If you’ve received a letter informing you of impending strike off action, you will need to act promptly.
Read our full guide to this term below, exploring its meaning, implications and what to do about it.
Compulsory Strike Off: Definition
A company can be registered in a few minutes, but closing it is more complicated. When a company is removed from the register at Companies House it is called ‘striking it off’. In certain circumstances, Companies House take it upon themselves to do this on your behalf, usually where you have no conformed to their legal requirements in some manner, such as filing annual accounts.
In these instances, they may send you a letter informing you of an impending compulsory strike off. These should be taken seriously.
Why Would a Company be Struck Off?
The common reasons for a compulsory strike off notice are that some form of due protocol, expected by Companies House, has not been followed.
This is covered in Section 1000 Companies Act 2006.
The reasons include:
- If they have ‘reason to believe’ you’re not longer in business
- If your company has no appointed directors
- If they’re not receiving any response to their correspondence with you
- If the company is being liquidated but no insolvency practitioner has been appointed
- Not Filing Annual Accounts
- Not Filing Annual Statements
Have you Received a First Gazette Notice for Compulsory Strike Off?
For many companies, the first they hear of this term is when receiving a letter announcing that in 3 months your company will be struck off and cease to exist.
The law requires that actions such as this are advertised in the London Gazette, the official journal of public record. When the Gazette was founded in 1665 these notices were literally tacked upon a board for people to read, hence why these are called ‘notices.’
Today the ‘First Notice’ means it will be advertised on the Gazette website. Not only does this mean that the information is now in the public realm, it also a strong warning from Companies House that your affairs are not in order and you need to take action.
What Process do Companies House use for Strike Off?
Companies House will send you two letters announcing their intention, 14 days part.
If no reply is received to the second letter they will then proceed with the advertisement in the Gazette.
From the advertisement you have a minimum of 2 months until a second advertisement will announce the company is being formally struck off.
You should expect it to take around 4 months from the time you receive the letter from Companies House.
After the final warning letter is published in the Gazette, you will have a 2 month timeframe to save your company.
How do I Stop It?
This depends on whether you wish to keep the company going or not.
If you do, then you need to bring the paperwork up to date as per the correspondence you’ve received and all will be well.
If you do wish to close the company down (and you have no debts) then you can simply let the process unfold and it will be formally dissolved.
If your company has debts this makes you ineligible and you are better off following due protocol and either settling the debts first or, if appropriate, liquidating the company with the help of an insolvency practitioner such as ourselves.
Object to a Limited Company Being Struck Off
If you feel the strike off notice has been in error, you can email Companies House:
If you want to write to them by post:
Companies House England and Wales
Registrar of Companies for England and Wales
Companies House Northern Ireland
Registrar of Companies for Northern Ireland
32-38 Linenhall Street
Companies House Scotland
Registrar of Companies for Scotland
Edinburgh Quay 2
Telephone: 0303 1234 500
Textphone: 029 2022 6788
Welsh language: 029 2038 0065
Monday to Friday, 8:30am to 6pm
Consequences of Compulsory Strike Off
Consequences for Directors – Compulsory strike off could result in directors being disqualified for up to 15 years if it’s found that they failed to act according to the law. Submitting confirmation statements and annual accounts is a legal requirement. To quote Companies House ‘ If you don’t do this, there could be serious consequences.’
Company Assets – Compulsory strike off could result in assets, which includes money in the bank account, beoming Crown Property.
Personal Liability – Where a company continues to trade despite a compulsory strike off, directors would forfeit the limited liability structure of the company and hence hold themselves personally liable for any incurred debts.
Damage to Company Reputation – Compulsory strike off, which is publically advertised in the Gazette, could result in damage to the professional reputation of the business.