Is your company in danger of being struck off the register at Companies House?
The Corporate Insolvency & Governance Act 2020 granted automatic extensions for filing deadlines between 27 June 2020 and 5 April 2021. Thereafter, on 27 January 2021, Companies House announced that it had temporarily paused it’s voluntary and compulsory strike off processes. This was lifted on 8 March 2021.
It has been reported that companies being dissolved following a strike off has increased by 743% in the first quarter of 2021 (compared to the same period of 2020). This means in the first 3 months of 2021, 39,601 companies were struck off .
Companies may be getting caught out now that the temporary measures previously introduced due to the pandemic have been lifted.
If a company is late with their filings, they risk Companies House commencing it’s strike off procedure. This entails Companies House writing two formal letters and sending a notice to the company’s registered office. If a satisfactory response is not received, a notice is published in the relevant Gazette stating the intention to strike the company off the register. A notice will also be placed on the company’s public record.
If a reason not to strike the company off the register is not provided, the company will be struck off not less than 2 months after the date of the Gazette notice.
The consequences of your company being struck off the register include:
- the company will be dissolved;
- if the company owns assets, the assets will become the property of the Crown (Bona Vacantia);
- directors can be disqualified under the Company Directors Disqualification Act 1986; and
- if the company had debts at the time it was dissolved, the directors may become liable for those debts.
The automatic penalties for late filings are being imposed by Companies House now that the temporary moratorium has been lifted. Do subscribe to the email updates to advise you when filings are due. Do not delay in getting in touch with Companies House if you are late in filing, you may be able to apply for more time for accounts filings. Those who are eligible and cite covid issues in their application, may still be granted a 3-month extension for filings. Companies House may also be able to provide financial support with payment plans where penalties have been applied (this is only for a temporary period).
What happens if it is too late and my Company has been struck off?
If a company has been struck off for late filings, it is possible to apply to reinstate the company by way of administrative restoration. A number of applications are being made at this time.
Briefly, in order to reinstate a company, the following must apply:
- the applicant was a director or shareholder of the company;
- the strike off and dissolution by Companies House must have occurred within the last 6 years; and
- the company must have been trading at the time it was dissolved.
If the above applies, an application for administrative restoration (RT01) will need to be made to Companies House and a fee of £100.00 must be paid. All outstanding documents and any filing fees or penalty payments must be sent together with a waiver letter from Bona Vacantia Department of Government (if the company had assets).
If the application is successful, the company will be deemed to have continued its existence as if it had not been dissolved or struck off.
If the application is unsuccessful, you may still be able to apply for a court order to restore the company or obtain a discretionary grant (i.e. if you were a shareholder making a claim).
If you are struggling to meet your filing deadlines, if you have received a notice for strike off or you require further advice on the points raised in this article, please do not hesitate to contact our Corporate and Commercial Team at firstname.lastname@example.org who will be able to guide and assist you. We can also provide a company secretarial service to deal with all your company’s filings and other administrative requirements, please contact us at email@example.com for further information.