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 winding-up procedure under the Insolvency Act 1986 (IA86) 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'. See CTM36105.

Such companies normally pay off their creditors and distribute the remaining assets to their shareholders. 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. 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 BAI (Technical).