Dissolution of a company by voluntary strike off
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11 March 2011
When is it commercially viable to
dissolve a company?
There are a whole host of reasons to
strike off a company, the most obvious being when the directors want to
retire. However, frequently in large group companies there are often a
large number of shell companies not really doing much. In other cases a
company within a group may have been set up to exploit an idea which
Advantages in voluntary strike off
There are many positives in striking off a
company such as: reductions in administration, risks and liabilities.
It may be advisable to simplify your group structure into a more "lean"
and manageable state.
Applications for voluntary strike
The Companies Act 2006 ("the Act") governs
voluntary strike off of a company (ss 1003-1009).
Application are completed by filing form DS01
enclosing the relevant fee. There are a number of rules that
bit when submitting the application such as: applications must be made
by the company directors or a majority of the directors.
Notification to interested
The person who files the application must
within 7 days notify the following parties who on the day of the
application are: directors of the company who have not signed the DS01;
members; employees and creditors.
The Act provides rules which state when a
document is delivered. A document such as a DS01 is
given to a person if (1) delivered to him, or (2) left at his proper
address, or (3) sent by post to him at that address.
Once the application has been filed
directors are not absolved from the duty to notify interested parties.
Section 2007 of the Act places a continuing obligation on a director to
notify were a party becomes an interested party.
If the directors fail in their obligation
to notify he or she may be committing an offence. If it is found that
the director closes the company with intention to conceal the
application then he or she may be imprisoned.
Are there any restrictions on
voluntary strike off?
Yes, these restrictions include:
if in the previous three month the company
has traded/carried on business and/or changed its name.
It is important to continually review your
company structure and assess whether each company is serving its
Paul is a trainee
solicitor specialising in litigation. Paul can be contacted via
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Article Published/Sorted/Amended on Scopulus 2011-03-16 13:21:02 in Legal Articles