CTM36205 - Particular topics: company dissolution: distributions in anticipation of dissolution: introduction

Companies that cease business may wish to save the costs and issues involved in the 聽winding-up procedure under the Insolvency Act 1986 (IA86) 聽They can do this by either:

  • asking the Registrar of Companies to strike the company off the Companies Register and dissolve it under CA06/S1000,

or

  • becoming inactive and waiting to be struck off and dissolved.

Dissolution under S1000 is not a 'winding-up'. 聽See CTM36105.

Such companies normally pay off their creditors and distribute the remaining assets to their shareholders. 聽As there is no winding-up, CTA10/S1030 does not apply and these distributions generally fall within CTA1000(1) B and G, see CTM15250 and CTM15350.聽 However, CTM36220 to CTM36240 explain circumstances, originally by extra-statutory concession but now under statute, in which CT distribution treatment does not apply.

Where a company other than one having a share capital proposes to distribute its assets and seek or await striking off, the case should be submitted to聽BAI (Technical).