Is dissolution the right option for you?
Dissolution
Mrs C Lawson, Cardiff
“I was ready to dissolve until you told me I was entitled to over £6,000 in redundancy and unpaid wages. I’m so glad I checked this site and the money will come in really handy.”
We are rated 9.6 out of 10 on Trustpilot
An insolvency practitioner is not always required to close your company and the process can actually cost as little as £10 if you do it yourself.
If your limited company is solvent and no longer required then provided it has no significant assets (see our Members Voluntary Liquidation page if you company has assets over £25,000) dissolution is the simplest way to close it down.
You can simply close the business bank account and withdraw any funds (make sure this is done before dissolution begins as once the company is struck off any money left in the bank account will be transferred to the Crown) then complete form DS01 and send it to companies house along with the £10 administration fee.
If everything has been completed correctly a strike-off notice will be published in the London Gazette and as long as no creditors object (HMRC will check their VAT; PAYE and corporation tax records) the company will be removed from the official register and cease to exist.
Spongebob Plan
Dissolution is a straight-forward way to wind up a company that is solvent and no longer required however it could actually be used as a way of closing down a company with debt as well. If you own a company that has no significant assets and have no means of funding a Creditors Voluntary Liquidation yourself then the Spongbob Plan, as it is often referred to, has become increasingly popular.
When you apply for dissolution a winding up notice will be published in the London Gazette and in all likelihood your creditors (especially HMRC) will object to the company being struck off because they are still owed money. However once it is made clear that the company has no assets (they can even be informed of your intentions and financial status before dissolution begins) and that a compulsory liquidation would be an expensive and futile exercise objections are often withdrawn and the company can wind up and removed from the register.
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The ‘Spongebob Plan’ is an interesting concept but it also has some significant flaws. It could actually lead to the directors becoming personally liable for the company’s debts or even being banned from setting up another company in the future. Unlike liquidation creditors can ask for the company to be restored at a later date and any dividends taken may have to be repaid. At the Insolvency Helpline we do not endorse the sponge bob plan as legitimate and responsible way to deal with company debt and if you are considering this course of action it is essential you get professional advice.
For many directors it may seem like the only course of action available to them but as you will see below by attempting to dissolve their limited company they could actually be missing out on over £10,000 in redundancy from the government.
Redundancy
Dissolution can be a simple and inexpensive way to close your company but in doing so you could be forfeiting your statutory right to redundancy along with any unpaid salary or holiday pay you are owed.
Most directors are not aware that they could be missing out on thousands of pounds by dissolving their company instead of putting it into liquidation and claiming the money they are entitled to by law. By placing your company into liquidation instead you can submit a claim to the Redundancy Payments Office who will confirm your entitlement and pay your redundancy from the National Insurance Fund. At the Insolvency Helpline we work alongside redundancy experts who can confirm your eligibility (the average claim is around £12,000) and complete all the paperwork on your behalf.
If you have no money to liquidate your company (perhaps you are considering the Spongebob Plan) then this could be a fantastic alternative and leave you will a lump sum after the liquidation fees are paid.
There are many ways to close down a limited company and the process can often seem complicated and confusing. At the Insolvency Helpline we help over 100 directors a month and can guide you through the whole process free of charge.
To find out if dissolution is really the right option, why not try our Free 60 Second Test or call us on 0800 084 2378 for some free advice.
Is dissolution the right option for you?
Try our free 60 second test and find out!
Dissolution
Mrs C Lawson, Cardiff
“I was ready to dissolve until you told me I was entitled to over £6,000 in redundancy and unpaid wages. I’m so glad I checked this site and the money will come in really handy.”
We are rated 9.6 out of 10 on Trustpilot
Free Advice
For Faster free insolvency advice request an Express Callback.
An insolvency practitioner is not always required to close your company and the process can actually cost as little as £10 if you do it yourself.
If your limited company is solvent and no longer required then provided it has no significant assets (see our Members Voluntary Liquidation page if you company has assets over £25,000) dissolution is the simplest way to close it down.
You can simply close the business bank account and withdraw any funds (make sure this is done before dissolution begins as once the company is struck off any money left in the bank account will be transferred to the Crown) then complete form DS01 and send it to companies house along with the £10 administration fee.
If everything has been completed correctly a strike-off notice will be published in the London Gazette and as long as no creditors object (HMRC will check their VAT; PAYE and corporation tax records) the company will be removed from the official register and cease to exist.
Spongebob Plan
Dissolution is a straight-forward way to wind up a company that is solvent and no longer required however it could actually be used as a way of closing down a company with debt as well. If you own a company that has no significant assets and have no means of funding a Creditors Voluntary Liquidation yourself then the Spongbob Plan, as it is often referred to, has become increasingly popular.
When you apply for dissolution a winding up notice will be published in the London Gazette and in all likelihood your creditors (especially HMRC) will object to the company being struck off because they are still owed money. However once it is made clear that the company has no assets (they can even be informed of your intentions and financial status before dissolution begins) and that a compulsory liquidation would be an expensive and futile exercise objections are often withdrawn and the company can wind up and removed from the register.
The ‘Spongebob Plan’ is an interesting concept but it also has some significant flaws. It could actually lead to the directors becoming personally liable for the company’s debts or even being banned from setting up another company in the future. Unlike liquidation creditors can ask for the company to be restored at a later date and any dividends taken may have to be repaid. At the Insolvency Helpline we do not endorse the sponge bob plan as legitimate and responsible way to deal with company debt and if you are considering this course of action it is essential you get professional advice.
For many directors it may seem like the only course of action available to them but as you will see below by attempting to dissolve their limited company they could actually be missing out on over £10,000 in redundancy from the government.
Redundancy
Dissolution can be a simple and inexpensive way to close your company but in doing so you could be forfeiting your statutory right to redundancy along with any unpaid salary or holiday pay you are owed.
Most directors are not aware that they could be missing out on thousands of pounds by dissolving their company instead of putting it into liquidation and claiming the money they are entitled to by law. By placing your company into liquidation instead you can submit a claim to the Redundancy Payments Office who will confirm your entitlement and pay your redundancy from the National Insurance Fund. At the Insolvency Helpline we work alongside redundancy experts who can confirm your eligibility (the average claim is around £12,000) and complete all the paperwork on your behalf.
If you have no money to liquidate your company (perhaps you are considering the Spongebob Plan) then this could be a fantastic alternative and leave you will a lump sum after the liquidation fees are paid.
There are many ways to close down a limited company and the process can often seem complicated and confusing. At the Insolvency Helpline we help over 100 directors a month and can guide you through the whole process free of charge.
To find out if dissolution is really the right option, why not try our Free 60 Second Test or call us on 0800 084 2378 for some free advice.
Is dissolution the right option for you?
Try our free 60 second test and find out!
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