Strike Off can be used to close a company that is no longer needed. The business is simply deleted from the register at Companies House.
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When to use Strike Off
The process of Strike Off (or disolving a company) is generally only suitable if your company has no assets or debt. It is useful because you do not have to pay to formally liquidate the business.
A key condition which allows you to use Strike Off is that the company must not be trading. In addition it cannot own any assets or have any cash in its bank account.
A company cannot apply to be struck off if it is the subject, or proposed subject, of formal insolvency proceedings.
The company will only be struck off if there is no objection from any of its creditors. For this reason it is generally only used where there are no outstanding debts.
How to Strike off a Company
If you have decided to strike off your company you must first cease trading. There can be no trading activity for at least 3 months before the application is submitted. During this time any debts can be settled from company funds.
The next step is to inform any outstanding creditors of the plan to dissolve the business. They must be given three months notice.
HMRC must be informed of the intention to Strick Off. This is the case even if you believe that the company has no outstanding Tax or VAT debt.
If there are no creditor objections then after three months the application can be submitted to Companies House. They will register the application and put it on the company’s public record. There is then a 3 month waiting period.
If there are no objections after 3 months the company is then deleted (dissolved) from the register. It is then considered formally dissolved. No further company returns need to be lodged from this point.
What does company Strike Off cost?
The cost of Strike Off is minimal. The fee which must be submitted with the application to Companies House is just £10. This is considerably less than formally liquidating the company.
However Strike Off is not necessarily a final process. After a company is dissolved any outstanding creditor can apply for it to be restored. This can happen any time up to 20 years after the company was struck off.
Creditors might take this action if they feel that their debts have not been dealt with properly or they require an investigation into the director’s conduct.