A strike-off, also known as dissolution, is when a company ceases to legally exist.
A company can strike off voluntarily or the strike off can be forcefully initiated by Companies House due to late filing of statutory documents like Annual Accounts or Confirmation Statements.
A compulsory strike off means a company is formally closed and has been removed from the official register by Companies House.However, the compulsory strike off notification will remain at the filling history of Companies House website.
Below, we will explore why a company would be struck off and how to stop compulsory strike off
Types of company closure or dissolution.
A company can be struck off the Companies House register due to various reasons.
Voluntary strike off
Directors of a company can apply to dissolve or close the company voluntarily if required. This is referred to as ‘Voluntary Strike Off’. Directors may want the company to be struck off if they wish to retire and there is no one to take over the company’s management.
Additionally, the company may apply for a voluntary strike off if the company is a subsidiary whose name is no longer needed and if the company was originally set up to exploit an idea that turned out not to be feasible.
Some companies that are dormant or no longer trading can choose to apply for strike off as well.
If you choose to strike off the company voluntarily, you will need to submit a DS01 form.
To strike off using a DS01 form, the company must not have:
- Traded
- Engaged in any activities that require to dissolution of the company
- Sold any properties owned by the business while trading
- Altered its name
If the business was engaged in any of the above activities, it would have to wait for 3 months before starting the strike off process.
Compulsory strike off
When Companies House strike off a company forcefully it is referred to as Compulsory Strike off. A company can be forcibly struck off by Companies House due to;
- Failing to file company accounts on time.
- Failing to pay taxes.
- Failing to declare a new company address.
- Late submission of penalties
- Not actively trading.
- Failing to correspond with Companies House.
What is the process of Companies House strike off?
Before Companies House initiates a compulsory strike off, it sends two official formal letters warning the company of the proposed strike-off and explaining the issues and reasons.
These warning letters are usually sent to the company’s registered office address as detailed on Companies House. It is important to keep Companies House updated about a change of address.
If Companies House does not receive a response or action, it publishes the first strike off notice known as a ‘first gazette strike off notice‘.
This states that the company has two months before it will be struck off the register at Companies House and legally dissolved.
The public notice is published to inform the general public, shareholders, suppliers, employees, and creditors that the company is about to be dissolved. The notice allows creditors to object to the notice within 2 months since they are owed money and when the company is struck off, they will not have access.
How can I stop compulsory strike off?
Reply to Companies House
Confirm that your company is still active and trading. Ensure your company remains actively engaged in business activities and if it is dormant, file all the necessary documents to confirm its status.
Also, inform them of the steps you’re taking to submit the confirmation statement and/or annual accounts. If you need extra time, ask Companies House for an extension
Submit annual accounts and confirmation statements without delay.
A business can avoid being struck off by filing statutory documents on time with Companies House. Each company, whether trading or not, must annually file a set of accounts with Companies House which shows how a company has performed over the accounting period.
Annual accounts must be filed within nine months after your accounting reference date while confirmation statements need to be filed annually within 14 days of the end of your confirmation period.
For VAT returns, the deadline is usually seven days after the end of an accounting period according to HM Revenue & Customs (HMRC).
Additionally, make sure to inform HMRC of any changes to your registered office address within 30 days. Regularly update any changes in company details including those of the directors.
Icon Offices can help you file Annual Accounts and Confirmation Statements quickly and accurately. If you have missing documents or codes from Companies House we can even help you get them at no additional cost.
What options do I have following a compulsory strike off?
Object the strike-off
If you’re a shareholder or another interested party, you can object to the company’s removal from the Companies register. You can challenge the strike-off by providing evidence of all your statutory documents to demonstrate compliance with Companies House requirements or evidence showing that you have a valid reason to request a suspension of the company closure.
If the strike off is not challenged, a second gazette notice will be issued to announce the business has been struck off the Companies House register. This is a final notice and the company closure cannot be suspended after this notice has been issued.
Dissolve the company
You can dissolve the company if you accept the strike off. This is after all the directors agree with the decision. However, the company must:
- Not have outstanding debts
- Ceased trading
- Have realised all your assets
If you want to accept the strike off and close your company but have outstanding debts and/or assets, you’ll need to follow the legal dissolution route of Company Liquidation. Our experts can help guide you through this process, allowing you to settle debts, realise assets and successfully close your business.
Whether you are voluntarily initiating a compulsory strike off or it is forced you can still apply for its restoration.
If you want to dissolve your company, your application may take a minimum of 8 weeks to process. This is to ensure that a third party does not raise any objections to you closing your company.
In any case, a forced Compulsory Strike off gives a bad impression about the company to its clients. It shows that the company and its directors were not compliant with Companies House rules and regulations. Also, you cannot remove the compulsory strike off notification from the filling history from Companies House website.These details remain publicly available on Companies House website.
Hence, it is best to submit all required documents and submit your company closure application voluntarily to avoid any issues in the future.
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