Closing a Dormant Company?
Anderson Brookes Insolvency Practitioners help directors close limited companies with debt quickly, legally and with expert guidance every step of the way.
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Closing a Dormant Limited Company - Step-by-Step (UK Guide)
If your limited company is no longer trading, and has no debts, employees, or bank transactions, it may qualify as dormant. But simply leaving it dormant isn’t always safe. Unclosed companies can trigger late filing penalties, be targeted for compulsory strike off, or cause problems if you want to launch new ventures.
This guide explains how to formally close a dormant company, when voluntary strike off is the right option, and how to avoid common pitfalls.
At Anderson Brookes, we support directors with fast, compliant company closures – making sure nothing is missed and that you stay protected from future risk.
What Counts as a Dormant Company?
A company is considered dormant if it has had no significant accounting transactions during a financial year.
According to HMRC and Companies House, this means:
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No trading income or commercial activity
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No wages or PAYE
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No interest or bank movements (apart from Companies House fees)
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No asset purchases, loans, or payments to directors
Dormant companies often remain on the register to preserve a brand name or for planned future use. But if it’s no longer required, closing it the right way avoids future penalties and ensures finality.
Can I Just Let a Dormant Company Sit There?
Technically, yes – but it’s not risk-free.
Even if your company is dormant:
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Confirmation Statements still need filing
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Dormant accounts must be submitted yearly
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Penalties apply if you miss filing deadlines
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Strike off action can be triggered if Companies House suspects inactivity
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Directors may still carry legal responsibility
Closing the company removes all admin and liability — and if it has zero debts or assets, the process can be quick and low-cost.
Strike Off vs Liquidation – What’s Right for a Dormant Company?
| Option | When to Use | Key Difference |
|---|---|---|
| Voluntary Strike Off | When the company is dormant, solvent, and has no remaining assets or liabilities | Quick, cheap, and handled by directors |
| Members’ Voluntary Liquidation (MVL) | If the company has >£25,000 in retained profits or complex structure/history | Offers tax efficiency and legal finality via a licensed IP |
| Creditors’ Voluntary Liquidation (CVL) | If the company has any outstanding liabilities or is technically insolvent | Protects directors, triggers creditor notifications |
If you’re unsure whether your company qualifies for strike off or needs a formal liquidation, speak to us directly – we’ll provide clear, confidential advice based on your situation.
How to Close a Dormant Limited Company - Full Step-by-Step
1. Check Eligibility for Strike Off
You can only apply for strike off under section 1003 of the Companies Act 2006 if the company:
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Has not traded in the last 3 months
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Has not changed names or sold assets
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Has no active liabilities, debts, or creditor arrangements
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Is not facing legal action, insolvency, or liquidation threats
Failing this test? You may need liquidation instead.
2. Settle Any Loose Ends
Before applying to dissolve your company:
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Close the business bank account
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Pay any final Companies House or HMRC fees
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Distribute any remaining assets (or else they pass to the Crown)
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Ensure all Corporation Tax and VAT returns are filed
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Notify HMRC that the company is dormant if not already done
3. File the DS01 Strike Off Form
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Complete Form DS01 via Companies House (online or by post)
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Pay the £44 filing fee
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Have it signed by the majority of directors
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Keep a record of the submission date
“Mr Rikki Burton and team are very professional, efficient and patient. The work conducted was very smooth and the transition Was without any hiccups. They gave time to put evidences upfront to support the liquidation.
Great communication and highly recommended.” Jaspreet Singh
4. Notify All Interested Parties
You must tell the following groups within 7 days of submission:
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HMRC
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Creditors
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Shareholders
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Banks
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Employees (if any remain)
Failure to notify can lead to personal fines or the application being blocked.
5. Wait for Objections and Final Notice
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The strike off application is published in The Gazette
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Creditors have 2 months to object
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If no valid objections are raised, the company will be struck off the register and dissolved
What If the Company Has Leftover Assets?
If your company holds any bank balances, shares, or property when it is struck off, those assets become bona vacantia – property of the Crown.
Reclaiming these assets involves complex reinstatement and court fees. Always extract or transfer any remaining assets before the DS01 is filed.
Should I Get Help Closing a Dormant Company?
If the company is small, clean, and clearly dormant, directors can manage strike off themselves. But if there’s any doubt – group structures, old debts, past trading – professional advice is essential to avoid unintended consequences.
We’ve supported thousands of directors across the UK with fast, confidential company closures. No jargon. No judgment. Just clear, practical guidance to help you move on.
Free Advice From Licensed Insolvency Practitioners
If you want help:
Understanding your eligibility for strike off
Avoiding future personal liability
Knowing whether liquidation is safer
…speak to the expert team at Anderson Brookes.
📞 Call free: 0800 1804 933
📩 Email: advice@andersonbrookes.co.uk
Our support is fully confidential – and tailored to your company’s unique position.
Frequently Asked Questions
Have a company in England or Wales? These are your limited company business debt, liquidation and insolvency questions answered.
Can I liquidate the company myself?
No. Only a Licensed Insolvency Practitioner can place a company into liquidation.
What are the advantages of liquidation?
Placing the company into liquidation will stop debt enforcement, including bailiff action. The directors are usually in control of the process and can choose the liquidator. In most cases, it can be completed within two weeks without needing to attend any formal meetings. Company debts are usually written off unless they are personally guaranteed. Directors who act responsibly can show they handled the company’s financial affairs properly.
Is liquidation the same as dissolving the company?
No. Only a Licensed Insolvency Practitioner can liquidate a company. A director can apply to dissolve a company through Companies House, but only if certain conditions are met. If the company is insolvent, it may be a criminal offence to apply for strike-off. Always take professional advice before doing this. If you think you might qualify for dissolution, call us and we’ll explain the process. See our Licensed vs Unregulated page.
What is compulsory liquidation?
This happens when a creditor applies to court to wind up a company due to non-payment of a debt over £750. If the court agrees, the company is placed into compulsory liquidation. This often leads to more problems for directors, who may find it harder to defend against accusations such as wrongful trading. It is usually better to start the process voluntarily. See Strike Off vs Voluntary Liquidation for more details.
How much will it cost to liquidate my company?
It depends on your situation. In most cases, the directors do not pay the costs personally. The liquidation is paid for using company assets. We are a small practice based in Bolton with low overheads, so we offer some of the most competitive fees in the UK. All costs will be confirmed in writing before we proceed. You may also be interested in CVL Costs.
What is a phoenix company?
This is a new limited company that starts after an old one has gone into liquidation. It allows the business to carry on with the profitable parts of the original company. There are strict rules about reusing a company name, so it’s important to get advice before going ahead. For further detail and more simple explanations of insolvency and liquidation terms see our Glossary.
What is a Members’ Voluntary Liquidation (MVL)?
An MVL is used when a company is still solvent and can repay all its debts. It may be the right option if directors want to retire or step away from the business. MVLs can offer tax benefits, but they must be handled by a Licensed Insolvency Practitioner. See all types of liquidations.
What is wrongful trading?
If a company is insolvent and directors carry on trading, they may be accused of wrongful trading. A director could be held personally liable if they knew, or should have known, that the company couldn’t avoid liquidation and did not act to reduce losses. Acting early helps reduce this risk.
Do you only offer formal insolvency advice?
No. Many businesses contact us who do not need formal insolvency procedures. We help explore all the options, including self-help and informal solutions. If formal action is needed, our Licensed Insolvency Practitioner can act for you directly.
