If you have stopped trading and want to close a limited company cleanly, voluntary strike-off is usually the fastest and cheapest route. It suits solvent companies with simple affairs, but the eligibility rules are strict and the sequence matters. Get the order wrong and you risk a rejected application. Misstate the company’s position and you commit a criminal offence. You could even hand assets to the Crown that you never meant to give up.
This guide walks through who qualifies and what you must do with HMRC before you apply. It also covers how the DS01 form and fee work, and when strike-off is the wrong tool entirely.
Who Can Close a Limited Company Using Strike-Off
Voluntary strike-off, sometimes called dissolution, is available under section 1003 of the Companies Act 2006. It lets directors apply to remove a company from the Companies House register. The company must first have stopped operating and settled its affairs.
To close a limited company this way, the company must meet three conditions. It must not be insolvent. It must not be the subject, or proposed subject, of insolvency proceedings such as liquidation. And it must not have entered a section 895 arrangement with creditors. Strike-off is not an alternative to formal insolvency. If the company cannot pay its debts, this route is not open to you. A separate process applies, which this article does not cover.
A majority of the company’s directors must sign the application itself, form DS01. With two directors, both must sign. With a single director, that director signs alone. Any director can submit the application, but you need that majority agreement before you do.
The Three-Month No-Trading Rule Explained
One of the trickiest parts of closing a limited company is the three-month look-back rule. You cannot apply for strike-off if, in the three months before the application, the company has:
- traded or carried on business
- changed its name
- made a disposal for value of property or rights it held for the purpose of disposal for gain in the normal course of trading
GOV.UK’s example is useful here. A company that sold apples could not keep selling apples during this window. It could, however, sell the truck it once used to deliver them. The distinction is between ordinary trading activity and the practical steps of shutting down.
During those three months, the company must limit its activity to what is necessary. That means applying for strike-off, concluding the company’s affairs such as settling trading debts, or complying with statutory requirements like filing a confirmation statement. Paying off a supplier, collecting a last invoice, or filing final paperwork all count as concluding affairs. Taking on a new client or renewing a contract does not, and it resets the clock.
How to Close a Limited Company: The HMRC Sequence
Before you touch the DS01 form, close out every HMRC obligation in full. Directors who skip this step often find refunds lost or penalties waiting after dissolution. By then it is too late to fix.
The practical order most accountants recommend when you close a limited company is:
- Hold a board decision confirming the company has stopped trading and directors intend to apply for strike-off.
- Close PAYE if you have employees or ran payroll for yourself. Submit a final Full Payment Submission or Employer Payment Summary and tick the scheme ceased box. Then issue P45s to any remaining employees.
- Cancel your VAT registration within 30 days of stopping being eligible to be registered. Then submit a final VAT return covering the period up to deregistration.
- Prepare final accounts and a final Company Tax Return, marked as final, and pay any Corporation Tax owed. Useful to know: you file final accounts only with HMRC alongside the Company Tax Return, not with Companies House.
- Claim any HMRC refunds before you apply. This is not optional admin. HMRC cannot pay refunds to a dissolved company, and once strike-off completes, any money owed to you passes to the Crown instead.
If your bookkeeping has fallen behind during the wind-down, review your last set of management figures properly before filing. It is worth the hour it takes. Our guide to reading a profit and loss statement is a useful refresher before you sign off final accounts. You may also need to file a personal return for the final trading year. If this is new territory, our piece on filing your first Self Assessment covers the basics.
Dealing With Assets Before You Apply
Any assets left in the company when it dissolves pass to the Crown under the bona vacantia rules. That includes bank balances, unclaimed HMRC refunds, and future payments the company might otherwise have received. The bank freezes the company’s account from the date of dissolution. You cannot tidy this up afterwards.
Before submitting your DS01, you should:
- close the company bank account once all payments have cleared
- transfer or cancel domain names, software licences and subscriptions held in the company’s name
- distribute remaining cash and assets to shareholders
- settle outstanding trading debts, since this counts as concluding the company’s affairs within the three-month rule
On distributions, there is a useful threshold to know. When you close a limited company through strike-off, distributions to shareholders of up to £25,000 in total can be treated as capital. This comes from section 1030A of the Corporation Tax Act 2010, the rule that replaced Extra-Statutory Concession C16. Capital treatment is often more tax-efficient than an income distribution. Above £25,000, you generally need a Members’ Voluntary Liquidation to secure capital treatment on the full amount. We cover this briefly below.
One condition catches founders who plan to start again. Capital treatment can be withdrawn and the distribution reclassified as income if, within two years of receiving it, you become involved in a similar trade or activity. This anti-avoidance rule targets phoenixing, where someone closes one company and immediately reopens the same business inside a new one. If another venture is on your horizon, take advice before you distribute.
The DS01 Application and Gazette Notice
Once you have closed out HMRC matters and dealt with assets, you can submit the DS01. Applying online through Companies House costs £13; a paper DS01 costs £18. Both figures come from the Companies House fee schedule, updated in February 2026. Check the current fee before you apply, as Companies House reviews its fees periodically. The online route is quicker and cheaper for most directors.
After Companies House accepts the application, it publishes a notice in The Gazette, the UK’s official public record. This starts a two-month objection window. Creditors, HMRC, shareholders, or anyone with an interest in the company can object during this window. They can object if they believe the strike-off is premature or improper. Unpaid debts or continued trading are common examples.
If nobody objects within that two months, Companies House strikes the company off the register. A second Gazette notice then confirms it no longer legally exists. At that point you have successfully closed the company through the voluntary route.
The stakes here are worth stating plainly. Making a dishonest strike-off application is an offence under section 1006 of the Companies Act 2006. Penalties include a fine and possible prosecution. Directors’ and members’ liability does not end at dissolution either. Creditors or others can apply to restore a company to the register later if something was missed or misrepresented. Cutting corners rarely pays off.
When Strike-Off Is the Wrong Way to Close a Limited Company
Strike-off is designed for simple, solvent endings. It is the wrong route if any of the following apply:
- the company is insolvent, meaning it cannot pay its debts as they fall due. A separate insolvency process is required in this case
- the company is already subject to, or the proposed subject of, liquidation or a creditor arrangement
- you want to distribute more than £25,000 in assets to shareholders with capital gains treatment
- there are complex assets, pending litigation, or contested liabilities that need formal resolution
For solvent companies with larger reserves, a Members’ Voluntary Liquidation is the usual path rather than strike-off. These are typically companies retiring from trade with significant retained profit. An MVL involves appointing a licensed insolvency practitioner. The practitioner formally winds up the company and distributes assets with capital treatment, regardless of amount. It costs more than a DS01, since you are paying the practitioner’s fees, but it suits directors stepping away from a business with meaningful value left inside it, particularly those closing a solvent company at retirement.
Choosing the right exit matters as much as executing it well. Getting the eligibility rules wrong can cost more in restoration fees and professional time than doing it properly from the start. That applies whether you misjudge solvency or try to push a large distribution through strike-off.
Keeping the Final Steps Simple
Most directors who close a limited company successfully through strike-off do three things well. They stop all trading activity cleanly. They settle every HMRC obligation before applying, not after. And they do not rush the DS01 before dealing with assets. The process itself, from board decision to final Gazette notice, typically takes a little over two months once Companies House accepts the application. That assumes no objections arrive.
Some companies simply run their course, and closing one well is not failure. It is the tidy end of one chapter before the next. If yours has no debts, no disputes and modest reserves, strike-off remains one of the most straightforward ways to close a limited company in the UK. Keep the paperwork, keep the timeline honest, and the Crown never needs to see a penny that was rightfully yours.
If you are winding down one venture while planning your next move, our guide to validating a new business idea is worth reading before you start again. If your next chapter takes a different shape, our comparison of sole trader versus limited company will help you choose the right structure, and our roundup of grants for women in business is a good place to look for early funding.
