What is a Compulsory Strike Off & Can I Stop it?

What does compulsory strike off mean?

A compulsory strike off means that your company has been removed from the official register at Companies House and formally closed. It’s sometimes referred to as dissolution and tends to be issued on the grounds that the company in question is no longer trading or has failed to conform to legal requirements.

A strike off can be voluntary, put forward by Directors who have no other use for the company and want it to close, or compulsory, put forward by a third party petitioning for your company’s closure.

Why would a company be struck off?

If directors are choosing to dissolve their company, it is usually due to them wanting to close the business down and move on into retirement, not having anyone to pass the company on to or realising that it isn’t worth selling.

A company would be forcibly struck off by Companies House due to:

Failure to submit timely accounts
Failure to submit an annual confirmation statement
Failure to conform to legal requirements
The company having no appointed directors
The company having ceased trading

Companies House strike off process

In all cases of compulsory strike off, the company in question will be sent at least two formal letters warning them of imminent strike off and detailing the issues they have. Companies House does have to have reasonable grounds to believe that the company isn’t trading and should be struck off, before taking action.

Strike Off Notice in the Gazette

If Companies House fails to get a response from the company after sending two letters, they will publish their first strike off notice in the Gazette. This notice declares that the company has two months before it is struck off and ceases to exist as an official company.

What are my options following a request to strike off

The options you have following a request to strike off are based on 2 main factors – whether you want your company to close or you wish to remain trading.

If your company is accepting the strike off:

In certain cases, the company may be coming to a natural end and directors are happy for the company to be struck off. In this case, so long as you:

Have no outstanding debts;
Have realised all of your assets;
Have ceased trading;

You can let the company be formally closed and removed from the official register.

If you want to accept the strike off and close your company but have outstanding debts and/or assets, you’ll need to follow the legal dissolution route of Company Liquidation. Our experts can help guide you through this process, allowing you to settle debts, realise assets and successfully close your business.

If your company is disputing the strike off:

If you believe that the strike off is unjust or details are incorrect, you will need to send off a suspension application directly to Companies House. You may have to rectify any issues, such as:

Filing missing accounts;
Sending off relevant statements;
Proving that you are currently trading.

So long as you can prove that your company is viable and shouldn’t be struck off, there is a chance that you can have the strike off suspended or fully discontinued.

What are the consequences of a compulsory strike off?

If you don’t respond to a compulsory strike off, Companies House can strike your business off the register even if you’re still actively trading. This would mean that:

Your company ceases to legally exist
You will no longer be able to dispute the strike off
You will be denied access to financial support
Directors may face investigation into potential misconduct that led to the strike off

It is hugely important that you act fast if you are served with a compulsory strike off notice and believe it to be incorrect.

I’ve received a compulsory strike off notice, how do I stop it?

If you want to stop your company from being struck off, you’ll need to ensure that you respond to any issues that Companies House have found with your business. This mainly includes bringing paperwork up to date and filing them with Companies House.

You may also have to prove that your company is still trading, or provide a new business address if you have moved and not updated your details in official records.

In any case, you need to act fast and respond clearly to Companies House to ensure that your company can continue to trade.

Get in touch with our experts today for support on what to do if you wish to appeal the notice.

Can creditors object to a compulsory strike off?

Company creditors, including HMRC, can apply to object to a compulsory strike off, and often do. This is due to the fact that they are owed money and will not have access to this if the company is struck off.

How The Insolvency Experts can help with Compulsory Strike Off

At The Insolvency Experts, we handle varying cases of liquidation and company dissolution. If a company is willing to close down and accept a strike off notice, we can assist with ensuring that assets and debts are dealt with, providing business owners with the ability to close down and walk away from their company with ease.

We can also offer assistance should you wish to appeal a compulsory strike off notice, so get in touch to find out what your next steps are and how we can help your business to stay viable.

FAQs

What is the difference between compulsory strike off and voluntary strike off?

If a company wants to be struck off, they can choose to apply for a voluntary strike off notice to be issued. Being voluntarily struck off is a far less costly way of closing a company than Liquidation and doesn’t require you to appoint an Insolvency Practitioner.

Compulsory strike off is issued by Companies House and, unless it is successfully appealed, company closure must go ahead.

What does compulsory strike off suspended mean?

If your company strike off has been suspended, it is usually because your business has outstanding debts to creditors who stand to lose what they are owed should the company be dissolved.

Companies House will suspend the strike off whilst they investigate – during this time, you have 2 months to appeal the strike off and apply for it to be discontinued.

What does compulsory strike off discontinued mean?

If the compulsory strike off issued to your company is discontinued, it means that the strike off is no longer happening and your company can continue to trade. This usually means that you have responded appropriately to the requests or claims made by Companies House.