Navigating Company Closure: Do You Need to File Accounts When Striking Off?
If you’re a business owner contemplating the closure of your company, particularly if you find yourself in a situation like managing a small, unprofitable venture, you may be pondering the best way to dissolve it. This was the case for a small Amazon arbitrage business owner who launched their company in 2023 but decided to abandon it by the end of last year. With an email from Companies House indicating that their filing is due in just two weeks, the dilemma of whether to file accounts or pursue a striking-off has arisen.
Understanding Company Striking Off
Striking off is a legal process that allows you to remove your company from the Companies Register without the need for extensive filing, but it’s essential to understand the implications. The benefit of striking your company off is that you can sidestep the burdensome requirements of preparing annual accounts, which might be particularly appealing for those with little to no income and no future plans for the business.
Filing Requirements Before Striking Off
In general, the Companies Act mandates that all directors ensure their company fulfills its obligations before submission for striking off. This includes making sure that:
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All debts are settled: Before initiating the striking-off process, ensure that any outstanding liabilities are cleared. This applies to creditors, loans, and HMRC.
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Tax affairs are in order: You should ensure that your tax returns are submitted and up to date. If applicable, you may need to inform HMRC about your intention to close the business.
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No ongoing business activities: Your company must not be trading or carrying out any business activities when you opt for the striking-off procedure.
If your company meets these conditions, then you won’t necessarily need to file annual accounts prior to the striking-off application. It’s advisable, however, to keep not just the company’s records but also a communication trail regarding your cessation of business for your records and peace of mind.
The Process of Striking Off
Once you’ve confirmed that your company meets all necessary criteria, you’ll fill out the appropriate form (usually Form DS01 for companies in the UK) and submit it to Companies House, alongside the required fee. Following this application, there will be a waiting period during which Companies House will notify your company and its creditors about the proposed strike-off.
If no objections are raised, Companies House will ultimately dissolve your company, relieving you of further
