How may a solvent company be brought to an end?

How may a solvent company be brought to an end?

• A. By applying for administration
• B. By using a simpler striking-off procedure rather than going through a formal liquidation
• C. By merging with another company
• D. By converting to a charitable status

Answer: (B)

The idea being tested is that a solvent company can be ended by a straightforward dissolution, not by formal insolvency procedures. When a company has no ongoing trading, no outstanding liabilities, and is no longer needed, the quickest route is to apply for strike-off from the company register. This is cheaper and simpler than liquidation because it doesn't involve appointing an insolvency practitioner or going through a formal winding-up process. In practice, the directors apply to strike off (typically via a form filed with Companies House), ensure accounts and returns are up to date, and the company has ceased trading. A notice is published in the Gazette, and there is a two-month window for any objections. If there are no objections, the company is struck off and loses its legal existence. Any remaining assets should already be dealt with (distributed to members or creditors) before the strike-off. Administration is for insolvent companies needing rescue, merging would create a new entity rather than ending the existing one, and converting to charitable status changes the company's regime and purpose rather than simply ending it.

The idea being tested is that a solvent company can be ended by a straightforward dissolution, not by formal insolvency procedures. When a company has no ongoing trading, no outstanding liabilities, and is no longer needed, the quickest route is to apply for strike-off from the company register. This is cheaper and simpler than liquidation because it doesn't involve appointing an insolvency practitioner or going through a formal winding-up process.

In practice, the directors apply to strike off (typically via a form filed with Companies House), ensure accounts and returns are up to date, and the company has ceased trading. A notice is published in the Gazette, and there is a two-month window for any objections. If there are no objections, the company is struck off and loses its legal existence. Any remaining assets should already be dealt with (distributed to members or creditors) before the strike-off.

Administration is for insolvent companies needing rescue, merging would create a new entity rather than ending the existing one, and converting to charitable status changes the company's regime and purpose rather than simply ending it.