Closing a company using a DS01 form

Closing a company with a DS01 form involves you voluntarily striking the business from the register at Companies House. It is inexpensive and relatively straightforward, but there are other closure options that may be more appropriate depending on the financial position of your business.

Closing your company with a DS01 form is only appropriate if the business is solvent – meaning it can repay all its creditors, plus interest, within 12 months.

If the company has debts it cannot repay, you may have to consider liquidation as a way of bringing the business to a close and settling its outstanding affairs.

Begbies Traynor Group is the UK’s leading independent business recovery specialist, and can provide tailored, reliable professional advice on company closure.

What is a DS01 form?

A DS01 form is used to voluntarily dissolve a limited company. It is sent to Companies House, and if accepted, results in strike off from the Register of Companies. Prior to sending form DS01, the company needs to meet certain eligibility criteria:

• It must not have traded for three months
• There must be no legal action being taken against the company#
• You should not have changed the company name in the last three months
• The business must be solvent

You can close your company with a DS01 form, and with no specialist input, but it is highly advisable to seek professional confirmation that the business is solvent before proceeding.

How to complete form DS01

The DS01 form for voluntary strike-off is submitted directly to Companies House. Once you have made the application you should send a copy to any directors who have not signed the form, and to all shareholders, creditors, and employees.

Companies House will then place a notice in the Gazette giving creditors the ability to object to the strike-off if they are owed money by the company. If a creditor claims a legitimate debt, the business can be reinstated to the register.

This is one of the reasons why closing a company with a DS01 form is not always appropriate - you could be accused of misconduct if you attempt to close your business down when it owes money.

What other company closure methods are available?

Two formal closure methods also exist:

• Members’ Voluntary Liquidation (MVL) - for solvent businesses
• Creditors’ Voluntary Liquidation (CVL)  - for those that are insolvent

These procedures require the appointment of a licensed insolvency practitioner (IP) who ensures your statutory duties are fully met, and that the company is closed down in an orderly manner.

What are the potential issues of closing your company with a DS01 form?

You could unknowingly owe money to a creditor

Creditors can come forward to make a claim when the application is being administered, or after the company has been struck off. The process will be suspended if a claim is made, and you may need to enter Creditors’ Voluntary Liquidation if the business becomes insolvent.

You may face misconduct allegations if legitimate creditors exist

As we mentioned earlier, the company can be reinstated to the register following dissolution if Companies House determine that a creditor claim is legitimate. This can ultimately lead to accusations of misconduct if it is believed you attempted to close your business knowing that it was insolvent.

It is an inexpensive closure method, but not necessarily appropriate

Strike off being a low cost method of closing a company is attractive, but the situation can be more complex than initially thought in some instances. Contingent liabilities sometimes arise, which make your company insolvent. Contingent liabilities can result from claims made against the company by employees, for example, or related to product liability.

Seek professional insolvency advice before proceeding

Our partner-led team of licensed insolvency practitioners can provide trustworthy, unbiased advice on whether to close your company with a DS01 form, or whether liquidation may be the most appropriate solution. We offer free, same-day consultations, and operate a broad network of offices around the UK.