When and Why You Should Strike Off Your Company

Deciding to strike off a company is usually a practical decision rather than a dramatic one. The business has run its course, the owner has taken a job, a project company has finished its work, or a company was set up and never used. Voluntary strike off is the simplest and cheapest way to close a solvent company that has no further use. But it is not right in every case, and getting the timing wrong can leave directors exposed. This guide explains when to strike off a company, why owners choose it, when it is not allowed, and what to sort out first.

What does it mean to strike off a company?

When you strike off a company, its name is removed from the Companies House register and the company is dissolved. It stops existing as a legal entity. Directors apply using form DS01, Companies House publishes a notice in The Gazette, and if nobody objects, the company is struck off and dissolved about two months later.

Voluntary strike off is different from liquidation. There is no liquidator, no formal investigation and no insolvency process. It is designed for companies that have finished trading and have settled their affairs. For the step-by-step mechanics, see our guide to the company strike off process.

Common reasons to strike off a company

The business has stopped trading

The most common reason. The owner retires, moves on, or decides the business is no longer worth running. Once debts are paid and assets dealt with, striking off removes the ongoing filing obligations.

The company was never used

Many companies are formed for an idea that never takes off. Even a company that has never traded must file accounts and a confirmation statement every year, and pay the confirmation statement fee. Striking it off ends those costs.

A one-off project has finished

Some companies are set up for a single contract or development. When it is complete and the profits are distributed, the company has no further purpose.

Restructuring a group

Groups sometimes simplify by closing dormant subsidiaries that no longer serve a purpose.

Moving to a different business structure

An owner may decide to trade as a sole trader again, or to move the business into a different company, and close the old one once it is empty.

Why owners choose strike off over liquidation

• Cost: the Companies House fee is £13 online, compared with several thousand pounds for a members' voluntary liquidation.
• Speed: the process usually takes around three months from application to dissolution.
• Simplicity: no liquidator is appointed and the directors stay in control of winding things up.

The trade-off is that strike off gives less certainty than a formal liquidation, and it does not suit companies with significant assets to distribute or with any debts it cannot pay.

Can you strike off a company? The eligibility rules

You can only apply to strike off a company if, in the last three months, it has not:

• traded or otherwise carried on business
• changed its name
• disposed of property or rights for value, other than those it needed for normal trading
• engaged in any other activity, except what is needed to close the company, settle its affairs or meet a legal requirement

It also must not be the subject of, or proposing, an insolvency procedure such as liquidation, administration or a company voluntary arrangement, or a scheme of arrangement.

In practice, that means you stop trading, wait at least three months, and use that time to collect money owed, pay bills and close accounts.

When you should not strike off a company

The company owes money it cannot pay

If the company is insolvent, strike off is not the right route. Creditors, including HMRC, can object, and directors who try to use strike off to walk away from debts risk being investigated and disqualified. A creditors' voluntary liquidation is usually the proper process.

There are significant assets to distribute

If the company holds substantial cash or property after paying its debts, a members' voluntary liquidation may be more tax-efficient. On strike off, distributions are only treated as capital if the total is £25,000 or less; above that, the whole distribution is taxed as a dividend. A liquidation allows larger amounts to be treated as capital, possibly with Business Asset Disposal Relief.

You might want the company again

Restoring a struck-off company is possible but takes time and money. If you may restart the business, a company can be kept dormant instead, with simpler accounts and lower running costs. Our guide to dormant accounts explains what a dormant company still has to file.

There are disputes or claims

If anyone may bring a claim against the company, or the company has a claim against someone else, deal with it first. Once dissolved, the company cannot sue or be sued without being restored.

Tax on the money you take out

How you take the last of the money out matters. When you strike off a company, distributions made in anticipation of the strike off can be treated as capital rather than income, as long as the total is £25,000 or less. Capital treatment usually means Capital Gains Tax, with the annual exempt amount available and lower rates than dividend tax for many people. Where Business Asset Disposal Relief applies, the rate is 18% for disposals from 6 April 2026.

If the total goes over £25,000, the whole amount is taxed as a dividend, not just the excess. A targeted anti-avoidance rule can also treat a distribution as income if you carry on a similar trade or activity within two years of the company closing. Take advice before the final distribution, especially if the figures are close to £25,000.

Strike off or keep it dormant?

If you are not sure whether you will need the company again, compare the two options:

• Strike off: one £13 fee, no more filings once dissolved, but restoring the company later is slow and costly.
• Keep it dormant: no trading, but you still file dormant accounts and a confirmation statement every year, pay the £50 confirmation statement fee, and the directors must still verify their identity and keep the registered office compliant.

Keeping a company dormant also keeps the company name reserved, which matters if the name is valuable. If there is no realistic chance of using the company again, strike off is usually the cleaner choice.

What to sort out before you strike off a company

1. Stop trading and tell customers and suppliers.
2. Collect money owed to the company.
3. Pay every creditor, including HMRC, suppliers, landlords and lenders.
4. Deal with employees: final pay, P45s and any redundancy obligations.
5. Close PAYE and deregister for VAT if registered.
6. File final accounts and a final Company Tax Return, and pay any Corporation Tax.
7. Distribute remaining money to shareholders, keeping the tax rules in mind.
8. Close the bank account, leaving enough to pay the strike off fee if needed.

Anything still owned by the company when it is dissolved passes to the Crown as ownerless property, so do not leave cash or assets in the company.

Who must agree?

The application must be signed by the director, or by a majority of the directors if there are more than two. Shareholders should be consulted too: they receive a copy of the application and can object. If the company has employees, creditors or pension trustees, they must also be sent copies within seven days of the application.

What if someone objects?

Creditors, HMRC, shareholders or other interested parties can object during the Gazette notice period. A valid objection, such as an unpaid debt or an outstanding tax return, will suspend the strike off until it is resolved. Companies House may also suspend the process if the company has overdue filings. Settle everything before you apply to avoid delays.

Can a struck-off company come back?

Yes, in some cases. A former director or shareholder can usually apply for administrative restoration within six years if the company was struck off by Companies House, and court restoration is available in other situations, including after a voluntary strike off. Both take time and cost money, so treat strike off as final when you make the decision.

Strike off a company: key points

• Strike off is the simplest way to close a solvent company with no further use.
• The company must not have traded or changed its name in the last three months.
• It is not suitable for insolvent companies or those with significant assets to distribute.
• Pay debts, file final returns and empty the company before applying.
• Assets left in the company pass to the Crown.
• Final distributions of £25,000 or less can be treated as capital.

Companies House guidance is on GOV.UK: strike off your limited company.

Close your company properly

We help directors decide whether to strike off a company or use another route, prepare the final accounts and tax return, and file the DS01 once everything is settled. See our company strike off service.