How do you strike off a company? When is it tax efficient to strike off a company? What is the difference between striking off and liquidation?

This is a freeview 'At a glance' guide to striking off a company.

Subscribers see Striking off a company: Step-by-step

At a glance

  • Striking off is an alternative procedure to a formal liquidation, conducted under the Companies Act.
  • A company may be struck off the companies register by the Registrar of Companies if it is not carrying on any business or operation.
  • A company may also voluntarily apply to be struck off the register.
  • In order to apply for voluntary striking off, the company must be solvent. The directors can be held to be personally accountable if the company is struck off without settling all its debts.
  • Once struck off a company can be Restored to the Companies Register within certain time limits.
  • If a company is struck off when its share capital or non-distributable reserves or any other assets have not been distributed to shareholders, that undistributed property will become the property of the Crown, by virtue of Bona Vacantia.
  • From 1 March 2012, the maximum amount of a company's assets that can distributed as capital on striking off is capped at £25,000. If there are higher assets and capital treatment is desired for tax then formal liquidation is necessary. 
  • The Targeted Anti-Abuse Rule (TAAR), introduced from 6 April 2016 in order to combat 'phoenixing' (the practice of closing one company and starting a new one immediately), only applies to distributions made on winding up (liquidation). It does not apply on striking off.

Also see our guide Striking off a company: Step-by-step

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