A compulsory strike off poses immense consequences for any business. It could mean your company being completely dissolved as a legal entity and barred from conducting any kind of trading activities. If you receive such a notice, our specialists can work with you to guide the way through this difficult time. This article defines strike off action meaning.
Table of Contents
- What does compulsory strike off mean?
- Companies House strike off process
- What are my options following a request to strike off
- What are the consequences of a compulsory strike off?
- I’ve received a compulsory strike off notice, how do I stop it?
- How Company Doctor can help with Compulsory Strike Off
What does compulsory strike off mean?
A compulsory strike off signifies that your company has been taken off of the Companies House register and officially shut down.
Dissolution is a common term for the discontinuation of a business, typically due to its inability to keep up with legal obligations or its closure.
Company directors may opt to shut down the company voluntarily if they have no other use for it, or a third party can force its closure by filing a compulsory strike off petition.
Why would a company be struck off?
When the company’s directors decide to dissolve their business, it is often because they wish to retire and have no one in the family who will carry on with the company or cannot find a buyer. So, instead of continuing operations that are not worth selling anymore, a company director may choose striking off as an exit strategy.
Companies House would dissolve a company if the following criteria are not met:
- Neglecting filing accounts in a timely manner.
- Neglecting to submit an annual confirmation statement.
- Neglecting to abide by legal regulations.
- This company lacks appointed directors.
- The company is no longer operational.
Companies House strike off process
Before Companies House takes any action to compulsorily strike off a company, they must be given reasonable notice by being sent two formal letters that explain the issues and warn them of imminent strike-off. It is also imperative for Companies House to have sufficient grounds to believe that the company isn’t in operation before proceedings can begin.
Strike Off Notice in the Gazette
If Companies House does not receive a response from the company after sending out two letters, they will publish their first strike off notice in the Gazette (Gazette notice). This notification alerts all relevant parties that this organization has only two months left before it is officially removed and no longer exists.
What are my options following a request to strike off
When deciding what to do following a request for striking off, you have two main options: shutting down your company or continuing operations.
If your company is accepting the strike off:
When the business is winding down and directors are looking to dissolve, if you make sure that:
- Have no outstanding debts;
- Have realised all of your assets;
- Have ceased trading;
If you are looking to officially close your company and have it removed from the companies house register, but still need to settle outstanding debts and sell assets, then Company Liquidation is the appropriate legal dissolution route for you. Our team of experts can provide assistance throughout this process so that all payments are settled and assets acquired before successfully closing down your business.
If your company is disputing the strike off:
If you deem the strike off to be inappropriate or untrue, then it is necessary for you to submit a suspension request right away to Companies House.
It may be necessary to address any of the following issues:
- Filing any missing accounts;
- Sending relevant statements;
- Demonstrate you remain trading.
Assuming that your company is valid and its closure would be unjustified, there is a possibility to challenge the strike off and either suspending or fully discontinuing it.
What are the consequences of a compulsory strike off?
If you don’t answer to the compulsory strike off, then Companies House has the authority to remove your business from their register even if it is still running.
This would mean that:
- Your company will no longer legally exist.
- After this point, you will have no option to challenge the strike off.
- You will be refused eligibility for financial aid.
- Directors may be subject to scrutiny and investigation for any infractions that led to the company’s dissolution.
If you are served with a compulsory strike off notice and find it to be inaccurate, then urgency is of the utmost importance. Acting quickly can help ensure that your business remains safe from dissolution or other unwanted action.
I’ve received a compulsory strike off notice, how do I stop it?
To keep your business from being stricken off, it’s crucial that you act swiftly and tackle any potential issues detected by Companies House. This mainly requires bringing all of the necessary files up to date and submitting them promptly to Companies House. Doing so will guarantee that your company continues its smooth operation.
To prove that your limited company is still active, you may need to provide evidence of its continued operations. Additionally, if you have changed locations and not updated the details on official documents yet, be prepared to offer a new address as well.
Ultimately, you must act quickly and reply clearly to Companies House in order for your company to remain functional.
Get in touch with our experts today for advice on how to appeal the notice if you decide to do so.
Can creditors object to a compulsory strike off?
By law, creditors such as HMRC may object to a compulsory strike off of the limited company if they are owed money and fear that their access to it would be blocked with the dissolution.
How Company Doctor can help with Compulsory Strike Off
At Company Doctor, we specialize in liquidation and dissolution services for your insolvent company. We have our own in-house licensed insolvency practitioner If a business is ready to shut down its operations and file for closure, then our team of experts can help them manage their company’s assets and debts with ease so that they can leave the company without any worries. We make sure that every step of this process goes as smoothly as possible—allowing you to move on from your company peacefully with no liabilities outstanding.
Contact us at 0800 169 1536 or leave an enquiry on our website and our team will get back to you.