Compulsory strike offs are returning – what does this mean for your business?
Some are operating close to capacity thanks to homeworking and virtual workplaces but others are tentatively removing the covers and starting to crank up the gears literally and metaphorically.
They’ve now announced that from October 10th 2020, compulsory strike off actions would resume.
This means that from that date they’ll resume or begin the process to remove a company from the register if they have reasonable cause to believe that they’re no longer carrying on a business or in operation.
Some examples of evidence they look for include:
- Company documents and filings remain outstanding and Companies House have received no response to their official letters and communications.
- Letters sent by Companies House have been returned undelivered
- The company has no listed directors
Companies who don’t file their annual accounts or a confirmation statement will receive two letters from Companies House. If no reply is received to either of these then a notice is published in the London Gazette informing the public that the registrar intends to strike off the company.
Once compulsory strike off action resumes, if no objections are received and the statutory two month notice period from the publication of the Gazette notice has expired, then the company will be formally struck off.
Companies in default that want to remain on the register should contact Companies House straight away to arrange mitigation.
Chris Horner, Insolvency Director with Business Rescue Expert, said: “We often find that directors who allow their company to be struck off by companies house, often have a number of unresolved issues in the company, meaning strike off may not be appropriate.
Creditors may be unpaid and employees (including employed directors) have not been paid their full entitlements including redundancy. Allowing the company to be struck off may seem like a cheaper option when liquidation may be more appropriate, however it is easily prevented and even reserved by creditors.
There are options available to cover the costs of liquidation, in the event they are prohibitive to proceeding with the process. This will generally leave you in a better position, particularly where the company is left in limbo when a strike off is prevented.
It might be at different levels and timescales but the economy is restarting and with it the realities of economic life. For every business that is reopening, there will be more that for one reason or another are closing.
Some companies have a finite shelf life. Others may have found the fallout from the Covid-19 crisis too much while others still might be perfectly profitable but decide that it’s time to go in a new direction or want to try a new venture altogether.
Whatever the cause or circumstances, if the second half of 2020 means one door closes then get in touch with us today to make sure that 2021 will be wide open for you.
We can advise you on the most efficient and effective way to begin closing your company and be there every step of the way.