How to keep the same company name and avoid paying a late filing penalty? Basically, you dissolve the company already incurred the late filing penalty then set up a new one with the same company name. Thus, you do not have to pay the late filing penalty. Is this legal? yes.
Conventionally, the Companies Act does not stop the company director to dissolve a limited company and set up a new one with the same company name to avoid paying the late filing penalty.
Automatic late filing penalty
Commonly, company dissolve their limited company and set up 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, the Companies Act said otherwise. You will get an 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, sometimes it is cheaper to set up a new company with the same name and avoid the late filing penalty altogether. Before you could set up 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 set up a new one with the same name
Generally, this is how to keep the same company name and avoid the late filing penalty. First of all, you must initiate the company dissolution process with companies House.
| Actions to take | Companies 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.
