Company Strike Off

Strike off is an informal way of closing down an unwanted limited company without having to go through a liquidation process. This is often known as dissolving a company and involves submitting a DS01 form to request that your company is removed from the Companies House register. Once this is achieved, the company will cease to exist as a legal entity.

As strike off is not classed as a formal insolvency procedure, directors can complete the strike off process themselves rather than having to appoint a licensed insolvency practitioner to facilitate the closure of the company on their behalf. This not only saves time but also money.

While strike off may represent a quick and affordable way of bringing an unwanted limited company to an end, it is not a process which is suitable for all companies which have reached the end of their useful life.

Strike off is designed as a way for solvent companies, or those which have never done any meaningful trade, to wind down their affairs and bring the business to an end. If there are any outstanding creditors, they must be repaid in full otherwise you risk them submitting a formal objection to your strike off application.

If your company does have creditors and outstanding debts which it is unable to repay in full, this is a major sign that the company is insolvent, and therefore the strike off process is not an appropriate option when it comes to closing the business down. For an insolvent company, they must place their company into a formal liquidation process such as a Creditors’ Voluntary Liquidation (CVL).

Strike off is achieved by submitting a DS01 form to Companies House and informing any outstanding creditors or interested parties of your intention to dissolve the company. Notice of your intention to strike off the company will then be advertised in the Gazette.

Creditors will then be invited to submit an objection to the proposed strike off if they have a legitimate reason for doing so. In reality, this is likely to be creditors who are owed money from your company and do not want to see it closed down before they have recovered what they are owed.

As long as no objections are received, following a period of two months the company will be struck off the register and will no longer legally exist.

If valid objections are received following the advertisement of the proposed strike off in the Gazette, your strike off application will be suspended and the company will continue to remain active and on the Companies House register.

At this stage you can either settle your outstanding liabilities and re-attempt to strike off the company with a new application, or if repaying your debts is not possible, you should contact a licensed insolvency practitioner for further guidance as to your options.

If you are looking at ways of closing your limited company, seeking advice from a licensed insolvency practitioner is the best way of understanding all the possible options and identifying the one which is most appropriate for your company based on its current financial position.

Contact the team at Begbies Traynor today to arrange a free no-obligation consultation with a licensed insolvency practitioner.