A notice of compulsory strike off means the company is removed from the Companies House Register and so no longer exists. It happens when the company has failed to comply with the rules, such as filing accounts.
Why would a company compulsorily be struck off?
There are various reasons.
It can be voluntary if directors decide they no longer have a use for the company:
- They want to close the business down and move to another venture
- Directors reach retirement
- They have no one to pass the company down to
Note, a DS01 form must be completed for this type of strike off.
The other option is a compulsory striking off, issued by a third-party petitioning – most usually the third-party is Companies House. Reasons for the need to strike off often are:
- Failing to conform to legal requirements
- Failure to submit timely accounts
- Failure to submit an annual confirmation statement
- The company ceasing trading
- No directors being appointed
Can I stop a compulsory striking off notice?
To avoid a company striking off notice you must be sure to respond actively to Companies House RE any issue they have found with your business. Top tip – bring paperwork and all files up to date.
Provide any necessary proof of trade, any changes to business details. Just keep Companies House up to date to keep them happy and avoid any unwanted notices.
What is the process for a compulsory strike off?
There must be rational grounds for Companies House wanting to initiate a compulsory strike off. Formal warning letters (at least two) should be sent to the company, outlining the issues and potential of a strike off. If there is no change or action based on these warnings, an initial request to strike the company off, is placed in the Gazette. This leaves a two-month period for any other person to object the application.
If you do not respond to the strike off issued then Companies House can strike your business off the register.
What are my options following a request to strike off?
This all depends on your plans going forward, for the company.
If you are happy for the company to cease trading, the option is simple – let the process run on, so long you have no debts or liabilities outstanding, all assets have been realised and the company has ceased trading. The company will formally close and be removed from the official register. If you want to continue to trade then you will need to try and suspend the strike off and ultimately have it discontinued.
What does compulsory strike off suspended mean?
Who can submit an objection?
- You (directors)
- Your Shareholders
- Outstanding Creditors (HMRC included) – Creditors ultimately want to object and suspend the application as if the strike off is successful, and the company is removed from the company register, they will be unable to recover any money they were owed, thus they are left with a bad debt.
Companies House will “suspend” the strike off whilst they investigate and liaise with the applicant – you have 2 months to appeal the strike off and apply for it to be discontinued.
If you intend for the company to remain trading and ultimately dispute the strike off, an application to suspend the request should be filed to Companies House. You will need to show you can continue to trade. Issues such as filing of missing accounts, proof of trade and any relevant statements may be required. If there is legitimate proof of company viability, then the strike off is likely to be suspended.
What does compulsory strike off discontinued mean?
If the strike off notice by Companies House is discontinued, it means that your company can continue to trade. This usually happens if you have responded to the requests made by Companies House or paid claims made by creditors.
Assets remaining?
Following dissolution, any leftover assets and cash is referred to as ‘bona vacantia’, with the Crown taking automatic possession. Usually, the Bona Vacantia Division (BVD) will either disclaim or sell Bona Vacantia for full market value. The BVD is unlikely to sell privately to anyone.
If you want our digital dissolution pack that has word template letters/forms and a 25 page guide which takes you through the whole process then you can request an invoice from robertm@ksagroup.co.uk
Professionals like us, at Company Rescue, can assist you with this. Contact us today.
