A company is a legal entity set up by a person or a group of people for the purpose of carrying out business. There are different categories of companies, with the laws and regulations that apply being specific to the type of company.
For a company to cease to exist, an application must be made to the Register of Companies asking for it to be struck off the Companies House register and dissolved. Business must have ceased for a period of at least three months before applying.
Dissolution of a company with debt
Companies that are dissolving must legally notify all creditors, including HMRC, to give them the opportunity to object to their dissolution. Failure to notify all creditors is a legal offence, which can lead to being banned from being a company director or even prosecuted. Any creditors associated with the company have a total of three months to consider their position and file an objection.
Any creditors that object to the dissolution are showing they have an intention of chasing up the debts owed. If a creditor is seeking the repayment of a debt, they can request that the company be reinstated to the register. Even if a company with debt has been dissolved, it can be reinstated to the register at a later date for the purpose of debt collection.
In some circumstances, the liquidation of a company is preferable over a dissolution. The implication of this must be discussed in depth with an expert in all aspects of insolvency.
Legal advice
Companies are complex legal entities that have obligations to fulfil with HMRC and Companies House. Any action relating to a company should not be undertaken without professional advice.
A leading London law firm, such as Forsters, can provide expert legal advice on all corporate and commercial matters, ranging from the law relating to companies to conflict resolution.
Legal experts have in-depth knowledge about the mechanics of a company and its directors and will ensure your best interests are protected in the event of an issue.
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