‘Striking Off’ is the common term for removing a company from the official UK register of limited companies.
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.
Do You Need Advice About Strike Off?
What Does Strike Off Mean for a Company?
Also called ‘dissolution’, 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
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.’
Why Would you Strike off a Company?
A company might voluntarily strike off their company due to:
- Company isn’t profitable or has never taken off
- Directors dispute
- Upcoming business challenges mean it’s prudent to close it
Involuntary 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.
What Happens if Companies House Strike off my Company?
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.
Can you Strike off a Company with Debts?
As mentioned above, the key thing with 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.
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.
If you’re considering strike off, ensure your situation meets the following criteria:
- You haven’t traded, or sold company stock within 3 months
- 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
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.