All you need to know about voluntary and compulsory strike off and how to prevent your company from being removed from the companies house register.
🔑 Key Highlights
- Strike off is the process of removing a company name from the companies register, after which it ceases to exist.
- There are two types of strike off - voluntary, initiated by the directors of a solvent company and involuntary initiated by Registrar of Companies against a limited liability company that fails to comply with its legal responsibility
- The consequences of a compulsory strike off can be adverse including fines, personal liability for business obligations and disqualification from acting as a director of a company.
Let's dive into what happens when you receive a notice from Companies House about your company facing a possible strike-off.
What Is a Compulsory Strike Off?
It is a term used to refer to an action taken by Companies House to remove a company from its register so that it is formally dissolved and ceases to exist. Companies flagged for strike-off are usually not actively trading or consistently fail to meet legal and regulatory responsibilities such as filing accounts or confirmation statements.
How does the compulsory strike off process work?
The Registrar of Companies will mark a company for compulsory liquidation for the following reasons.
- Failing to comply with statutory filing requirements — One of the top reasons the Registrar may forcibly strike off a company is failure to comply with filing requirements such as confirmation statements and accounts. Beyond being struck off companies and its directors may face serious consequences, including potential criminal or personal liability charges for non-compliance.
- Not actively trading and failing to comply with dormant company requirements — If a company is not actively trading and fails to meet the requirements of a dormant company, it exposes itself to the risk of being struck off.
- Absence of a director — When a company's sole director resigns or is removed by a shareholder vote, leaving the company without directors, it makes it eligible for strike off.
- Failure to notify the Registrar about a change in their registered office address — Neglecting to inform the registrar of a change in your registered office address can cause the company to be struck off.
❌ Warning
The unauthorised Use of a Registered Office Address is strictly prohibited. According to the Companies (Address of Registered Office) Regulations 2016, if any individual or entity submits an RP07 application to change a company's disputed registered office address, the registrar may deem the company unauthorised to use that specific address.
Failure to contest the application or present adequate evidence within 28 days will result in the Registrar changing the business address to the default Companies House address. Continuing to operate with the default address is not permissible (and maybe a basis for being struck-off the register), and immediate action is required to update it to an authorised limited company address.
The default address is published on the public register, and even if a company updates the registered office from the default address, the previous default address will always be publicly available, signalling that the company used an address without permission.
However, if you fulfil all of your legal obligations and have reason to believe that the strike-off notice is unfair, you can send an objection application to Companies House. If your reasons are viable and you provide satisfactory evidence, the process will be discontinued.
For any company that fulfils any of the above conditions, the Registrar of Companies for England and Wales, Scotland, and Northern Ireland may initiate the process of striking them off the register as follows —
1. Companies House inquiry
The process starts with Companies House sending letters to inquire about the business's current trading status and giving them 14 days to respond. In the absence of a reply, a follow-up letter with identical inquiry is issued, granting an additional 14 days for a response.
2. Issuance of a first gazette notice for compulsory strike
If the company fails to respond to the second letter of inquiry, Companies House issues a notice published in the Gazette in London, Edinburgh, or Belfast—depending on the geographical location of the company’s registered office.
The primary purpose of this notice is to declare their intention to strike off the company formally. It serves a dual role: providing management with an opportunity to take corrective measures and allowing creditors (including HMRC or former employees owed) the chance to raise objections.
Remember, the strike-off implies that the company will cease to exist, preventing creditors from pursuing and collecting outstanding payments.
✅ Insight
When facing insolvency, it is advisable to explore alternative solutions, including a Creditors’ Voluntary Liquidation (CVL), to avoid the negative consequences of an involuntary strike-off. In a CVL, a licensed insolvency practitioner takes charge of winding up the company and liquidating its assets for the benefit of creditors. Additionally, they may guide on potential eligibility for director redundancy payments from HMRC and other associated benefits.
3. Second Gazette Notice
If there is no response to the first notice, a second notice is published, providing a final opportunity for any concerned party to correct or object to the closure.
4. Dissolution and Cessation of Business
If there are no objections and the company officials take no action, the company is removed from the register and ceases to exist.
5. Asset Forfeiture
The Crown may claim assets, such as cash, machinery, or buildings, under the 'bona vacantia' (meaning ownerless goods) principle.
Directors may face an investigation into potential misconduct that led to the strike-off. If wrongdoing is found, it could lead to disqualification and even personal liability for company debts.
What Is Voluntary Strike Off?
According to section 1000 of the Companies Act 2006, a voluntary strike off is a process initiated by company directors to remove the company from the register and essentially close it down. It happens when a company is no longer in active business, and directors are happy for the company to close.
A business that fulfils the following conditions is eligible for voluntary strike off —
- During the three months before the application for voluntary strike-off, the company should not have conducted any business transaction.
- The company must have kept its name the same within the last three months.
- It should be financially stable and not at risk of liquidation.
- There should be no outstanding agreements with creditors, e.g., a Company Voluntary Arrangement (CVA), to avoid unresolved issues hindering the voluntary strike-off.
If the entity meets the above criteria, it must ensure that —
- All tax and debt liabilities have been addressed and settled for a clean financial record before closing.
- The company in question should make its employees redundant and pay their final wages if applicable. HMRC should also be informed that the company is no longer an employer.
- Business assets should be appropriately distributed among shareholders according to the company's structure and agreements.
- It filed its final annual accounts and Company Tax Return with HMRC to provide a formal record of the company's last trading period and impending closure.
In essence, meeting the eligibility criteria for voluntary strike off allows the company to wind down its operations systematically. Ensuring the resolution of financial and employee-related matters, proper asset distribution, and finalising the necessary documents with HMRC contribute to a smooth and legally compliant closure process.
A copy of the strike off application needs to be sent within seven days to the following parties potentially impacted by the liquidation so that they do not object —
- Members/shareholders
- Creditors
- Employees
- Managers or trustees of any employee pension fund
- Directors who did not sign the application form
The request for the company's strike-off will be publicised as a notice in the local Gazette if the form has been accurately filed. After two months without objections, the company will officially be off the register. Subsequently, a second notice will be Gazetted to confirm the official closure of the company.
What is the difference between voluntary and involuntary strike off?
Criteria |
Voluntary Strike Off |
Involuntary Strike Off |
Initiator |
Company directors or shareholders using a DS01 form. |
Companies House initiates the process |
Reasons for the strike off |
The company is solvent. Officials take a strategic decision to cease trading and close the company. |
The company has failed to meet legal, financial, or regulatory responsibilities. |
Publication notice |
The registrar will publish a notice of the proposed striking-off in the relevant Gazette to allow interested parties the opportunity to object. |
Companies House publishes the first notice, for objections to be raised or for the company to take remedial action. |
Assets |
The company handles the distribution of assets and settles liabilities before termination. |
Company assets, if any, are forfeited to the Crown. |
Eligibility |
Conditions include no threat of liquidation, not actively trading for the and no recent name change in the last three months. |
Failure to meet legal obligations. |
Final confirmation Gazette Notice |
A final notice is published confirming the closure. |
A notice is published by the Registrar confirming the closure. |
Outcome |
Once the process is completed, the company will be struck off and cease to exist. |
The company is dissolved. |
Consequences |
Generally, smoother closure with minimal legal repercussions. |
Serious consequences for the company and its directors. For example, being personally liable for company obligations, fines, disqualification from acting as a company director for two to fifteen years, potential investigation for non-compliance, and even custodial sentences. |
How can a company avoid compulsory strike off after receiving a request to strike?
If you want to avoid an involuntary strike-off, send an objection application to the Registrar of Companies as soon as possible. To make and submit it, you’ll need -
- To sign in to or create a Companies House account;
- Details of the company facing the strike off; and
- Evidence to support the objection, for example, invoices showing the company is still trading or owing a debt. These documents must show the company's full name and be at most six months old.
Furthermore, the company should ensure that all their annual accounts and confirmation statements are filed on time. If you need extra time to get your filings in order, please communicate with Companies House.
When can creditors object to a compulsory strike-off?
Creditors and concerned parties, including shareholders, can object to a strike-off after the issuance of the first gazette notice. The gazette notice serves as public notification about the Registrar of companies intent to be strike it off the register.
Why would a company compulsorily be struck off the register?
A company is usually subject to involuntary strike-off from the register when it fails to meet statutory requirements, including the timely submission of accounts and confirmation statements. The directors, shareholders, and external creditors like suppliers and HMRC have a two month window to raise objections against the application. If no objections are presented, the company will be struck-off from the register, leading to its dissolution.
What do I do after Getting the Gazette First Notice for Company Strike Off from Companies House?
Once you receive the first notice, you have two to three months to rectify the situation. Here are steps to consider —
- Determine the reason for the strike off — To remedy the situation, address the reason behind the notice, which may involve submitting your filings or proving that you are still operational.
- Apply for suspension — If you need more time to remedy the reasons behind the strike-off notice, prepare and lodge a suspension application to Companies House.
- Address outstanding issues — Clear any fees and taxes and update your filing requirements to stop the process from proceeding to the next step.
✅ Insight
Once the registrar initiates an involuntary strike-off, it is highly advisable to seek the assistance of a seasoned professional, such as a solicitor or accountant. Their expertise can prove invaluable in navigating the complexities associated with this procedure, increasing the likelihood of a smoother and more successful outcome for your company.
Can I stop a compulsory striking off notice?
Yes. You can halt a compulsory striking off notice directed at your company by resolving the underlying issues specified in the notice.
You can also apply to object to a company being struck off using a Companies House account if, for instance, it's indebted to you. Have the company details and documentation demonstrating that the company is still actively trading or has outstanding arrears.
FAQs
What if my company is insolvent?
If you want to close your company but it is insolvent, do all you can to avoid a compulsory strike-off, which will have negative consequences. Instead, you can opt for —
- Creditor’s Voluntary Liquidation (CVL), which involves appointing an insolvency practitioner to liquidate assets and distribute them proportionally to outstanding creditors.
- Company Voluntary Agreement between the company and its creditors allows it to continue trading under the supervision of an insolvency practitioner and pay its debts over time.
- Pre-packed Administration - The company can continue to trade under a pre-packed administration, which entails negotiating a sale of the company's assets before formally entering administration. By doing so, the business can swiftly transition to new ownership, potentially preserving jobs and ongoing operations.
Compulsory strike off consequences - What if I have assets in my company?
In the event of a compulsory strike-off, company assets will not remain under your control, nor will they be distributed according to the company's plans. These assets will be released to the Crown. It's essential to be aware of this consequence, as it emphasizes the importance of promptly addressing the compulsory strike-off notice and considering alternative options to safeguard your company's assets.
What are my options following a request to strike off?
Suppose a third party has forcibly struck your company off the Companies House register. In that case, you have the following options: if you –
- Have no outstanding arrears obligations and all assets have been realised simply allow the process to run its course.
- Believe the strike off is unjust, or the details are incorrect, you’ll need to prepare and submit a suspension application and engage the registrar for it to be discontinued.
- What to embrace the strike off but have assets and unpaid obligations, best pursue a voluntary liquidation.
How can I restore a company to the Companies House register?
Depending on the circumstances, there are two main ways to restore a dissolved company: administrative restoration and restoration by a court order.
1. Administrative restoration
You can only apply if the —
- Person or entity seeking the restoration was a director or shareholder
- Company was struck off the register and dissolved by the Registrar of Companies within the last 6 years
- Company was trading at the time it was dissolved
You apply for administrative restoration by sending to the Registrar a —
if your company had assets, a waiver letter from Bona Vacantia.
If your application has been successful, your company will be restored as soon as the registrar sends you a confirmation letter.
If your application is refused, you might be able to:
2. Court order restoration
You may be able to apply for a court order to restore a company if you:
- Did business with them
- Was an employee
- They owed you money at the time of the closure
- Were responsible for their employee pension fund
- Have shared or competing interest in land
- Were a shareholder or director when it was dissolved
To apply for a court order restoration in England and Wales, download and fill Form N208.
For assistance in completing Form N208, access guidance notes from the HM Courts and Tribunals service.
Next, you’ll need to find the company’s registered office and send the completed form to their nearest bankruptcy county court. Contact the Royal Courts of Justice if you need clarification on the appropriate court.
Include the following with the application:
- A £280 court fee (cash, postal order, or cheque made payable to ‘HM Courts and Tribunals Service’)
- A witness statement incorporating the supporting details specified in section 4 of the Treasury Solicitor’s Guide to company restoration.
In Scotland:
Apply to the Court of Session if the paid-up capital of the company's shares exceeds £120,000.
For other companies, apply to the local sheriff's court. Subsequently, serve a ‘petition to restore’ on the Registrar of Companies in Scotland and any additional entities as directed by the court.
In Northern Ireland:
Submit an ‘originating summons’ to the Royal Courts of Justice using the address below.
Royal Courts of Justice
Chichester Street
Belfast
BT1 3JY
Send a copy to the Registrar of Companies in Northern Ireland and a supportive witness statement.
The Registrar of Companies
Companies House
Second Floor
The Linenhall
32-38 Linenhall Street
Belfast
BT2 8BG
Upon acceptance of the claim, the court will issue an order to restore the company. Forward this order to the Registrar of Companies. Once received, the Registrar will proceed with the restoration of the company.
Consequently, take the following steps to pursue outstanding payments: