Company Strike Off Suspended

Company strike off suspended, written by John A Waller. Director.Reviewed May 28th, 2024.

It can be unnerving to receive a notice from the Gazette for a compulsory strike. When companies are struggling, deadlines can be missed and reports filed late or wrongly. A compulsory strike-off notice therefore means the company has failed to comply with specific legal requirements and could be due to a genuine mistake.

If your company faces insolvency and gets a Gazette notice, it can be worrying. Here we look at what the notice means, how the process works and how HBG Advisory helps business directors.

Company Strike Off Suspended – What is compulsory Strike-Off

Companies House registers and dissolves limited companies registered in England & Wales. Company directors typically dissolve a company, but cases exist where it remains obligatory, usually after an application to strike off a company by Companies House. The application however, requires a Gazette notice for compulsory strike-off.

If a company does not comply with Companies House regulations, as set out in the Companies Act 2006, this can then lead to the company’s forced closure.

A company risks dissolution shouls it fail to file annual accounts within 9 months of its financial year-end. Reasons however may include not paying penalties for late filing or not declaring a new company address. Suppose Companies House remains unsuccessful in chasing a company for overdue submissions. Therefore, they will likely assume the business remains no longer required. The process of dissolving the company will begin with a Gazette notice.

What is a “Gazette notice”?

The Gazette notice warns the company of strike off if they do not take action. If unchallenged, the company therefore automatically dissolves and then removes from the register at companies house.

The Gazette provides a weekly public journal in which statutory notices must be advertised, as required by law. The only people allowed to place a notice remain those acting officially, including:

  • Licensed Insolvency Practitioner.
  • Registrar at Companies House.

The notice is always issued, along with a formal letter sent to the company’s registered office. Any party interested in the proposed striking-off can object for two months after the date. If the company does not receive any objections, the company’s dissolution commences. If a company does not renew its domain name, it will lose the name, and anyone can register it.

Meaning of compulsory strike off for my company?

The outcomes of a Gazette notice concerning your company can depend on how healthy your company’s finances stand and your plans for the company’s future. Consider dissolving your business, allowing the process to continue, and your company struck off the register.

The limited liability status of a company means that the company’s debts remain separate from the personal obligations of its shareholders, and that the company’s assets remain distinct from the personal assets of its owners. When the company dissolves, all remaining company assets will go to the Crown via Bona Vacantia.

Employees who leave after the company has ceased to be active will automatically be made redundant. Therefore, they will not be able to claim any redundancy payments from the Redundancy Payments Service. Employees who want to claim to the Redundancy Payments Service must do so when the company is in an insolvency process, such as liquidation.

HM Revenue & Customs will likely object to the strike-off application if a company has outstanding tax liabilities. The striking off process remains suspended if Companies House accepts the objection.

The moment you receive notice from the Gazette that your company remains still trading, then importantly take quick and decisive action. Once the Gazette notice is advertised, the company’s banking facilities may be frozen, making it challenging to continue trading and pay any debts owed.

Even if you don’t do anything to stop it, if a notice of strike-off remains unchallenged, enforcement of dissolution takes place, and your company will shut down, even if trading.

If a company continues to trade after its dissolution, the individuals running it do so without legal identity and remain unprotected from being held liable for the company’s debts.

Can I object to a compulsory strike off?

If you want to continue to trade, you can, and you can do so for up to two months after the first Gazette notice. The right to object remains not just limited to directors – anyone interested in a stake in the company can apply for a suspension, including shareholders and creditors.

The outstanding documents must be filed with Companies House without delay if you object as a company director.

Once a suspension application takes place, Companies House writes to the company to inform them that they have discontinued the strike off action and the company remains no longer at risk of being struck off the register.

Can my company be struck off during the COVID-19 pandemic?

During the COVID-19 pandemic, UK companies reported a decrease in turnover. However, the UK Government suspended compulsory strike-offs to reduce the burden on struggling businesses. However, Companies House has resumed the compulsory strike-off process for companies they however, believe are no longer in operation. So therefore important than ever to ensure your company’s filings remain up to date.

The voluntary strike-off took place in March 2020 due to the coronavirus outbreak. However, reinstated on 10 September 2020.

How can I apply for a voluntary strike off?

Suppose a company has met the Companies Act 2006 requirements, and the directors wish to dissolve the company. In that case, they can apply to have the company struck off the register by submitting the form DS01 and pay the £10 fee to Companies House.

If the directors of a company do not adhere to the statutory process set out in the Companies Act 2006, they risk prosecution.

The voluntary strike-off process remains generally a cost-effective way to dissolve a company, but there exist some exceptions where it might not be the best option. For example, before applying, the company must have stopped trading for at least three months and cannot have changed its name since then.

If the directors plan to dissolve a company with net assets above £25,000, then a Members’ Voluntary Liquidation (“MVL”) is an option for company dissolution. An MVL is a process used to wind up a company without debt. Some advantages to this legal process include tax savings and the ability to commence proceedings without waiting the mandatory three months after trading ceases. The shareholders, appoint a licensed Insolvency Practitioner to wind-up formally, the company’s affairs. The Liquidator’s primary role is to realise all company assets, settle outstanding liabilities, and distribute any remaining capital to shareholders. As soon as the liquidation process is complete, the company remains legally dissolved and no longer exists.

If you require further assistance regarding the differences between voluntary strike off and MVL, please refer to our service pages. If you opt for this approach, our licensed insolvency practitioner will help you with every aspect of the process and ensure that all company matters remain resolved and taken care of.

Help at hand from HBG Advisory

If your limited company is struggling, ins particular attempting to dissolving a company with a bounce back loan or if you feel your business has served its purpose, HBG Advisory provides a free initial consultation. During this consultation, we will review all the options available and help you decide the best way forward. Contact John Waller for a free, confidential consultation at 0800 612 5448

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