When a business is forcibly removed from the official register at Companies House it is called a compulsory strike off.
Usually this is a voluntary process instigated by one or more directors. But sometimes this process is compulsorily forced upon a company. We’ll explain why and what you can do about it.
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What is Compulsory Strike Off?
Compulsory Strike off is when one party files a petition to have another struck off the list at Companies House. This is commonly Companies House itself if it believes a company is no longer trading.
Compulsory strike off is described in Section 1000 of the Companies Act 2006 as Registrar’s power to strike off defunct company
Why Would a Company Be Struck Off?
A company might be forcibly struck off by Companies House due to:
- Failing to submit accounts by the the required deadlines
- Not submitting a confirmation statement annually to Companies House
- If a company has no directors appointed
- If the company has ceased trading
What’s the Companies House Strike Off Process?
You will receive at least two warning letters before any action is taken against your company. These letters will clearly explain the reasons they feel your company should be struck off, and you will have every chance to object or get your paperwork in order.
First Gazette Notice for Compulsory Strike Off
Following the letters, Companies house will then publish Gazette Notice which is an advertisement of the impending action in the Gazette, the official journal of public record. Once in the public domain, your business customers may become aware of the action being taken against the company.
What the Companies Options, if We’ve Received a Strike off Warning?
Usually, the course of action should be straightforward. If you have paperwork outstanding, you need to bring this up to date.
If there is a legal transgression of some kind, such as no appointed directors, you can appoint one.
At all times keep in clear communication with Companies House as to your position and intentions and the issue should be easily resolved.
If You’re Happy for the Strike Off to Proceed
If you’re happy for the company to be struck off, you can simply let the process continue.
If the company has outstanding debts, however, it should be liquidated, rather than attempting to dissolve the company via the company liquidation process.
What are the Consequences of a Compulsory Strike Off?
The consequences of compulsory strike off include:
- the company will cease to trade and conduct business activities
- company assets will become property of the crown
- directors risk disqualification if it’s found they have acted improperly
- directors could face personal liability for corporate debt if misfeasance is proven
- you may have difficult getting finance in the future
Can You Be a Director After Company Strike Off?
Compulsory strike off can have negative consequences for directors including potential disqualification for up to 15 years, if it is discovered that directors acted wrongfully. Many directors do not realise that submitting confirmation statements and company accounts is a statutory requirement.
Do You Need Advice on a Compulsory Strike off Notice?
Our licensed and regulated insolvency practitioners can offer you expert guidance on what to do if you’ve received a compulsory strike off notice.
They have experience mediating with Companies House, and offer a free advice service for directors facing difficulties.
Swift responses are key when dealing with Strike Off notices, especially if there are extraneous circumstances which are making it difficult for the company to fulfill its statutory obligations.
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