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Companies House resume compulsory strike off process

Following Companies House’s decision in April this year to temporarily suspend compulsory strike off action in response to coronavirus (COVID-19), Companies House have recently confirmed it intends to lift this suspension from 10 October 2020.

Therefore from this date, Companies House will resume the process to remove a company from the register if there’s reasonable cause to believe it is no longer carrying on business or in operation. 

 

What action should directors take now?

If you are a director of a company registered at Companies House, and intend to keep the company running and in existence, it is important to: 

  1. review and diarise the upcoming dates for filing the company’s latest Confirmation Statement and annual Accounts, to ensure these deadlines are met; and

  2. respond to any correspondence received from Companies House (where required).  

 

Summary of Compulsory Strike Off Process

Companies House will send the company two letters announcing its intention to strike off the company from the register of companies, 14 days apart, if it has reasonable cause to believe the company is no longer carrying on business or in operation.

If no reply is received to either letter, Companies House will then proceed with publishing a notice in the Gazette with a view to striking the company’s name off the register of companies. The notice will state that at the expiry of two months from the date of the Gazette notice the name of the company will, unless cause is shown to the contrary, be struck off the register and the company dissolved. A copy of this notice will be placed on the company’s record at Companies House.

After the two months has expired, the register may strike off the company’s name, unless the company demonstrates why it should not be struck off before then. The registrar will then publish a further notice in the Gazette, stating that the company’s name has been struck off the register, and the company will be dissolved upon publication of that notice.

 

Consequences of Compulsory Strike Off

Some of the consequences of this type of action for a trading company include (but are not limited to):

  1. any assets that are owned by the company, such as cash, stock or property becoming property of the Crown;

  2. directors potentially being disqualified from being appointed as a director of other companies in the future;

  3. contracts with future suppliers and/or customers being at risk;

  4. difficulties obtaining credit in the future, as banks or other third party lenders may not be as willing to lend to a company that has gone through this procedure; and

  5. incurring time and costs in applying for the company to be restored to the register of companies. 

 

How can Glanvilles help?

If you require further assistance or advice on any of the above, including if you would like to voluntarily strike off your limited company the correct way under the Companies Act 2006, please do not hesitate to contact Scott Richardson on 01329 227907 or by email on scott.richardson@glanvilles.co.uk.