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ToggleUnderstanding the DS01 form for company strike-off
Considering your company’s financial situation, you can shut it down by applying for striking off through the submission of a DS01 form. The majority of directors need to agree on the company’s striking-off. Once the DS01 application is submitted, it is publicised in the Gazette, making it known to any creditors. If there are outstanding creditors, anticipate objections to the form, leading to the suspension of your striking-off application.
Submitting a DS01 form to apply for limited company strike-off
If you’re considering closing your limited company, the approach varies depending on your business’s financial situation. The options differ for a solvent company compared to one struggling to meet its creditor obligations.
For an insolvent company, the recommended method of closure is a formal liquidation process called Creditors’ Voluntary Liquidation (CVL). Despite claims that applying to dissolve or strike off the company is a quicker and cheaper option for the same outcome, this is not entirely accurate. While striking off at Companies House suits some, it may not be the optimal method for achieving closure for others.
What is a DS01 application for a company strike-off?
To apply for the dissolution of your limited company, you need to submit a DS01 form. Obtain the application form from Companies House, fill it out manually, and send it by post. Alternatively, you can complete the entire process online through the Companies House website.
What is the process for striking my company off using a DS01?
If applying by post, the completed DS01 form must be signed by a majority of directors and sent to Companies House along with a cheque for the applicable fee, currently £8. The same fee is applicable for online submissions, with payment made upon form submission. In cases with two directors, both must sign the form for acceptance. Within seven days of sending the DS01 to Companies House, a copy must also be sent to shareholders, creditors, employees, and any directors who did not sign the form.
Once the DS01 application is processed, an official notice outlining your intention to strike off the company will be posted in the Gazette (London, Edinburgh, or Belfast, depending on the company’s incorporation). This notice invites interested parties to inform the Companies House of any reasons why the company should not be struck off. If no objections are received within two months, the company will be removed from the Companies House register. A second notice in the Gazette will confirm the dissolution, and the company will cease to exist as a legal entity.
Why would someone object to my strike-off application?
When your strike-off application is publicised, anyone can raise an objection. However, only objections supported by valid reasons will be considered; if upheld, your application gets suspended. The most common reason for objection is outstanding creditors who have registered a complaint.
This occurs because once a company is dissolved, it ceases to exist, preventing creditors from pursuing outstanding debts. Hence, creditors prefer the company to remain active on the register to continue seeking repayment. If your strike-off application is suspended, you must initiate the process again or contemplate entering a formal liquidation procedure instead.
Is applying to dissolve a company the same as having it liquidated?
Simply put, no. Dissolving a company is an informal method of shutting down an inactive business. A Creditors’ Voluntary Liquidation (CVL), on the other hand, is a formal process used to conclude the affairs of an insolvent company unable to repay its debts. A licensed insolvency practitioner manages the CVL, taking control of the company, communicating with creditors on your behalf, and ensuring a proper closure.
When a company is dissolved via the DS01 form, there’s a chance it could be reinstated on the register if an outstanding creditor petitions for it. If the company is restored in this manner, it reappears on the register along with any pre-dissolution debts.
Strike off and director redundancy
You are probably aware that when closing your company, employees may be eligible to claim redundancy, provided they meet certain criteria. Directors, often considered employees, can also claim redundancy pay if the company becomes insolvent and undergoes liquidation, similar to other staff members.
If the company cannot cover the redundancy payments, including those for directors, an application can be made to the Redundancy Payments Service for government-funded redundancy pay. The funds come from the National Insurance Fund (NIF) to fulfil the owed amounts.
It’s crucial to understand that directors can only claim redundancy pay if the company is closed through a formal liquidation process like a CVL. If dissolved using the DS01 form, directors forfeit their right to claim redundancy and other statutory entitlements.
Moreover, opting for dissolution instead of liquidation means employees, including directors, have to go through a tribunal for their statutory redundancy entitlements, which can be a protracted and stressful process. Therefore, if you, your co-directors, or your staff are likely eligible for redundancy, consider how the chosen method to close the company will impact their ability to claim redundancy pay.
Can I cancel a strike-off application?
There could be various reasons why you want to cancel your submitted strike-off application, either by choice or due to specific circumstances.
You must cancel the strike-off application if your company resumes trading, changes its name, or engages in any other activity not essential for the business closure. Halting the strike-off is also necessary if your company faces formal insolvency proceedings.
Alternatively, you may choose to stop the strike-off voluntarily if you decide to resume trading or if you prefer closing your company through a formal insolvency process.
Regardless of the reason, withdrawing your strike-off application is done using a DS02 form. The quickest and easiest way to cancel the application is online. Note that you must submit the DS02 form before your company is struck off; this method is not suitable for restoring your company to the register once it has already been dissolved. Therefore, prompt action is essential if you have second thoughts about dissolving your company.
Read More:
- What is a first Gazette notice for compulsory strike off?
- Limited Company Strike off Dissolution
- Company strike off has been suspended – what now?
- How to restore a company to the Companies House register
Need further help?
The team of licensed insolvency practitioners and turnaround professionals at Vanguard Insolvency can offer invaluable assistance and guidance in the process of closing down your limited company. We can discuss the advantages and disadvantages of each option, providing recommendations tailored to your specific situation. Contact our team to schedule a free, no-obligation consultation today.
I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.