Striking Off a Limited Company — How to Close a Trade Company the Right Way (2026)

What Is a Voluntary Strike-Off?

A voluntary strike-off means applying to Companies House — using form DS01 — to have your company removed from the register. Once it's struck off, the company legally ceases to exist. It stops being a company you have to file accounts and confirmation statements for, and it stops being something HMRC expects a Company Tax Return from.

Strike-off is designed for closing a solvent company — one that can pay its bills — that has stopped trading and has little or no assets or cash left in it. It is the route most small trade companies use because it is fast and inexpensive. The online application currently costs £33 (£44 by paper). It is not a way to escape debts: a company that cannot pay what it owes should not be struck off, and that situation points to liquidation instead, which we cover below.

Are You Eligible to Strike Off?

You can only apply for a voluntary strike-off if your company meets a strict set of conditions. In the last 3 months, the company must not have:

• Traded or otherwise carried on business
• Sold off any stock it would normally trade in (for example, selling vehicles, tools or materials as part of a trade)
• Changed its name
• Done anything else other than what is necessary to close the company down (settling accounts, paying off creditors, distributing assets to shareholders, etc.)

On top of that, the company must not be threatened with liquidation and must have no agreements with creditors in place — for example, a Company Voluntary Arrangement (CVA). If any of these apply, strike-off is not the right route and your application can be rejected or, later, reversed.

Note that paying employees their final wages, settling outstanding invoices, or selling fixed assets like a single van as part of winding the business up does not count as "trading" for this purpose — those are part of closing down. The line is whether you're still running the business or genuinely shutting it.

The Steps to Close a Trade Company by Strike-Off

Striking off the company is the last administrative step, not the first. Before you file the DS01 you need to wind the business up properly. Skipping these steps is what causes problems down the line.

1. Stop trading and settle your affairs

Stop taking on work and finish or close out any jobs in progress. The 3-month clock for eligibility starts from when the company genuinely stops trading, so this is the point everything else hangs off.

2. Deal with employees and close the PAYE scheme

If the company has employees — including yourself if you take a salary through PAYE — you must follow the correct redundancy and final-pay rules, issue P45s, and submit your final payroll reporting to HMRC. Once everyone has been paid and reported, tell HMRC to close the PAYE scheme. Leaving a live PAYE scheme open after closure generates needless filing notices and penalties.

3. Collect debts and pay all creditors — including HMRC

Chase and collect anything customers still owe you. Then pay everyone the company owes: suppliers, subcontractors, the bank, and HMRC. HMRC is a creditor like any other, so make sure VAT, PAYE, and Corporation Tax are all settled. A company should only be struck off once it can fully meet what it owes — that is what "solvent" means in practice.

4. Distribute remaining assets to shareholders BEFORE strike-off

This is the step owners most often miss, and it is expensive to get wrong. Any money or assets left in the company at the moment it is struck off pass to the Crown under a rule called bona vacantia — ownerless goods. That includes cash sitting in the company bank account. So you must distribute any remaining reserves to the shareholders before the company is removed from the register, not after. Once it's gone, getting that money back is difficult and costly.

5. Deal with the company bank account

Close the company bank account once everything has been paid in and out and the final reserves have been distributed. Don't leave a balance in it — see the bona vacantia point above. Banks usually freeze accounts of dissolved companies, so any cash left behind is hard to recover.

6. File final accounts and a final Company Tax Return with HMRC

Prepare and submit a final set of statutory accounts and a final Company Tax Return covering the period up to when trading ceased, and pay any Corporation Tax due. Tell HMRC the company has stopped trading and is being struck off. You generally do not need to file these final accounts with Companies House if you're striking off, but you do need to settle everything with HMRC.

7. File form DS01 with Companies House

Once the business is wound up and the reserves distributed, apply to strike the company off using form DS01. It can be filed online or on paper, and a majority of the company's directors must sign it.

Notifying Interested Parties — the 7-Day Rule

You can't just quietly remove the company. Within 7 days of sending the DS01 to Companies House, you must send a copy of the application to anyone who could be affected, including:

• Members (shareholders)
• Creditors
• Employees
• Directors who didn't sign the form
• Pension managers or trustees, and anyone else with an interest

Companies House then publishes a notice of the proposed strike-off in the relevant Gazette (London, Edinburgh, or Belfast). If nobody objects, the company is struck off the register roughly 2 months after that notice. A second notice confirming the dissolution is then published. The whole process, from filing to dissolution, typically takes around three months.

The Tax Angle — Extracting Your Final Reserves

How you take the last of the money out of the company matters, because the tax treatment can differ a lot depending on how much is left.

Where the reserves are small, you can usually take the final balance out as a distribution on winding up, which is treated as a capital gain rather than income — often more favourable than a dividend, and your annual Capital Gains allowance may cover part of it.

However, there is an anti-avoidance rule to be aware of. If the distribution made on a strike-off exceeds £25,000, the whole amount is treated as a dividend (taxed as income) rather than as capital. That £25,000 figure is a threshold for the total distribution, not a tax-free band — go a pound over and the capital treatment is lost on the lot.

Where the reserves are larger, a formal Members' Voluntary Liquidation (MVL) is often more tax-efficient than a strike-off. An MVL is a solvent liquidation handled by an insolvency practitioner; the distributions are treated as capital, and you may qualify for Business Asset Disposal Relief (the relief formerly known as Entrepreneurs' Relief), which can reduce the Capital Gains Tax rate on qualifying gains. An MVL costs more to run than a DS01 strike-off, so the higher the reserves, the more likely the tax saving outweighs the cost. This is exactly the kind of decision where an accountant earns their fee — get advice before you choose your route.

Close It or Keep It? Strike-Off vs Making the Company Dormant

Striking off is for closing a company you no longer want. If you think you might use the company again — for a future trade, to protect the name, or because you're only pausing — making it dormant instead may be the better call. A dormant company stays on the register but isn't actively trading; you keep filing simplified accounts and a confirmation statement each year, but you keep the company and its name.

The trade-off is simple: a strike-off ends the admin entirely but is permanent, while keeping the company dormant preserves it at the cost of ongoing (minimal) filing. If there's any real chance you'll trade through it again, dormancy usually wins; if you're genuinely done, strike-off is cleaner.

The Risks — When Strike-Off Goes Wrong

A voluntary strike-off is straightforward when the company is solvent and wound up properly. It goes wrong in two main ways:

• Objections and restoration. Creditors, including HMRC, can object to a strike-off application, which suspends it. And even after a company has been dissolved, a creditor can apply to court to have it restored to the register so they can pursue the debt — so striking off doesn't make liabilities disappear.
• Striking off with debts outstanding. If the company can't pay what it owes, strike-off is the wrong route. Attempting to dissolve an insolvent company to avoid debts can expose directors to personal liability and disqualification. The correct route for an insolvent company is a formal liquidation handled by an insolvency practitioner.

The rule of thumb: strike-off is for tidying up a solvent, finished company — not for walking away from one that can't pay its bills.

Quick Reference: Striking Off a Limited Company UK 2026