As of 31 March 2018, there are 14,254 CIC’s now registered in the UK and we all understand that there comes a time in which the directors may feel it is no longer necessary or financially possible to keep the CIC open and trading.
This article will talk you through the criteria in which you must meet in order to voluntarily shut down a CIC and how to do it.
Criteria that must be met
There are several criteria that you must meet in order to approve the application to Companies House so that the process of closing the business can begin. They are as followed:
- The Company must not have traded in the last 3 months. I.E No Income or Expenses in the last 3 months except from the sale of assets
- The Company’s name must not have changed in the past 3 months
- The Company must have settled all of their debts to people who they owe money to. If this cannot be done, then the company needs to be referred to a liquidator
Aspects you may wish to sort out before applying for dissolution of the company
- Notify all relevant parties about the company closing down. For Example, Employees and people who you owe money to. You may want to also notify any relevant organisation or professional body who has an interest into your busines
- You may want to close the company bank account and transfer any website domain names before you apply for dissolution
- The process associated with the Transfer of Assets to another not-for-profit organisation should be sorted out as all assets are locked into a CIC on Cessation
- You need to ensure that all paperwork is kept up to date and accessible to HMRC in case of an investigation such as bank statements as these will not be accessible once the bank account has been closed
Things to do once the application has been made
You must send a copy of the application within 7 days to the following people:
- HMRC and the Department of Work and Pensions (payroll only)
- Any outstanding creditors
- Any Directors who have not signed the DS01 form
You must also send a copy of the application form to anybody who becomes a relevant person within the organisation after the application has been made.
How to Strike off a Company
- You must fill in a DS01 form and send this off in the post along with a £10 cheque payable to Companies House. You will need to write the Company’s name and number on the back of the cheque.
- The DS01 form must be signed and dated by the relevant directors:
- The sole director, if there is only one
- Both Directors, if there are two
- By all directors, or the majority of directors, if there are more than two.
What to do if you wish to withdraw your application to strike off your company
- A company must withdraw their application to strike off their company if one of the following scenarios occur:
- The Company trades or otherwise carries on business
- The Company changes its name
- The Company becomes subject to formal insolvency proceedings
- The application can either be withdrawn using the webfiling service or by completing a DS02 form.
If you need any more help or guidance surrounding this then please click here >
Article by Ryan Harpin