If the Company has no funds to pay for Liquidation the Directors can take steps to apply for the dissolution of the Company. This means an application is made to strike the company off for a fee of only £10.
The following criteria must apply for a striking off:
• The Company must have ceased to trade for at least three months.
• The Company must not have changed its name within the last three months.
• The Company should not be subject to any legal proceedings.
• There should be no remaining assets.
• A majority of the board of Directors must sign the striking off application.
The application to strike off is made to the registrar of companies by completing and filing form DS01. You can obtain form DS01 from Companies House.
A copy of the application must be sent to all known creditors, shareholders, employees and any Manager or Trustee of a Pension Fund giving them the opportunity to object to the request.
If there are no objections Companies House will dissolve the Company within two months. The most common party to object is H M Revenue and Customs due to outstanding tax returns.
Directors should take great care and follow correct procedures when dissolving a Company by using form DS01. The penalties for offences committed when applying for dissolution include fines, disqualification and, in extreme cases, up to seven years imprisonment.