Voluntary Company Strike Off in the UK: A Guide
How to voluntarily strike off a company in the UK
This overview provides an insight into the process and formalities required for a company to be formally removed from the register of companies.
The term voluntary strike off should not be confused with liquidation, where a specialist is appointed to settle all of a company’s outstanding liabilities before it is removed from the register.
Why strike off a company voluntarily?
Voluntary strike off is often used when the company’s continued existence is no longer required. For example, following an asset sale or a group restructuring or where it was incorporated for a specific project which is no longer going ahead or has finished.
There is a certain amount of statutory compliance and cost involved in maintaining a company on the register. For instance, a company needs to file annual accounts which can be rather costly, and voluntarily striking off a company that is no longer active avoids such expenses.
The requirement to appoint at least one natural person as a company director, and the ensuing duties they owe to the company represent another potential risk involved with keeping an inactive company on the register. The director in question may be personally liable if those duties are breached (if you would like to find out more, please see our Client Guide on Directors’ Duties).
Issues to consider before choosing to strike off a company
The following points need to be considered by the company’s directors before making an application for voluntary strike off:
- Assets: All the assets owned by the company (tangible and intangible), need to be transferred to another party or otherwise dealt with before the company is dissolved. Otherwise, its assets will pass to the Crown on the Company’s dissolution.
- Liabilities: Any existing creditor must be notified that the company is proposing to be struck off the register. It is vital to ensure that all possible liabilities have been accounted for.
- Share Capital: The capital contributions made by a company’s shareholders can only be returned to them in certain scenarios - striking off being one of them. However, where possible the directors should take advantage of the ability under the Companies Act legislation to reduce the Company’s share capital before applying for striking off.
Formalities of striking off a company
Once all of the above points have been dealt with, the actual procedure to get the company dissolved is relatively straightforward. The company’s directors must complete and file the relevant Companies House form, together with a small Companies House fee (which is currently £10). The application must be signed by the majority of directors, and will include a declaration that the company is neither i) carrying out specific activities such as trading or continuing its normal business activities; or ii) changing its name or involved in ongoing proceedings (such as a scheme of arrangement or company voluntary arrangement).
In addition, within seven days of applying to have the company struck off, the applicant must also notify anyone who, at the time of application, was either a shareholder, director, creditor (including prospective and contingent creditors) or an employee of the company.
Once the application for voluntary strike off is received by Companies House, and they are satisfied that the statutory rules have been complied with, a notice will be published in The Gazette to that effect. Provided that there are no objections to the strike off, Companies House will strike the company off the register not less than two months after the date of publication of the notice, and the company will officially cease to exist.
Further information on voluntary company strike off
We hope this provides you with a helpful summary of what is a voluntary strike off and the considerations and process. This guide is not legal advice, but should you require any further advice or assistance, please do not hesitate to contact us.
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