Companies House Compulsory Strike Off

Companies house  Compulsory strike off. Author: John A Waller, Consultant. Reviewed July 13th, 2024.

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What is a compulsory strike off?

A limited company may apply to have the company voluntarily struck off, requiring its directors to initiate the process.

The company is struck off the Companies House register and formally dissolved.

Such a process is used when directors wish to close a solvent company without wanting to sell it normally when retirement looms.

In comparison, the company may be forced to close through a compulsory strike off.

Section 1000 of the Companies Act 2006 dictates such a process. The primary focus relates to the registrar at companies house having reasonable cause

to commence such action. Once actioned, the company no longer remain a legal entity.

Why Would a Limited Company be Struck Off?

Why would a company be forcibly removed from the Register via a strike-off notice?

In a process known as the compulsory strike-off, a third party may apply to remove a company from the Register at companies house.

Prompted typically due to no compliance issues by the company.

Non-compliance issues include:

  • Failing to file your annual confirmation statement;
  • Notifying Company House about a change to your official registered office address;
  • Failure to file the company’s annual accounts on time.

What are the consequences once a company has been Compulsory Struck Off?

What happens to the assets 

When you dissolve your limited company, all remaining company assets (including bank balances) pass to the Crown.

It is important to remember that an overdrawn director loan account is an asset of the company. Directors must inform HMRC how they will be repaid and not hide behind dissolving a company with HMRC—directors who do so face penalties.

What Does Dissolved via compulsory strike off mean?

A company dissolved via compulsory strike-off is a limited company removed from the Register at Companies House, as described above.

What happens to directors when a company is struck off?

The consequences for directors if a limited company is struck off the Register can be significant.
Having your company dissolve forcibly via a compulsory strike off puts directors in a significant negative experience. Not following the law could lead to financial penalties or personal legal repercussions, like being sued.

Any assets or accounts sold must be distributed to unpaid creditors. If a balance remains after the full payment of creditors, it covers the expenses of such action, such as the bankruptcy trustee. However, what if your company’s assets or accounts do not cover the debt? In such a scenario, company directors can personally be liable for the debt. This means that in such a situation, it would be the responsibility of the company directors to either pay for the damages out of their own pockets or sell personal assets to raise enough money. It is not uncommon for company directors to sign personal guarantees to secure loans.
There can be significant financial and personal consequences. If a company is forced into a compulsory strike-off, the initiator can apply to the High Court for an investigation.
Depending on the outcome of the investigation, this could lead to substantial legal penalties for the directors, further underscoring potential risks and losses.

Fraudulent action by Directors.

Suppose the investigation concludes that a director engaged in fraud while in office. In that case, it can force them to become liable for company debts, investigation costs, and legal fees. This means the company director remains unprotected and potentially exposed to personal liability and damages. If this is not adhered to, fines and a five-year custodial sentence remain at risk.

Penalties can involve directors responsible for bookkeeping. Suppose mismanagement of the company accounts took place. Then, if the company directors:

The courts could order the company’s director to take personal responsibility for the debt. In addition, company directors face disqualification from acting as company directors or taking part in the management of another company. The time a former director remains disqualified depends on the severity of the mismanagement.

However, it can be up to 15 years.

If directors leave their company without paying their debts, they face the above penalties if a creditor appeals, further prompting an investigation.

Apply to strike off and dissolve a company

Used to close a public limited company, a private limited company, or a limited liability partnership (LLP) in the UK.

More than half of companies with multiple directors must sign the application before it can be submitted.

If you wish to dissolve your company online, you’ll need:

  • to sign in to or create a Companies House account, which is different from a WebFiling account
  • the company number
  • the company authentication code
  • an email address for each person signing the application
  • pay £33 using a credit or debit card or a Companies House account

Do many people think it’s a liquidation?

Liquidation differs from the dissolution of a company. Therefore, striking a company off the Register remains a way to dissolve a solvent, no longer a trading company. However, the company must not have changed its name, sold the property, or sold any rights in the last three months.

If your company is no longer trading as you want to retire or have a subsidiary, you want to gain value from assets to open a new business, possibly the way forward.

What If You Want Your Company To Remain?

Do not commence the process if you wish your company to remain live.

Meaning of “Struck Off”

The process to remove a limited company from the Register means the company has been “struck” from companies house register. Therefore, it no longer exists legally, so it may not:

  • trade,
  • sell assets belonging to the company,
  • bank those who owed you money,
  • make payments.
  • Close bank accounts.

Applying voluntarily to strike your company off is a cost-effective way to close a company that no longer continues trading, no tax liabilities and no other debts.

After your company is struck off

Losing access to company bank accounts means you won’t be able to send or receive money. You’ll have to restore the company to gain control of your company’s bank accounts.

How do you Strike a Company Of the Companies House Register?

The striking off procedure to strike a company requires you to complete and submit a DS01 form.

How do I obtain a form DS01 to apply to strike off the company?

Complete the form online or download the document. Get started here to commence a voluntary striking off.

You’ll need to include the following:

  • Company number;
  • Company name;
  • Signature(s) of the company’s officers authorising the strike off.

Most directors should sign the application. If there are two directors, both should sign. REMEMBER: Directors remain liable for claims against the former company, as no formal liquidation has occurred.

If you feel you need assistance? Contact HBG ADVISORY in total confidentiality.

Send a copy to all interested parties within seven days of forwarding the DS01.

Ensure the following receive a copy:

  • Shareholders;
  • Creditors;
  • Employees. Therefore, distributing the company’s assets requires completing the DS01 form before submitting it.

Strike Off Company paper application.

Failure to submit any of the following documents delays the procedure.

So ensure you enclose a cheque for £44. Additionally, ensure you prepare the company for striking off before action. However, if you do not do this, you leave the company open to claims from creditors, employees and shareholders moving forward.

Where do I submit a DS01 form and a cheque?

Send the cheque and submit a DS01 form to

  • Companies House, Crown Way, Cardiff CF14 3UZ – for English and Welsh companies
  • Companies House, 4th Floor Edinburgh Quay 2, 139 Fountainbridge, Edinburgh EH3 9FF – for Scottish companies
  • Companies House, 2nd Floor the Linenhall, 32-38 Linenhall Street, Belfast BT2 8BG – for Northern Irish companies

Strike off process online.

You may strike off the company online.

You must pay £33. If you have two company directors, both must sign the Companies House DS01 form. Then, you must submit a DS01 form to Companies House within seven days and forward a DS01 copy to directors who did not sign it and all shareholders, employees, and creditors.

Listed below are the significant points required.

  • Before closing, ensure you have the approval of the directors and shareholders of the company, and therefore, note it in the company’s records. Usually done as a passing of an ordinary resolution. Ensure board directors sign a declaration of solvency once liabilities are paid;
  • Finish all outstanding work, ensuring all invoices are completed in preparation to collect payment so creditors are discharged in full;
  • Ensure all those who owed you money (debtors) remain collected and accounted for;
  • Value and sell the assets and any stock;
  • Have not traded or sold assets in last three months;
  • Advise the HMRC of your actions;
  • File accounts: Ensure a final set of annual accounts, a company tax return, and any letters advising the situation of shareholders and directors. If the same, one letter will only be needed;
  • Annual confirmation statement;
  • Outstanding PAYE, NI, Corporation Tax and other tax liabilities require payment to HMRC. Also, ensure you deregister for VAT;
  • The Striking Off will be published in the Gazette.

Companies House Striking Off & Staff.

  • Make sure employees receive their final wages and salaries together with P45s before requesting HMRC to close the company’s payroll scheme;
  • Contact Companies House and send the DS01 form with a £ 10.00 filing fee. Make sure that all directors or a majority sign the DS01 form. 

Moreover, please send a copy of Companies House DS01 forms to all interested parties by recorded delivery within seven days of sending it to Companies House. Examples:

  • Directors who did not sign the companies house DS01 form initially;
  • Employees of the company;
  • Shareholders;
  • Managers or trustees of any pension fund operated;
  • Creditors of the company;
  • It is necessary to send the signed Ordinary Resolution and Declaration of Solvency to Companies House within 15 days of the board meeting;
  • Ensure you deal with all loose ends.

So, for help using your former name, please read “Use of Company Names after Liquidation.”

What do I need to keep?

Business documents of the limited company struck off remain stored safely for seven years. Ensure the employers’ liability policy and schedule require safekeeping for 40 years.

What happens if a company is struck off?

Once you receive a first gazette notice for compulsory strike-off and then struck off or dissolved, it remains removed from the Register.

Any cash or company assets were transferred to the Crown at that time. To get these assets back, you require a company restoration.

Two routes apply:

  • Restoration by Court Order;
  • Administrative Restoration (if eligible).

Once struck off the Register, the company is no longer legally able to trade, as the limited company ceased to exist on the date of dissolution.

You may face onerous legal consequences if you trade in the company’s name before being struck off.

Make sure you understand the meaning of the first gazette notice for compulsory strike off.

The name of a struck-off or dissolved company stays available in the new company incorporation. If you are required to restore a struck-off or dissolved company to public records, you may be required to alter the business’s name. You must ensure no other entity now uses the name of the struck-off or dissolved company.

Releasing any struck-off company assets (held as “bona vacantia”) requires applying to the Treasury solicitor, and the Registrar of Companies must apply within sections 1024 – 1029 of the Companies Act 2006. It would help if you reinstated or struck off a dissolved company using a company restoration.

Enforcement Action to Strike a Company Off.

Companies House will recommend compulsory strike-off.

If you receive no objections to dissolution within two months from the publication of the Gazette notice, your company will be struck off.

Is it possible to restore a Company to the Register once struck off?

Yes. Though it may be difficult in some cases, a court application may be required, and costs remain high.

Can I incorporate another company using the same name, and how quickly?

Again, yes.

Therefore, you must wait for the company’s house to complete its job.

What happens to directors when a company is struck off?

If a company is struck off the Register at Companies House? It exposes company directors to potentially being held responsible for any debt outstanding once the company’s assets have been sold and distributed.

In addition to financial consequences, the person who initiated the striking-off may apply to the courts to investigate how the struck-off company was operating, raising the risk that the directors will face penalties if found guilty of fraud or misfeasance.

Directors must understand the overall consequences of a strike off notice.

Can a creditor submit an objection?

Yes. Read on about whether you can close a limited company with debt.

Why does HMRC object to the striking off of a company?
Usually, this is due to not finalising tax affairs with HMRC.

Can I use a Company Strike Off for an Insolvent Company?

Possibly! Though wise to explore insolvency options. Arrange a meeting with a Licensed Insolvency Practitioner to explore this further.

If the insolvent company has no assets, financing a liquidation with a Company Strike Off notice may be possible. However, you still have legal obligations to stop you from potentially being held liable for the outstanding debts.

Once struck off the Register, your company is no longer a legal entity.

Can you dissolve a Company with a bounce back loan?

No.

You need to consult a licensed insolvency practitioner and liquidate.

Other options to close your company

Striking off a company is appropriate for a solvent company with unencumbered assets and realisable equity. However, directors must understand their company no longer exists as a legal entity. It is usually appropriate for directors who do not want to sell the business. However, if the aforementioned does not apply, then other options remain available.

Can you close a limited company with debt?

Yes, you can close a limited company with debt, though you need a licensed Insolvency Practitioner.

My company has a BBL that cannot be repaid. Can I liquidate a company with an unpaid bounce-back loan?

Yes. You remain not personally liable in liquidation, provided you conformed with the conditions applicable when you applied.

For further help on how to close down an insolvent limited company, please contact John Waller at:

FREEPHONE 0808 280 3497 or book a VIRTUAL meeting safe and private in the privacy of your home or place of work.

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