How to Close a UK Limited Company: Dissolution & Strike-Off Guide 2026

Closing a UK limited company involves more than simply stopping trading. You need to settle all liabilities, file final tax returns, distribute remaining assets, and formally apply to have the company removed from the Companies House register. This guide explains the two main routes — voluntary strike-off and Members' Voluntary Liquidation — so you can choose the right option for your situation.

Two Ways to Close a UK Company

There is no single dissolution process — the right approach depends on whether your company is solvent and the size of its remaining assets:

Method	Best for	Cost	Timeline
Voluntary Strike-Off (DS01)	Solvent, no/minimal assets, simple situation	£8	3–4 months
Members' Voluntary Liquidation (MVL)	Solvent, significant retained profits or assets	£1,000–£3,000+	6–12 months
Creditors' Voluntary Liquidation (CVL)	Insolvent — cannot pay debts	£3,000–£6,000+	12–24 months

Most non-resident founders of small UK companies will use voluntary strike-off. MVL becomes worthwhile when there are retained profits above approximately £25,000, because the liquidation process allows shareholders to receive distributions as capital gains rather than dividends — often resulting in significant tax savings.

Voluntary Strike-Off: Step by Step

Voluntary strike-off is governed by section 1004 of the Companies Act 2006. The process is straightforward but has strict eligibility conditions.

Eligibility Requirements

Before filing the DS01, you must confirm the company:

• Has not traded or carried on business in the previous 3 months
• Has not disposed of any property or rights it held immediately before that 3-month period
• Has not engaged in any activity other than settling liabilities or making distributions to members
• Is not subject to any insolvency proceedings

How to File DS01

1. File the DS01 form online at Companies House (£8 fee) — all directors must sign, or a majority if more than one
2. Within 7 days, send copies of DS01 to all members, employees, creditors, managers or trustees of any employee pension fund, and any manager or trustee of an employee share scheme
3. Companies House publishes a first Gazette notice
4. A 2-month objection period begins — creditors, HMRC or any interested party can object
5. If no valid objections are received, Companies House publishes a second Gazette notice and removes the company from the register

What to Do Before Applying

Filing DS01 before clearing all obligations is the most common mistake. Work through this checklist first:

• File all outstanding tax returns: Corporation tax return (CT600), VAT returns and PAYE returns must be up to date. Contact HMRC to close your PAYE scheme and, if applicable, deregister for VAT before dissolving.
• Pay all outstanding taxes: Corporation tax, VAT, PAYE liabilities must be settled in full.
• Close outstanding invoices: Collect any outstanding receivables and pay all creditors.
• Distribute remaining assets to shareholders: Pay dividends or return share capital as appropriate. Any remaining cash left in the company at dissolution passes to the Crown.
• Close company bank accounts: Once assets are distributed, close all business bank accounts.
• Cancel any contracts: Terminate leases, subscriptions, and business licences.

Members' Voluntary Liquidation (MVL)

MVL is a formal winding-up procedure for solvent companies. Directors must sign a Declaration of Solvency confirming the company can pay all its debts within 12 months. A licensed insolvency practitioner (IP) is then appointed as liquidator to:

• Realise company assets
• Pay all creditors in full
• Distribute the surplus to shareholders
• File the final returns with HMRC and Companies House

The tax advantage of MVL is that distributions to shareholders are treated as capital distributions rather than dividends. If you qualify for Business Asset Disposal Relief (BADR), the effective rate on qualifying gains up to £1m lifetime limit is 18% (from April 2025) rather than the higher dividend tax rates. For companies with substantial retained profits this can represent significant savings — typically MVL becomes worthwhile from around £25,000–£40,000 of distributable reserves, depending on your personal tax position.

Dormant vs Dissolved: The Difference

A dormant company still legally exists on the Companies House register — it has simply stopped trading. You must still:

• File annual confirmation statements (£34/year online)
• File dormant company accounts with Companies House
• Notify HMRC of dormant status

Dormancy is useful if you plan to reuse the company name or reactivate trading later. Dissolution permanently removes the company. The two are not the same and dormancy does not lead automatically to dissolution.

Restoring a Dissolved Company

If a company was struck off by Companies House (e.g. for failure to file) or voluntarily dissolved, it can be restored to the register:

• Administrative restoration: Must apply within 6 years of dissolution. Former directors or members can apply to Companies House directly (form RT01, fee £468). Available only where the company was struck off by Companies House — not for voluntarily dissolved companies.
• Court order restoration: Available for voluntarily dissolved companies, or where the 6-year administrative window has passed. Requires a court application — legal costs typically £1,500–£3,000+.

Restoration also requires all outstanding filing obligations and fees to be settled before the company is restored.

Further reading: How to Dissolve a UK Limited Company.

Frequently Asked Questions