DS01: The Companies House form/service for limited company strike off: explained

If you want to close down your limited company (also known as a Personal Service Company), the cheapest and simplest option by a huge margin is to apply to have it voluntarily struck off the Companies House register.

But whether you apply for company dissolution using the paper DS01 form or use the online DS01 service, the submission you make gets heavily scrutinised. In fact, before you ping off the requisite form, you should have a deep think about the rules and potential pitfalls of this form to end your company’s existence, writes Nick Hood, consultant for Opus Business Advisory Group.

Five key conditions to dissolve a limited company of your own accord

Your PSC must tick quite a number of boxes very precisely to be struck off voluntarily:

1. It must be solvent, i.e. it can pay any outstanding debts within 12 months.
2. It must have no outstanding legal action against it and it must not be subject to any creditor agreement such as a CVA or a Time To Pay agreement with HMRC.
3. It must not have traded or carried out any activities other than those necessary to strike off the company in the last three months.
4. It cannot have changed names in the last three months.
5. It must not have sold any assets or rights it owned in the last three months.

Completing the DS01 paper form/online service needs absolute precision.

Indeed, a substantial number of striking off applications are rejected because of errors.

What happens once my PSC has been struck off using DS01?

It will take at least three months from the date you submit the DS01 form for your company to be struck off the Companies House register.

And that will only happen if the DS01 form got signed by a majority of the PSC’s directors.

Assuming you have completed the DS01 correctly, on paper or online, and there are no objections from interested parties, you will subsequently receive an acknowledgement from Companies House (in the post or in your inbox) that your PSC has been struck off.

From that point on, the PSC and its business will cease to exist.

Its name will be free for other companies to use and you will not be able to be use it or any similar name to go back into any business without serious risk of legal repercussions such as financial penalties, a directorship ban and personal liability for company debts.

What is Bona Vacantia?

If the company has any cash or assets that have not been distributed to the shareholders before the company is struck off, they will pass to the Crown through a process known as ‘Bona Vacantia’ (‘Ownerless Property’).

To get those assets back, you would have to restore the company, which is a lengthy, complex and expensive exercise.

Top 10 things to do before you apply for a PSC to be dissolved via DS01

There’s lots of things to do before you apply to Companies House to have your company dissolved via DS01.

Exactly how many things, will depend on the size and nature of your business.

But here’s the top 10 most likely things to do or action before submitting the DS01:

1. Complete all outstanding work and collect monies owed by clients
2. Make any staff redundant and pay their final wages, along with any other monies due such as holiday entitlement.
3. Sell company assets and distribute the proceeds among the shareholders.
4. Prepare final accounts and a company tax return and send them to HMRC and Companies House, explaining clearly that these are final accounts as the company will soon be dissolved.
5. Pay any tax liabilities due to HMRC, such as VAT, PAYE, NI or Corporation Tax.
6. Ask HMRC to close down the company’s payroll scheme if there is one.
7. Deregister for VAT.
8. Pay the company’s outstanding debts
9. Close company bank accounts.
10. Transfer website domain names and close utility accounts and other monthly service accounts in the PSC’s name.

Notifying stakeholders

There’s a wide range of people you have to tell that you are having your PSC struck off by sending them a copy of the DS01 within seven days of submitting it. This is a really serious step, because deliberately not notifying them with a copy of the DS01is a criminal offence subject to a maximum jail term of seven years, plus an unlimited fine.

Among others, you need to notify:

1. Shareholders
2. Creditors such as:

• Banks
• Suppliers
• Former employees if the company owes them money
• Landlords or tenants
• Guarantors

3. HMRC and Department of Work and Pensions (DWP)
4. Employees
5. Managers or trustees of any employee pension fund
6. Any directors who have not signed the form

Be aware, any interested party can object to the striking off, which may lead to Companies House rejecting the DS01 application.

Outstanding debts

As alluded to, any remaining bank accounts are automatically closed once your PSC has been struck off.

But be careful here because trying to use them after you have sent off the DS01 will make your application to strike off invalid, because it counts as a continuing trading activity, which isn’t allowed.

So any debts still unpaid after submitting the DS01 will have to be settled personally.

Voluntary strike off is not a get-out-of-jail-free card

Striking off doesn’t mean that unpaid debts and taxes can be ignored or that they simply disappear!

Creditors can apply to have a company restored and if successful, they can then chase repayment. Likewise, HMRC can seek taxes still owed, with additional penalties added to the amount.

In certain circumstances HMRC can make these personal liabilities of the directors. A liquidator could be appointed. It’s imperative that all debts are settled prior to striking off or there could be all manner of adverse consequences.

Is voluntary striking off, using the DS01 right for you?

If your PSC is solvent and can pay all its debts and if you are willing and able to play by the quite complex DS01-related rules, then it is a worthwhile route to ending your PSC’s life. The big downside is what happens if there are liabilities you miss or which only surface after striking off. Then the repercussions can be considerable and sorting out the problem can be deeply messy. But don’t just take my word for it! All the gory details of the not straightforward process of strike off and dissolution – which DS01 is a key part of -- and restoration can be found here.