What does it mean to dissolve a company?

To dissolve a company means to legally close it and to release directors from their responsibilities. The company is recorded as having status ‘dissolved’ on the government database at Companies House which also known as ‘striking off’.

If your company is inactive; or solvent with assets of less than £25,000; or insolvent but with creditors unlikely to object – then dissolution is usually suitable and typically costs a few hundred pounds.

Should your company have debts but little in the way of assets, creditors can expect little or nothing from the proceeds of a liquidation. This lessens the likelihood of creditor objection and so favours dissolution over a liquidation.

Directors attempting to ‘strike off’ their Company when it is struggling need to take the advice of a qualified professional before going down this route.

You man only dissolve your business once all it's taxation and creditor liabilities are dealt with.

What will happen if my Company has debts and it is struck off?

If your company is dissolved via strike off and the Company has debts, you may think that this would be the end of the matter?


Creditors are able to resurrect a company that owes them money and once back up and running, chase for the amounts owed.

Newly passed laws mean that if the company owes significant sums to HM Revenue & Customs, an application can be made to ensure the directors and/or shareholders are held personally liable for some or all of these amounts.

This means that instead of the directors consulting a professional and obtaining correct advice, the company debt is transferred to the director often worsening the situation.

What should I do if I am thinking about closing my Company due to its struggles?

You should contact us as soon as possible; we are able to give advice tailored to your very specific situation. Our advice is free, professional, and friendly. We will always make sure you understand what options are available to you and design a course of action to assist.