Dissolution
Dissolution is the process of ending the life of a
company. It is a reasonably simple process details of which
can be found at www.companieshouse.gov.uk
Dissolution should only be used where there are no assets or
liabilities within a company and where the value of the share capital
is below £4,000 (if above this amount the government’s Treasury
Solicitor may pursue the shareholders for payment of the share capital
since it represents a Bona Vacantia asset).
Once a business is dissolved any assets it has become the property of the state. If a business is later found to have liabilities then there may be repercussions to the directors and/or shareholders.
It is recommended that liquidation (e.g. a solvent liquidations such as members’ voluntary liquidation (MVL) [LINK]) is used where the business traded, incurred tax liabilities or had employees rather than dissolution. An MVL provides some protection to shareholders and the directors in the event that some unknown liabilities surface.