What does it mean when a company is struck off?
Voluntary strike-off
The voluntary strike-off process is started by directors when their company has served its useful purpose and is no longer needed. The process is only suitable for solvent businesses, however.
In this instance, the first Gazette notice informs creditors and other stakeholders that the strike-off is pending so they can appeal against it and potentially recover their debts if monies are owed to them.
Compulsory strike-off
Compulsory strike-off results in the same outcome – the company closes down, but the procedure is started by Companies House, typically when a company fails to meet its legal obligations around filing and submission of accounts and other documents.
Again, if a creditor has outstanding debts to recover or legal claims to make against the company, they can challenge the strike-off by appealing to Companies House within three months.
Purpose of the first Gazette notice
The first Gazette notice informs creditors of the company, including banks, HMRC, and trade suppliers, that it’s going to be removed from the Companies House register if there are no objections.
Stakeholders can appeal against the strike-off if they’re owed a debt by the business and need to recover their money. Although, in some cases, a company can be restored to the register after a strike-off, objecting to the action before it’s taken is a simpler way to proceed.
Don’t Fall Foul of Unqualified AdviceWhat to do if your company is under threat of compulsory strike-off
Companies House will let you know that they intend to strike off your company before the first Gazette notice is placed. This means you have time to prevent your business from being forcibly closed down.
Appeal against the strike-off
You’ll need to apply to Companies House to suspend the strike-off and remedy the issue(s) that caused their action. This might involve bringing your accounts up-to-date, for example, or submitting missing Confirmation Statements so you comply with your company’s statutory obligations.
Deal with company assets
If assets under company ownership aren’t dealt with before the company is struck from the register, they become the property of the Crown under the law of ‘bona vacantia.’ This means that you need to transfer ownership away from the company or sell the assets and withdraw all of the cash from your business bank account.
A significant asset holding or high-value asset ownership may indicate that Members’ Voluntary Liquidation (MVL) is appropriate if you do want to close the company, as it offers significant tax benefits for directors and shareholders.
If you’ve received a first Gazette notice for company strike-off and would like more information on what to do next, please get in touch with one of the team. Company Closure are specialists in this area and operate offices throughout the country.
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