers, landlords and former employees
- Every employee
- Any manager or trustee of an employee pension fund
- Any director who did not sign the application
This continues after you apply. If someone becomes a creditor, member, director or employee before the company is dissolved, they get a copy too. Leaving HMRC off the list is the common omission, and HMRC objects to strike offs where returns or tax are outstanding.
What happens next #
Companies House advertises the application in the Gazette. The notice runs for at least 2 months, giving anyone who objects time to do so. If nobody does, the company is struck off and a second notice confirms the dissolution. Allow around three months in total.
How long does it take to dissolve a company? #
About three months, in the ordinary case where nobody objects.
| Stage | How long |
|---|---|
| Companies House processes the application | Days, online; longer on paper |
| Notice published in the Gazette | Runs at least 2 months |
| Company struck off, second notice published | Shortly after the notice expires |
An objection stops the clock. HMRC is the most common objector, and it objects where returns or tax are outstanding, so filing everything first is what actually keeps the timetable to three months.
What happens when a company is dissolved #
It ceases to exist. That sounds obvious and has consequences people do not expect:
- The company can no longer hold anything, sue, be sued, or trade
- Its bank account is frozen and the balance passes to the Crown as bona vacantia
- Any other remaining asset, including property and intellectual property, passes to the Crown too
- Contracts in the company's name end with it
- Directors' duties end, but not liability for anything done before dissolution
Dissolution is reversible, but not cheaply. Restoring a company to the register is a separate process and costs far more than doing it properly in the first place.
The cheapest way to close a limited company #
The cheapest way to close a limited company is the online strike off, at £13.00. There is no cheaper route, and how much does it cost to dissolve a company has the same answer whatever the company's size.
What varies is the tax. Where more than £25,000.00 is being distributed, the £13.00 route can cost far more in tax than a liquidation costs in fees, which is the subject of the next two sections. Cheapest to file is not always cheapest overall.
Closing a limited company with debts to HMRC #
This is a different situation from everything above, and the honest answer is that strike off is usually not available.
Closing a limited company with no debts is straightforward. Closing a company with debts is not, because a company that cannot pay what it owes is insolvent, and the interests of creditors come ahead of the shareholders' wish to close it.
Where a company is insolvent the route is a creditors voluntary liquidation, run by a licensed insolvency practitioner, not a DS01. If the debt is to HMRC specifically and the company could pay given time, a Time to Pay arrangement may resolve it and leave an ordinary strike off available afterwards. Either way this is the point to take advice rather than file a form.
Closing a company that never traded #
A company that never traded is the easiest case there is. It has met the 3 month condition by definition, has no creditors to notify beyond its shareholders, and has no final Corporation Tax to pay.
Two things still apply. Companies House still needs the DS01 and the £13.00. And HMRC still needs telling, because the company will have been issued a Corporation Tax record on incorporation even if it never used it.
If you are not certain you are finished with it, consider keeping it dormant instead. A company that never traded is already dormant for both Companies House and HMRC purposes, and holding it costs two filings a year.
What to send HMRC before you close #
Closing a company at Companies House does not close it at HMRC. Separately you need to:
- File final statutory accounts and a final Company Tax Return, marked as final
- Pay any Corporation Tax due
- Cancel the VAT registration, using form VAT7
- Close the PAYE scheme and issue final P45s, if you had one
- Clear any overdrawn director's loan account before dissolution, because the company cannot write it off once it no longer exists
How to inform HMRC of company strike off is a question with a slightly awkward answer: there is no single form. You tell HMRC by filing the company's final return and marking it final, and by closing each tax the company was registered for separately. HMRC also receives a copy of the strike off application from you as a creditor.
Closing a company with outstanding directors loan balances is the case worth singling out. If the loan is still overdrawn at dissolution, the balance is effectively written off, and HMRC can treat that as income in the director's hands. Repay it before you apply.
The £25,000 rule, which is the expensive part #
This is the one that catches people, and it is worth understanding before you apply rather than after.
When you take the remaining cash out ahead of a strike off, it is treated as capital — so it is a capital gain, not a dividend — but only if the total distributed is £25,000.00 or less, and only if the company is actually dissolved within 2 years.
Two companies, identical but for a pound, illustrate it:
| Distributes £25,000.00 | Distributes £25,001.00 | |
|---|---|---|
| Treated as | Capital gain | Dividend income |
| Taxed at | Capital Gains Tax rates, possibly 18% with Business Asset Disposal Relief | Dividend rates, up to 39.35% |
| Annual exempt amount | Available | Not available |
Where the amount is comfortably over £25,000.00, a members voluntary liquidation stops being an extravagance and starts paying for itself, because the whole distribution keeps capital treatment.
Entrepreneurs relief on liquidation #
Entrepreneurs relief is now called Business Asset Disposal Relief. The name changed; the idea did not. On a qualifying distribution it charges the gain at a reduced rate instead of the normal Capital Gains Tax rate.
The rate has moved twice in two years, so check which one applies to your disposal date:
| Disposal date | Rate |
|---|---|
| On or before 5 April 2025 | 10% |
| 6 April 2025 to 5 April 2026 | 14% |
| From 6 April 2026 | 18% |
To qualify, for at least 2 years up to the disposal you must have held at least 5% of both the shares and the voting rights, have been an officer or employee of the company, and the company must have been trading rather than investing. There is a lifetime limit of £1,000,000.00 of qualifying gains, in place since 11 March 2020, and anything above it is taxed at the normal rate.
Note the interaction with the rule above. Business Asset Disposal Relief applies to a capital gain. If a strike off distribution breaches £25,000.00 and becomes a dividend, there is no gain for the relief to apply to.
Closing down, or just pausing? #
Why do companies dissolve, when they could simply stop? Usually because the filing obligations do not stop. Why would a company voluntary strike off rather than wait to be struck off by the registrar is a related question with a better answer: a voluntary strike off happens on your timetable, after you have taken the cash out, rather than at a moment of the registrar's choosing with the bank balance still in the company.
Not every company that has stopped trading needs to close. If you might use it again, or you want to hold the name, making it dormant keeps it on the register with far less work than closing and incorporating again later.
That is a genuinely different position with its own filing duties, and it is covered in dormant companies. The short version: a dormant company still files a confirmation statement and accounts every year, but pays no Corporation Tax.
If you are closing because the company is no longer worth the administration, it is worth checking whether the numbers actually say that. The sole trader vs limited company calculator compares both at current rates, and since April 2026 it more often favours the sole trader than it used to.
Common questions #
How do I dissolve a company?
Apply to Companies House to strike it off, using form DS01. It costs £13 online. The company must not have traded, changed its name or disposed of trading property in the 3 months before you apply, and you must send a copy of the application to every shareholder, creditor and employee within 7 days.
How do I close a company?
How do you close a limited company, in the ordinary case: stop trading, wait three months, take the remaining cash out, file the final returns, then apply to Companies House on form DS01. How do I close a ltd company has the same answer; ltd and limited are the same thing.
How to close a limited company UK: what is the process?
Closing a company uk-wide follows one process, because Companies House covers England, Wales, Scotland and Northern Ireland. Apply on form DS01, notify everyone with an interest within seven days, and wait for the Gazette notice to run.
How do you strike off a company at Companies House?
To strike off a limited company you file form DS01. Dissolve a company Companies House side means exactly this application, and strike off a company Companies House processes it and advertises it in the Gazette before removing the company from the register.
Can I dissolve my company myself?
Yes. To dissolve my company, as it is usually searched, needs no accountant or solicitor: the online DS01 is designed to be completed by a director. Advice is worth paying for on the tax treatment of the final distribution, not on the form.
How do I close a limited company that never traded?
The same way, and more easily. A company that never traded already meets the three month condition, has no final Corporation Tax and no creditors beyond its shareholders. File the DS01 and tell HMRC. Keeping it dormant is the alternative if you may use it later.
How much does it cost to close a limited company?
£13 to apply online, or £18 on paper. Companies House cut this from £33 on 1 February 2026, so older guidance quotes a higher figure. A members voluntary liquidation costs far more, usually several thousand pounds in insolvency practitioner fees.
How long does it take to close a company?
Around three months in the ordinary case. Companies House advertises the application in the Gazette and the notice runs for at least 2 months before the company is struck off, on top of the time taken to process the application.
Can I close a company online?
Yes. The online DS01 service is cheaper at £13, is checked as you complete it, and is processed faster than the paper form, which can only be paid for by cheque or postal order.
What happens to money left in the company bank account?
Take it out before dissolution. On dissolution the account is frozen and anything left passes to the Crown as bona vacantia, and you would have to restore the company to the register to get it back.
Do I need to tell HMRC I am closing my company?
Yes. File final accounts and a final Company Tax Return, pay any Corporation Tax due, deregister for VAT and close the PAYE scheme. HMRC is a creditor, and it is entitled to a copy of the strike off application like any other.
Is strike off or liquidation better?
Strike off is far cheaper and suits most small companies. A members voluntary liquidation is worth considering where more than £25,000 is being distributed, because above that limit a strike off distribution is taxed as a dividend rather than as a capital gain.
What is entrepreneurs relief on liquidation?
Entrepreneurs relief liquidation is the old name for what is now Business Asset Disposal Relief, and business asset disposal relief liquidation treatment is the same thing. On a qualifying liquidation it charges the capital gain at 18% rather than the normal Capital Gains Tax rate, up to a lifetime limit of £1,000,000.