‘Striking Off’ is the common term for removing a company from the official UK register of limited companies.
Company strike off is sometimes referred to as dissolving a company or simply dissolution.
In this article we’ll explore the meaning and process of striking off, so that you’re well informed about how and when to do it.
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- What is Company Strike Off?
- Why Would a Company be Struck Off and Dissolved?
- How to Strike off a Company
- How do you Stop a Company Being Struck off?
- Can you Strike off a Company with Debts?
- Criteria for Dissolution
- How Long Does it Take to Strike off a Company?
- How Do I Notify HMRC of Striking Off?
What is Company Strike Off?
Striking off is the formal process by which a UK limited company is removed from the official register at Companies House, meaning it will cease to exist.
You strike off a company with a form called the DS01.
It can either be done voluntarily, meaning a company member fills in the necessary forms and submits the company for removal, or it may be done compulsorily, as when Companies House themselves inform you of pending ‘strike off action.’
Striking off is not appropriate where the business has debts, in which case liquidation is the correct method to close down the company.
Why Would a Company be Struck Off and Dissolved?
Voluntary strike off may be chosen due to:
- Company isn’t profitable or has never taken off
- Directors dispute
- Upcoming business challenges mean it’s prudent to close it
Compulsory Strike Off occurs less commonly, but could happen when:
- Companies House sends you a Compulsory Strike Off letter, based on having ‘reasonable grounds’ that the business is no longer being used.
- Reasons could include a failure to submit an annual confirmation form, file accounts in a timely manner, or due to having changed company address without informing Companies House.
How to Strike off a Company
There are two methods available to strike off a limited company.
(1) Use the .Gov Online striking off service here.
(2) Download Form DS01 here and send it to the following address:
For companies registered in England and Wales:
Companies House, Crown Way, Cardiff, Wales, CF14 3UZ,DX 33050 Cardiff.
For companies registered in Scotland:
Companies House, Fourth floor, Edinburgh Quay 2, 139 Fountainbridge, Edinburgh, Scotland, EH3 9FF, DX ED235 Edinburgh 1
For companies registered in Northern Ireland:
Companies House, Second Floor, The Linenhall, 32-38 Linenhall Street, Belfast, Northern Ireland, BT2 8BG,DX 481 N.R. Belfast 1.
How do you Stop a Company Being Struck off?
Once Companies House has commenced the strike off procedure, their first step will be advertising the action in the Gazette, which is the official journal of public record.
To search The Gazette for a strike off click here.
These advertisements are public and, once published, are left for two months before further action is taken. This is so that parties who may wish to object may have time to do so.
The likely reason for objection would be that a Creditor (which may be an individual, a company, or HMRC themselves) would point out the existence of debts. If this can be proven, Companies House will deny the request for Strike Off until due procedure is followed.
The normal way to object is by sending an email to: email@example.com, including supporting evidence concerning your reasons for objection.
Can you Strike off a Company with Debts?
The Strike Off process is that is cannot be attempted on a business with debts.
Debts must be cleared in full prior to commencing the Striking Off process and, where a company has assets, these must be sold and the money distributed to shareholders. If this isn’t done correctly, the Crown will automatically all property and rights due to a law known as Bona Vacantia.
There must be no winding up petition filed against the company, nor an existing agreements with corporate creditors, such as a company voluntary arrangement.
If a company is insolvent, the correct method of closing it down is liquidation, not striking off.
HMRC has an officer who monitors the Strike Off Applications within Companies House so that objections can be made where debts are present.
Criteria for Dissolution
If you’re considering strike off, ensure your situation meets the following criteria:
- You haven’t traded, or sold company stock within 3 months
- The company hasn’t changed its name in the last 3 months
- You don’t have debts or creditors threatening liquidation
- No financial agreements with creditors, such as a CVA
- All staff have been made redundant, and any statutory arrears settled in full
- You’ve contacted HMRC to close payroll schemes, deregister for VAT, and submit final accounts
- All business assets distributed between shareholders
- Closed business bank accounts
If any of the above hold true, you will need to speak with an expert immediately to ascertain the best course of action.
How Long Does it Take to Strike off a Company?
Assuming no objections are raised, you should be looking at a minimum of three months from the moment of submitting the DS01 form, which is the official document required to start the process.
Companies House have to advertise the intention for at least 2 months, after which the paperwork takes a further month to process, on average.
You’ll receive a confirmation letter from Companies House when the process is complete.
How Do I Notify HMRC of Striking Off?
Within 7 working days of sending the application to the registrar, company directors need to notify HMRC. Because it’s broken up into different departments that will entail several different actions.
(1) Tell HMRC you’ve stopped employing people here
(2) Inform Corporation Tax Services by writing to them at:
Corporation Tax Services
HM Revenue and Customs
(3) Submit final accounts and a tax return in the usual fashion but stating that these are ‘final trading accounts’.
Who Else Should We Inform About the Proposal to Strike Off?
Once you’ve submitted the DS01 Form to Companies House:
- company members (shareholders)
- any outstanding creditors
- a director who didn’t sign the DS01
- if you’ve established a pension fund for employees, you should inform the person managing it, plus trustees