When will Companies House strike off a company?
What Is a Company Strike Off?
A company strike off ceases a business completely. All operational businesses are taken a record of within the Companies House registry. Once the company has been removed from this list, they stop any kind of existence. This is a company strike off. There are two variations of a company strike off, one that is voluntary and one that is compulsory.Contact us now
A voluntary strike off is a decision made by the company. The owner of that company applies for the business to be dissolved. This tends to be a result of the business no longer having a purpose. This could be down to the owner of the business wanting to retire. Another reason could be that they want to focus on other aspects of their lives.
A compulsory strike off is when the business is deemed unfit for further endeavours. Usually, a second party petitions that the business is taken off the list. This is often the Companies House that does this if the business has failed to file in their accounts.
When a company strike off request is made, there is a notice made in The Gazette newspaper. The notice is to inform other companies or parties that they can contest against the strike off. The people who wish to object have two months to respond to the notice. If there are no objections after this period, they then strike the business off the registry.
What Does It Mean When Your Customer Is on the Strike Off List?
When a company is struck off, it no longer exists. Any further use of that company is illegal. It must stop any trade it might have, and all assets left over will be handed over to the Crown.
The owner of any business that ends up on the strike off list should notify all relevant parties. Unfortunately, on some occasions, not all parties are informed. This can lead to creditors overlooking the information of the strike off altogether. This also means that creditors may miss the notice posted in The Gazette and miss their chance to appeal.
It will be much harder to recover any debts once the company has been struck off and dissolved. Before the strike off is implemented, the company should ensure that they have dealt with all business. They need to ensure that nothing is outstanding. This includes any further work that needs to be done and paying any outstanding bills.
What Happens If You Object to a Strike Off?
Sometimes, there have been companies that have requested to be struck off but still owe money. Here, the person or party can immediately object to the strike off as soon as it happens. To do this, they will have to contact the Companies House.
It is also possible to appeal the strike off once it is implemented if you were not informed. In this incident, you will need to have proof that the debt exists and be able to provide it to the Companies House.
Why Did My Customer Receive a Company Strike Off Notice?
Sometimes, a company will receive a strike off notice when they didn’t intend in dissolving. This notice will be sent from the Companies House. It is usually because of a business failing to file its account by the deadline set. They can organise an extension, but this has to be done in advance.
If a business files its accounts late and receives a strike off notice, it could signify that the company is suffering from financial difficulties. This is quite a common occurrence, with some big companies, such as BuzzFeed UK, receiving a notice in this way.
If you are doing business with a company that has received a strike off notice, assess their company’s situation. If you think that the company may find difficulties in paying you, protect yourself. There are steps you can take to achieve this.
• You can negotiate and agree upon better payment terms. The agreement could involve being paid upfront or giving them a reduced payment time. You can also decrease the amount the company owes you if you see fit.
• You can renegotiate contracts with the business. Some clauses will help cover your work from being unpaid. The Retention of Title clause is good to implement. It will allow you to repossess any unpaid goods if the company becomes struck off.
• You can cut your losses. If you feel it is definite that the company cannot pay anything back to you, you can immediately stop doing business with them.
Gm Professional Accountants have offices in London, Birmingham and Essex.