How to keep same company name and avoid late filing penalty

How to keep same company name and avoid paying late filing penalty? Basically, you dissolve the company already incurred the late filing penalty then setup new one with the same company name. Thus, you do not have to pay late filing penalty. Is this legal? yes.

Conventionally, the Companies Act does not stop company director to dissolve a limited company and setup a new one with the same company name to avoid paying late filing penalty.

Automatic late filing penalty

Commonly, company dissolve their limited company and setup a new one with the same company because firstly, they want to keep the same company name and secondly they do not want to pay the expensive late filing penalty.

Typically, their company incur late filing penalty because they did not file their dormant account thinking it is a dormant company and it has nothing to show anyway.

Unfortunately, Companies Act said otherwise. You will get automatic late filing penalty unless you can show your circumstance is exceptional. In that case, Companies House may waive the penalty.

Universally, the maximum late filing penalty for late filing of company accounts is £1500 for a private limited company and £7500 for a public limited company.

For that reason, sometime it is cheaper to setup a new company with the same name and avoid the late filing penalty altogether. Before, you could setup the new company with the same name, you must dissolve the existing company with the late filing penalty first.

This is only possible for a dormant company that has never traded before. And, it has no bank accounts. This is because your new company would have a different registration number to that of your existing dormant company. Legally, the new company is a completely new entity with no trading history.

Once you have legally dissolved your dormant company, you do not have to pay the late filing penalty. Also, no further filings for that dissolved company.

Step by step to dissolve company with late filing penalty and setup new one with the same name

Generally, this is how to keep same company name and avoid late filing penalty. First of all, you must initiate the company dissolution process with companies House.

Actions to takeCompanies House applications
Step 1 Submit your application to strike off your limited company with Companies House. Your director must sign the form DS01.

Step 2
Once your limited company is dissolved by Companies House, you may then incorporate a new limited company with the same name by submitting your new company incorporation form, the IN01 with Companies House.

The dissolution process will take about two months to complete provided no third party objection. Your application will be published in the Gazette.

Your company registration process should take about one business day. Usually, it is done online.

Companies House will reject your company incorporation form if your existing dormant company dissolution is still in progress as your company name is considered not available or already taken.

It is possible to carry out your dormant company dissolution and new company incorporation yourself if you have time to monitor and check with Companies House of the dissolution progress. the timing is crucial here to avoid your company name being registered by someone else after it was dissolved.

Seek accountants advice if you are not familiar with company dissolution and incorporation.

Voluntary strike off your company

Voluntary strike off your limited company means a director or directors of your limited company could make an application with Companies House to have your company dissolved and be removed from the register.

This process will terminate your company’s existence for good. After your company has been dissolved, your company names would be available for public to register as theirs company names.

Your company must meet certain criteria before applying to be struck off.

Apply for a voluntary striking off your limited company

You apply using the Form DS01. The form must be signed and dated by all directors of your company.

Your application to strike off your company will be published in the Gazette for two months. During this period, if there is any person or organisation objects to your company being struck off, the process will be on hold and Companies House will communicate with you.

Examples of likely reasons your company’s striking off process would be put on hold are:

  1. Your company’s Value added tax (VAT) still unpaid.
  2. Your corporation tax are still outstanding with HM Revenue and Customs.
  3. Your creditors are pursuing their debts legally.
  4. Your employees were not informed of your intention to strike off your company and you still owed them money.

Companies House would no longer pursue any late filing penalty and you do not have to submit further confirmation statement and company account with Companies House from that date your company is official dissolved.

For example, if your company was a dormant company and you forgot or you thought since it is a dormant company, you may not require to submit a dormant account. The account is three months late already and the late filing penalty would be £750.

Instead of filing your dormant account and pay the £750, you decided to apply for your company to be struck off. In this situation, Companies House would not pursue the late filing penalty.

If you require help with dissolving your dormant company, our accountants would be able to assist you. We will handle the dissolution process from start to finish for you.

Companies House strike off your company

Companies House has the power to strike off your limited company if they have reasonable cause to believe that your limited company is not carrying on business or in operation. This usually happens when your company did not submit your Confirmation Statement and your company accounts are overdue.

First letter from Companies House

Companies House will send a letter to your company’s registered office address to remind you of your company’s overdue confirmation statement and/or overdue company accounts. If they receive no answer from your company director within 14 days of the letter sent, they would send second letter.

Second letter from Companies House

They will send a second letter to your company’s registered office stating that no answer has been received from you since the first letter sent to your limited company’s registered office.

And, If they receive no answer within 14 days of the second letter from the date of the second letter, a notice will be published in the Gazette with the intention to strike off your company from the Companies House register.

Publish in the Gazette & Dissolve your company

At the expiry of the 14 days after the second letter was sent, Companies House would publish their proposal to strike off your limited company in the Gazette, and send a notice to your company’s registered office informing you that your limited company will be dissolved at the expiry of two months from the date of the notice.

If your limited company has liability, in other words, owed money to someone or banks or organisations, every director and officer of your company continues to be liable and may be enforced as if your company had not been dissolved after dissolution in some situations.

How to avoid your company being struck off?

It is important that you have access to the mails send to your company’s registered office address. If you no longer has access to mails sent there. Please provide Companies House with your new UK address that you can have access to your mails.

For example, if you changed your company registered office provider recently and you must inform Companies House of the change, usually your service provider would submit the change with Companies House for you but sometime they forgot. If you do not know how to do this, contact our accountants, they would be able to help you.

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