The DS01 form is how you ask Companies House to strike off your limited company. In simple terms, it’s the official way to shut down a company you no longer need, provided you meet the strict criteria.
But here’s the thing: the DS01 process only works in specific situations. If your company owes money, especially to HMRC or lenders, filing a DS01 could backfire.
What does a DS01 form do?
A DS01 is the form you submit to voluntarily dissolve your limited company. It’s used when:
- The company is no longer trading
- It has no outstanding debts or liabilities
- There are no ongoing legal actions or insolvency proceedings
Once accepted, the company is removed from the register at Companies House and legally ceases to exist.
You can file it online or by post, and it currently costs £10. But this small fee can come with significant risks if you get it wrong.
Can you use a DS01 if your company is insolvent?
No, and this is where many directors come unstuck.
If your company can’t pay its debts as they fall due, or its liabilities outweigh its assets, it’s classed as insolvent. You have a legal duty to prioritise your creditors and act in their best interests. Filing a DS01 in this situation may be seen as an attempt to avoid repaying those creditors.
If a company is dissolved with unpaid debts, any creditor can object. If Companies House believes your application was misleading, or that you should have gone through a formal insolvency route, they can reject it or restore the company to the register. At that point, you may find yourself facing:
- Court action to recover debts
- Director disqualification
- Personal liability if you’ve acted wrongfully
HMRC in particular routinely challenges DS01s filed by companies with outstanding tax debts. They can and do apply for administrative restoration to continue enforcement. It’s important to note that you could be held personally liable for company debt to HMRC.
What’s the difference between a DS01 and liquidation?
Think of a DS01 as a soft exit. You use it when your business is dormant, debt-free and no longer needed. It’s a tidy administrative closure.
Liquidation, on the other hand, is a formal insolvency procedure. It’s designed for companies that do have debts or unresolved liabilities. If your company owes anything to HMRC, lenders, suppliers or even staff, it’s liquidation you need to explore, not a DS01.
What happens if you file a DS01 and still owe money?
If you’ve already submitted a DS01 and realise your company has outstanding debts, it’s important to act quickly. Here’s what could happen:
- Objection by a creditor: Creditors can block the strike-off by lodging an objection within two months
- Restoration of the company: Even after strike-off, creditors can apply to restore the company to the register and pursue you for the debt
- Investigation into director conduct: If it appears you knowingly avoided debts or misled creditors, the Insolvency Service may investigate
The good news is, if you act before the strike-off is finalised, you can withdraw the DS01 and take proper advice.
When is it safe to use a DS01?
There are valid cases for using a DS01, especially if you’re winding down a clean company. It might be appropriate if:
- You set up a company that never traded
- Your company completed a one-off project and has no debts or assets left
- You’ve already distributed all company assets and ensured all liabilities are settled
But even here, be cautious. Double-check your accounts, make sure your last set of returns is filed, and confirm that there’s nothing outstanding with HMRC, Companies House or your bank.
What are the alternatives to a DS01 for companies in debt?
If your company has debts, even just a Bounce Back Loan or unpaid Corporation Tax, there are other routes you should consider.
Creditors’ Voluntary Liquidation (CVL)
Creditors’ Voluntary Liquidation is the correct and legal way to shut down an insolvent company. A licensed insolvency practitioner takes control, sells any remaining assets, and deals with creditors. Unsecured debts and tax arrears could be cleared and even a Bounce Back Loan could be written off. By initiating the process, you’re taking control of the situation.
Company Voluntary Arrangement (CVA)
If the business still has potential, a CVA can help you repay debts over time without closing the company. This route also provides the possibility of applying for a moratorium, to protect you from legal action while the agreement is in place.
Need advice before filing a DS01?
Many directors Google “DS01 form” because it looks like an easy way out. And for some, it is. But for insolvent companies, it’s a risky move that can leave you personally liable for company debts.
If your company is in financial difficulty, speak to someone who can help you make the right call. Our licensed insolvency practitioners can review your position, talk you through your options and make sure you avoid costly mistakes.
You don’t need to navigate this alone. And the earlier you ask for help, the more choices you’ll have. Get in touch for a free, confidential chat with one of our licensed insolvency practitioners.
We’re here to help you find the most responsible, practical and stress-free route forward. Get in touch with our team today for clear advice and expert support.
