When a limited company is dissolved or in other words ‘struck off’, its name is removed from the companies register at Companies House and it will cease to exist legally. To be eligible for this process, directors must sign a declaration of solvency and make sure that all creditors are paid within 12 months.
But what happens if you try to strike the company off despite it being insolvent or otherwise owing money to creditors. You will receive a formal objection letter, as we explore below.
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Objection to Company Strike Off: Process
If the tax authority isn’t notified of the strike-off, it is highly likely that any outstanding tax liabilities will still be discovered as Companies House publishes the details of all companies that have filed a strike-off application in ‘The Gazette’ to alert creditors to the companies that have applied to be struck off three months after the date of the notice.
This will mean the arrival of a letter, usually automated, informing you of the objection.
Typical wording of this letter would read:
“I have received notification that the company may be struck off the Register of Companies held at Companies House. I have objected to this action because, based on the information that I hold, the company has not fully complied with their tax obligations.
Until these arrears are settled and/or any outstanding Company Tax Returns are received, I cannot agree to the company being removed from the register.”
The letter will also give clear instructions about the arrears, or whatever has caused the objection.
How to Find Out Who Objected to Strike Off
You can find out where the strike off objection came to you via the following method
- Write to Companies House at enquiries@companies house.gov.uk
- The email should come from a company director
- Include your limited company name, number and any reference they’ve given you in their communications
- Polittely request further details of the objection
- In time, Companies House will respond with details of the specific objection, allowing you to take appropriate action
Who can Object to a Company Dissolution and Under What Circumstances?
Anyone who is connected to the company can raise an objection to its dissolution, including shareholders, creditors and employees. If the objections are upheld, the company may be restored to the official register as if the dissolution had never happened in the first place.
There are a range of circumstances that can lead to an objection, including:
· Failing to inform all the relevant parties that the company is being struck off
· Directors declaring solvency when the company is in fact insolvent. This could be deliberate or as a result of accounting inaccuracies
· An employee wanting to take legal action against the company or an irate creditor starting the process of legal action to have the company wound up.
· There are suspicions that directors have committed fraud or traded unlawfully
· Part of the process has not been followed to the letter. For instance, the company failed to cease trading or changing the company name three months before the strike-off application.
Objections can be raised via email or sent in writing by post to the Registrar of Companies at Companies House. Raising an objection suspends the company’s strike off application until the situation has been investigated fully. This typically takes between three and six months.
Creditors can raise an objection to the company being struck off if it is still owed money and the company has been removed from the official register as long as it can provide proof that the debt exists.
What Happens when Strike Off Objections are Upheld?
In the scenario that Companies House upholds the objection, the strike off application will go no further. If the company has already been dissolved, it will be restored to the official register and the actions of the company directors prior to the dissolution process will be investigated . If any evidence of misconduct or fraud emerges, limited company directors can be disqualified for up to 15 years and may receive a custodial sentence.