What “dormant” really means
A dormant company is still a legal company, even if it is not trading.For tax purposes, it means the company is not carrying on business activity and is not receiving income.
That often surprises business owners. A dormant company is not “finished”; it is just inactive, and it can stay on the register for as long as you want. If you later decide to trade again, you can usually reactivate it rather than starting from scratch.
Should you close it?
This is the first question worth asking, because closing is not always the best answer.If the company may be useful later, keeping it dormant can be the better option, especially if you only want to avoid trading costs for now.
If you are certain the company is no longer needed, strike off is usually the cheapest and cleanest route. But it only works if the company is solvent and meets the eligibility rules set by Companies House.
When strike off is allowed
You can usually apply to strike off a limited company only if all of the following are true:
- The company has not traded or sold stock in the last 3 months.
- The company has not changed its name in the last 3 months.
- The company is not threatened with liquidation.
- The company has no agreements with creditors, such as a Company Voluntary Arrangement.
That last point matters. If the company has debts or unresolved creditor arrangements, strike off is usually not the right route. In that case, a different closure process may be needed.
Step-by-step process
First, make sure the company is truly inactive. Do not leave any trading, invoicing, or money coming in through the company once you are planning to close it.
Then sort out anything still attached to the company, such as bank balances, subscriptions, assets, or domain names. Companies House expects you to deal with assets before you apply, not after.
Next, submit form DS01 to Companies House. The online route is quicker and cheaper: £13 online, or £18 for paper filing. For a company with more than one director, more than half of the directors must sign the application.
After that, copy the application to everyone who needs to know within 7 days. That includes directors, shareholders, employees, creditors, and anyone else with a direct interest in the company’s closure.
Final tax checks
This is the part many people overlook. Even if a company is dormant, you still need to make sure HMRC is properly informed and that all outstanding tax matters are settled before the company disappears.
If the company has traded at any point, HMRC may expect a final Company Tax Return and payment of any outstanding Corporation Tax or other liabilities.If the company has never traded, the process is simpler, but you should still confirm the position before filing DS01.
It is also sensible to check for any VAT, PAYE, or repayment issues before applying. Once the company is dissolved, sorting those things out becomes much harder.
What happens next
Once Companies House accepts the application, it publishes a notice in The Gazette. This gives interested parties a chance to object if they believe the company should not be removed. In most cases, the final strike off follows after the notice period if nobody raises an objection.
After the company is dissolved, it no longer exists as a legal entity.That means any remaining assets can become a problem if they were not dealt with in advance. In practical terms, this is why it is worth doing one careful final review before you submit the form.
Common mistakes
A lot of strike-off applications are delayed because of simple avoidable issues.The most common ones are:
- applying before all debts are settled,
- forgetting to notify relevant people,
- leaving money or assets behind in the company,
- assuming dormant status automatically means strike off is allowed,
- sending the wrong form or using the wrong company name details.
If you are closing a small company, this stage is usually where a little admin saves a lot of trouble later.
Practical checklist
Before you apply, check that:
- the company has stopped trading,
- there are no outstanding debts or creditor arrangements,
- the bank account and assets have been dealt with,
- HMRC is clear on the company’s tax position,
- DS01 is completed correctly,
- all relevant people have been notified.
That is usually enough to tell whether strike off is the right path or whether the company needs a different kind of closure.