The information provided in this guidance is aimed at the most common circumstances for strike off, dissolution and restoration of a limited company. It is not drafted with unusual or complex circumstances in mind. If you are in any doubt about your responsibilities, you should consider seeking professional advice.
A company can apply to the registrar to be dissolved and this usually occurs when:
This procedure is not an alternative to formal insolvency proceedings where these are appropriate. Even if the company is struck off and dissolved, creditors and others could apply for the company to be restored to the register at a point in the future.
An application for voluntary striking off can only be made on the company’s behalf by its directors acting unanimously or a majority of them. There are certain conditions that the company must meet to be able to undertake the process:
A company cannot make an application if it is subject to any insolvency proceedings such as liquidation, including where a petition has been presented but has not yet been dealt with or it has entered into a Scheme of Arrangement as set out in the Companies Act 2006.
Furthermore, a company cannot apply to be struck off the register if it has bearer shares in issue. Bearer shares are where a warrant has been issued in respect of shares and there is no registered shareholder in the register of members. You can find further circumstances in which you cannot make an application in sections 1004 & 1005 of the Companies Act 2006. It is an offence if a director is in breach of these restrictions with the penalty being either a fine or a conviction.
There are safeguards for those who are likely to be affected by a company’s dissolution. If your company has outstanding creditors or employees, you should inform these people before applying. This is because anyone who is owed money by the company has the right to object to the company being struck off. It is therefore recommended that you should deal with any loose ends, such as closing the company’s bank account or the transfer of any domain names before the application is made.
You may notify any other organisation or party who may have an interest in the company’s affairs, otherwise they might later object to the application. For example, HMRC, local authorities (especially if the company has any obligation involving planning permission or health and safety issues), training and enterprise councils and government agencies.
If you are a director you should not resign before applying for strike off as you must be a director at the time the Registrar receives the application.
Simply complete Form DS01 – Striking off application by a company. This form must be signed and dated by all directors, or the majority of directors, if there are more than two.
The directors who make the application must, within 7 days of sending the application to the registrar, send a copy to:
The company’s directors must also send a copy of the application to any person who, at any time after the application has been made, becomes a:
This must be done within 7 days of the person becoming one of these. This obligation continues until the dissolution of the company or the withdrawal of the application. The directors will be committing an offence by not sending the notice to the relevant parties, and could face a fine or, in the most serious cases, a maximum of a 7-year prison sentence.
You can post a copy of the completed application to the last known address (if an individual) or the principal / registered office (if a company or other legal entity). Additionally, you can also fulfil your obligations by delivering a copy in person. Usually the directors will serve the application on the creditors’ regular place of business with which the company has had dealings in relation to the current debts, for example the branch from where goods were ordered from. It is advisable to keep proof of delivery or posting.
Subject to the forms being completed properly, Companies House will:
If there is no reason to delay, the registrar will strike the company off the register not less than 2 months after the date of the notice. The company will be dissolved on publication of another notice in the relevant Gazette.
The Gazettes (there are three of them – London, Edinburgh and Belfast) are the official newspaper record in the United Kingdom. When the registrar publishes a notice to strike off or restore a company, the notice will appear in the relevant Gazette depending upon which part of the United Kingdom the company was formed. The gazettes are published weekly and also published online.
If the company changes its mind and no longer wants to be struck off, or if the company becomes ineligible for strike off, the directors must ensure the application is withdrawn immediately by completing the relevant form.
A company must withdraw their application to strike off immediately if it:
Any director may file the application to withdraw the strike off action. Section 1009 of the Companies Act 2006 contains the full circumstances that mean you must withdraw an application for strike off. There are offences associated with failure to withdraw an application.
It is an offence:
The offences attract a potentially unlimited fine. If the directors breach the requirements to give a copy of the application to relevant parties and do so with the intention of concealing the application, they are also potentially liable to up to 7 years imprisonment as well as an unlimited fine. Anyone convicted of these offences may also be disqualified from being a director for up to 15 years.
If a company is neither carrying on business nor operation, the registrar may take action to strike a company off the register. The registrar may take this action if he has reasonable cause to believe that a company is not carrying on business or in operation.
The registrar may take this view if:
Before striking a company off the register, the registrar is required to write two formal letters and send notice to the company’s registered office to enquire whether it is still carrying on business or in operation. If the registrar is satisfied that it is not, he will publish a notice in the relevant Gazette stating his intention to strike the company off the register unless he is shown reason not to do so.
A copy of the notice will be placed on the company’s public record. If the registrar sees no reason to do otherwise, he will strike off the company not less than 2 months after the date of the notice. The company will be dissolved on publication of a further notice stating this in the relevant Gazette.
If you need your company to remain on the register, you must reply promptly to any formal enquiry letter from the registrar and make sure that your statutory obligations, such as filing a confirmation statement or accounts, are up to date. Failure to deliver the necessary documents may also result in the directors of a company being prosecuted.
Upon the dissolution of a company, any assets that remain will immediately be deemed to ‘bona vacantia’. Bona vacantia means ‘vacant goods’ and is the technical name for assets or property that become the property of the Crown because they no longer have a legal owner. In practice, this is often a bank account operated by the company which will be frozen and any credit balance in the account will be passed to the Crown.
If a company was incorrectly dissolved or the directors become aware of significant assets after the date of dissolution, it is possible to make an application to Court to have the company restored. This is a complex process and given that a Court application is required, it is recommended that professional advice is sought in this regard.
Any interested party can object to a company’s application to be struck off the register and dissolved.
An objection can only be considered by the registrar once notification has been published in the Gazette showing the registrar’s intention to strike the company off the register at the expiration of 2 months. It is important to send any objection to the registrar at the earliest opportunity after publication of the Gazette notice and at least 2 weeks prior to the notice expiry date.
For further information on dissolution, or if you’d like to discuss the options available for your business, please get in touch with the team at BLB Advisory.
This guide is based upon the information available on the Companies House website dated 7 February 2018 which can be accessed by following this link www.gov.uk/government/publications/company-strike-off-dissolution-and-restoration/strike-off-dissolution-and-restoration