What is a Compulsory Strike Off and How Can I Stop it?

Compulsory strike off explained

A compulsory strike off (also known as a dissolution) is when the legal existence of a company is removed from the Companies House register. A compulsory strike off occurs when a company has failed to file its accounts or confirmation statements for a period and Companies House acts to remove the company from the register assuming it is no longer being used.

It can be used to dissolve companies, or wind up insolvent companies. If you are in charge of a company that needs to be struck off and volunteer to do so, you need to send in a DS01 form, otherwise your directors may not have any authority over your business after this date.

Companies House will write to the company directors to inform them that the company will be struck off.

How to stop a compulsory strike off

You can stop a compulsory strike off from going ahead by:

1. Replying to Companies House without delay, confirming that the company is still active and trading. Also, tell them of the steps being taken to submit the confirmation statement and/or annual accounts. If you need extra time ask Companies House for an extension.
2. Make sure that the annual accounts and confirmation statement (CS01) are submitted to Companies House without delay.

Voluntary strike off explained

If you choose to voluntarily strike off your company you need to submit a DS01 form.

DS01 form

NOTE: To use the strike off procedure using the DS01 form the company must not have done any of the following for at least three months:

– Traded (or otherwise carried on in business)
– Sold any property or rights owned by the business which is previously sold while trading.
Changed its name
– Engaged in any activities other those required to dissolve the company, conclude its affairs or comply with a legal requirement. This allows a company to have sought (and paid) for professional advice in relation to dissolving the company.
– If the business did carry out any of the above then it would have to wait the 3 months before being able to use the strike off process.

How do I get a DS01 form?

You can complete the form online at companies house or download the form from their website.

Thankfully, the form is straightforward to complete. You’ll need to include:

• The company number
• The company name; and
• The signature(s) of the company’s officers authorising the strike off

The form should be signed by a majority of the directors. If there are 2 directors both should sign.

What must you do before starting a company strike off?

You cannot start a new company until at least 6 months after the last day of trading for the old one. The reason being if there was fraud involved then you will face charges under the Fraud Act 2006. This means no bank accounts opened, no contracts signed etc. So make sure all these things happen first.

How long does it take to get my company’s status back on the registers once they’ve been struck off?

This depends on how many times you have tried to re-register with the registrar. Each time costs £10 plus VAT. Once you have paid that amount you should receive an email saying “Your application has now been accepted”. However some companies seem to run into problems even though their applications were successful.

If you still don’t hear anything within 2 weeks contact us again. We’ll see what we can find out about why your application hasn’t gone through yet.

Can a company be struck off whilst in liquidation?

Yes, but only if the liquidator has failed to file returns showing payment of creditors. The company may continue trading whilst in liquidation provided that it pays any outstanding debts. Any assets left unsold go to pay creditors. When the court orders a sale of the remaining assets the proceeds are distributed among the creditors according to priority order.

The liquidators’ duties include ensuring that money is available to meet liabilities; paying reasonable expenses incurred during administration; keeping proper records of the estate; filing annual reports; making payments due to employees; settling claims against the company; prosecuting actions against persons who owe money to the company; and giving notice to interested parties of any changes affecting them.

Thinking of striking off your company?

At Forbes Burton, our team of experts are here to help you through the strike off process.

If you feel this is the right direction for your business, take our Limited Company Strike Off Test today, and for further advice, feel free to get in touch where you can have a free consultation with one o four experts.