Q&As

Are the tax implications of a company liquidation the same as where the company is voluntarily struck off?

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Published on LexisPSL on 21/02/2019

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • Are the tax implications of a company liquidation the same as where the company is voluntarily struck off?

Any company, whether public or private, can apply to the Registrar of Companies to be struck off the register of companies and dissolved. For more information, see Practice Note: Voluntary striking off and dissolution.

A members' voluntary liquidation (MVL) is an alternative route where the company is solvent, for which see: Members' voluntary liquidation (MVL)—overview.

From a general perspective, striking off may be the right option if the company is dormant or has never traded. It may also be preferable if the company’s affairs have been fully dealt with and there is no risk of any remaining assets/liabilities giving rise to a claim and resulting in objection to the striking-off and if tax clearance has been obtained. However, the dissolution process is not available within three months of any change of name, any trading or any sale of company property and does not provide any protection for any class of stakeholder, eg directors and shareholders, and creditors. Despite the fact that costs are lower, there is a higher risk of ‘come bac

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