Voluntary Strike-off: How to Strike Off a Company and What to Clear First

A voluntary strike-off is when the directors apply to Companies House to remove their company from the register, on form DS01, for £13 online or £18 on paper. To strike off a limited company this way, it must not have traded, changed its name, or sold stock in the three months before application. Companies House dissolves it no sooner than two months after publishing a notice in The Gazette.

Applying for a voluntary strike-off only takes a few minutes. Whether the company stays closed depends on what is still inside it when you apply. Dissolution won’t write off either the company’s unpaid debts or an overdrawn director’s loan account, and money above £25,000 is usually better distributed through a Members’ Voluntary Liquidation. Where the company owes more than it can pay, a Creditors’ Voluntary Liquidation is the route that deals with the debt.

Why would a company apply for a voluntary strike-off?

Directors apply for a voluntary strike-off because the company has no further use. GOV.UK’s guidance gives three examples: 

1. Directors retiring with nobody to take over.
2. A subsidiary whose name is no longer needed.
3. A company set up for an idea that didn’t work out. 

A company kept dormant only to hold its name is a fourth common case. A voluntary strike-off suits all of them when the company owes nothing, and none of them when it does have debts.

Who can apply for a voluntary strike-off?

You can apply for a voluntary strike-off if, in the three months before the application, the company has not traded, changed its name, or sold property it held for sale in the normal course of business. Section 1004 of the Companies Act 2006 sets those conditions, and making an application in breach of them is a criminal offence.

Winding the company down does not count as trading. Section 1004(2) says that paying a debt run up while trading is not trading, so you can settle suppliers and HMRC during the three month window. Selling off equipment is allowed as well. For example, a company selling computers cannot continue selling computers, but it can sell the truck used to deliver them. It can also sell the computer it used to manage orders. What matters is why the company held these items.

Section 1005 adds a second set of conditions. The company cannot apply while any of these is in progress:

• A liquidation, or a winding-up petition that has not been dealt with.
• Administration, or an application or notice to appoint an administrator.
• A proposed or ongoing company voluntary arrangement.
• A receiver or manager appointed over company property

Solvency is not on either list. A company with debts can still apply for a voluntary strike-off, but section 1006 then requires you to send a copy to every creditor within seven days, and any of them can object. GOV.UK’s guidance is that a voluntary strike-off is not an alternative to formal insolvency proceedings, and that you must withdraw your application if the company becomes insolvent. 

Can I strike off a dormant company?

A dormant company is usually the simplest case for a voluntary strike-off. It has no recent trading to account for, and often no creditors to notify. The same rules apply as for any other company: a majority of the directors sign the application, and the shareholders and any creditors receive a copy within seven days.

It’s important to check that ‘dormant’ really means debt-free before you apply. An unpaid accountant’s invoice, a loan from a director, a supplier on a rolling contract or a landlord holding a deposit all make someone a creditor. If the company never traded, Companies House’s guidance is to tell HMRC, once you have applied, that it never traded and will soon be struck off.

Can I just walk away from my limited company?

Not if the company owes money. A voluntary strike-off does not write off the company’s debts, and section 1003(6) keeps any liability of the directors and shareholders alive after dissolution, enforceable as if the company still existed. The same subsection preserves the court’s power to wind up a struck-off company, so a creditor can still put it into compulsory liquidation.

The duty to notify reaches further than most directors expect. Section 1011 says a creditor includes a contingent or prospective creditor, and GOV.UK’s list includes guarantors, landlords holding a refundable deposit, personal injury claimants, and HMRC. Missing one is an offence. Leaving one out to conceal the application is an aggravated offence, with a maximum of seven years’ imprisonment and possible disqualification as a director for up to 15 years.

What happens to an overdrawn director’s loan account?

An overdrawn director’s loan account is money you owe the company, and dissolution does not cancel it. A creditor can apply to the court to restore the company for up to six years after dissolution, and once it is restored the company, or a liquidator appointed to it, can collect the balance from you. Our guide to overdrawn director’s loan accounts explains how that exposure builds up.

What if the company has a Bounce Back Loan?

A Bounce Back Loan does not end with the company either. The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 gave the Insolvency Service power to investigate and disqualify the directors of a dissolved company without restoring it first. Striking off a company with a Bounce Back Loan covers what the lender and the Insolvency Service can do.

Unpaid debts can also cost you the tax treatment on money you took out before applying.

If the company cannot pay what it owes, a creditors’ voluntary liquidation deals with it. A licensed insolvency practitioner takes control, creditors claim in the liquidation, and the company closes with its debts dealt with in the statutory order. Where HMRC is the main creditor, closing a limited company with debts to HMRC sets out the options.

If your company owes money and you are thinking about a voluntary strike-off, talk to us before you file the DS01. Call us or request a callback.

How much money can I take out before striking off?

You can take up to £25,000 out of the company before a voluntary strike-off and have it taxed as a capital gain. Above £25,000, section 1030A of the Corporation Tax Act 2010 stops applying and the whole amount is taxed as income, not just the part above the limit.

The gap between the two is wide. Gains that qualify for Business Asset Disposal Relief are taxed at 18% for disposals from 6 April 2026. The same money taken as a dividend in 2026/27 is taxed at 10.75%, 35.75% or 39.35%, depending on your income tax band, once you have used the £500 dividend allowance.

The £25,000 route comes with a condition that catches companies with debts. Section 1030A only applies if the company has paid, or intends to pay, all its debts at the time of the distribution. If two years pass and it has not, section 1030B treats the distribution as if the relief never applied, and HMRC can assess it as income.

Every distribution made in anticipation of a voluntary strike-off counts towards the £25,000. HMRC can treat a large dividend paid shortly before the application, made to bring the balance under the limit, as one of those distributions, which would take the total over £25,000.

Above £25,000, a Members’ Voluntary Liquidation is usually the better route. There is no minimum balance for an MVL, but the liquidator’s fee means it tends to pay for itself only once the sum is comfortably above the limit.

Do I need to tell HMRC if I strike off my company?

Yes. GOV.UK’s guidance is that before you apply you send HMRC final statutory accounts and a Company Tax Return marked as final, pay all Corporation Tax and other tax owed, tell HMRC the company has stopped employing people, and cancel any VAT registration. You do not file final accounts with Companies House.

HMRC checks strike-off notices against its own records and objects if tax is outstanding. How HMRC’s objections work is covered in our guide to active proposals to strike off. Deal with refunds before you apply as well. A repayment that arrives after dissolution belongs to the Crown, because HMRC cannot pay a company that no longer exists.

How do I apply to strike off a company?

It costs £13 to apply to strike off a company online through the Companies House Apply to strike off and dissolve a company service, or £18 on a paper form DS01. The online service asks for the company number, the authentication code, and an email address for each director who signs. A majority of the directors must sign, which means both of them if there are two.

The Companies House voluntary strike-off procedure has six steps:

1. Pay the company’s debts and file its final accounts and tax return with HMRC.
2. Distribute any cash and assets to the shareholders, close the bank accounts and transfer domain names. Anything left in the company on dissolution passes to the Crown.
3. Submit the voluntary strike-off application and pay the fee.
4. Within seven days, send a copy to every shareholder, creditor, employee and pension trustee, and to any director who did not sign.
5. Companies House checks the application and publishes a notice in The Gazette. The company’s record then shows “Active – Proposal to strike off”, and our guide to what that status means explains what happens during the notice period.
6. If nobody objects, Companies House strikes the company off at least two months after the notice and publishes a second notice, which dissolves it.

Once the application is in, the company cannot trade. Under section 1009, trading, a change of name, a proposed voluntary arrangement or a winding-up petition before dissolution all make withdrawal compulsory, and a director who fails to withdraw commits an offence. If you change your mind for any other reason, one director can withdraw the application online or on form DS02, as long as the company is still on the register.

The duty to notify continues while the application is live. Section 1007 requires a copy to go to anyone who becomes a creditor, employee or shareholder before the company is dissolved.

How long does it take to strike off a company?

A voluntary strike-off usually takes around three months from application to dissolution. Most of that is the two-month minimum in section 1003(3) between the Gazette notice and the strike-off date. The rest is the time Companies House takes to check the application before it publishes the notice.

An objection pauses it. Creditors must deliver an objection at least two weeks before the strike-off date, and Companies House then suspends the voluntary strike-off while the objector pursues what it is owed.

Is a voluntary strike-off the right way to close my company?

A voluntary strike-off is the right route for a company that has stopped trading, can pay everything it owes and has £25,000 or less to distribute. GOV.UK describes it as usually the cheapest way to close a solvent company. With more than £25,000 left, an MVL usually leaves shareholders better off after tax. A company that cannot pay its debts needs a CVL.

A company with no money and no debts can be struck off for the £13 fee. A company with no money and unpaid creditors still needs a CVL, and the directors often fund the fee personally; our guide to CVL costs explains who pays when the company has nothing left. For the routes side by side, see dissolving versus liquidating a company.

Speak to a Licensed Insolvency Practitioner

Before you apply for a voluntary strike-off, we can check whether it is open to your company and what has to be cleared first, or whether a liquidation would leave you in a better position. Inquesta is led by Steven Wiseglass, a licensed insolvency practitioner regulated by the Insolvency Practitioners Association and a member of R3’s North West Regional Committee, with over 20 years’ experience advising directors.

Initial consultations are free and confidential. Call us or request a callback. You can also email [email protected].