January 11, 2023
In the UK, a company can be struck off the Companies House register as a result of a company resolution. This means that the company will no longer be trading and will have to cease any trading activities, such as cessation of payments or debts and the repayment of any creditors.
Under UK law, a company can be struck off if it fails to file its annual accounts, if it has not been trading within the last three years, or if it has gone into insolvency. In some cases, it may be possible to reverse the strike off, usually within 12 months of the date of the strike off.
What Happens After a Company Strike Off?
Once a company has been struck off, it will no longer be legally recognised and will no longer be able to enter into any binding contracts or undertake any business activities.
Voluntary Strike Off
When a company is likely to be dissolved via a voluntary strike off, the directors will likely liquidate all assets prior to the dissolution. - obviously, creditors would be a very important consideration during this process! Any assets remaining, such as property or land, that have been held by the struck-off company, will now be the property of the Crown and will be transferred to the Offical Receiver.
Compulsory Strike-Off
When a company is has been struck off via a compulsory strike-off for various reasons of non-compliance. The assets will be sold and the funds used to pay off the companies creditors. It is interesting to note that some creditors have preferences over others. HMRC is a preferred creditor and will receive funds before a normal trade creditor such as an electrical wholesaler.
Companies Act 2006
The company’s directors should also take steps to ensure that the company is completely wound up in accordance with the Companies Act 2006. This includes informing all clients, suppliers and creditors of the closing of the business and ceasing all trading activities. The directors must also submit all relevant documents to Companies House, such as accounts, tax returns and final directors' reports.
The company’s directors can also attempt to revive the company, but this will involve an application to Companies House, a meeting of creditors and a further hearing of the Court. If a hearing is granted, the directors must prove the company is viable and can meet its financial obligations.
Conclusion
When a company is struck off, it is important to understand the legal implications of the strike off and to act quickly and responsibly to ensure it is wound up properly. After a company strike off, the directors must take steps to ensure the company is properly wound up, they inform all relevant parties and they must cease all trading activities. In some cases, it may be possible to revive the company, but this requires a hearing of the Court to prove the company is viable.