When a company is struck off the register at Companies House, it means that the company has been dissolved and will no longer exist, but what happens if your company strike off has been suspended?
In order for your application to strike off your company to be suspended a creditor has objected to your dissolving the business and your company will therefore remain active and on the Companies House register.
The company will not be dissolved until another application has been made and no objections received.
Why has my company strike off been suspended?
There are a number of reasons why your company’s strike-off may have been suspended. The first reason is that the Companies House may have received new information about your company that means it is no longer eligible for strike-off. This could include new filings or changes to your company’s status.
Alternatively, there may be an ongoing investigation into your company that has led to the suspension of its strike-off. If this is the case, you will need to resolve the issues under investigation before your company can be struck off theregister.
Finally, your company’s strike-off may have been suspended due to a change in the law or other regulatory requirements. In this case, you will need to ensure that your company complies with the new requirements before it can be struck off.
If you are not sure why your company’s voluntary strike-off action has been suspended, you should contact the Companies House for further information.
What are your options if your compulsory strike-off action has been suspended?
The first thing you need to do is find our who suspended the action, you should make contact with Companies House directly and they will be able to tell you the nature of the objection and who made it. This is important because only then can you clear the specific impediment to your strike off being accepted.
If you have applied to Companies House in order to voluntary strike off your company here are three main options open to you.
- Re submit your application – and hope that your creditor does not object this time around. You may be lucky and your application may slip under the net, however, you should be aware that your company can be restored to the register even after it has been struck off should a creditor be able to give a valid reason for this. Now that your creditor is aware that you are trying to remove the company from the register, they will be keeping a close eye on your actions and will be ready to step in with an objection.
- HMRC objection – you need to find out which taxes are outstanding and for what period as it may be several years that have accrued rather than one outstanding period. In all likelihood if HMRC are the objecting party then they will write to you outlining their objection and suggested remedies.
- Small debt – you could pay off your creditor and once this has been settled simply submit the strike off application again. As your company now does not owe anything, there is no reason for your application to be rejected. This route is obviously dependant on the size of your company’s debt and your ability to clear this balance.
- Enter into a formal liquidation procedure – to bring about the end of your company. This will typically take the form of a Creditors’ Voluntary Liquidation (CVL). An insolvency practitioner will be appointed to manage the affairs of the company and close it down. Any assets in the company will be liquidated and distributed to outstanding creditors on a proportional basis. Any debts left outstanding will be written off as part of the process.
Valid reasons for objections to company strike-off
There are a number of reasons for a company strike-off procedure being rejected or suspended is if HMRC believe that the company has unpaid tax liabilities such as VAT or corporation tax.
Objections can also be raised by other interested parties such as:
- Creditors who have unpaid bills with the company.
- Anyone who has proof that the company has traded, or changed its name within the last 3 months.
- Any interested party who was not informed by the directors of the application to strike-off the company.
- Anyone who is currently engaged in legal proceedings with the company, or is taking action against the company to recover debts.
A company strike off is a process by which a company is removed from the register of companies and dissolved. The process is typically initiated by the company itself, but can also be instigated by creditors or the government. In some cases, the process of strike off may be suspended, meaning that it is temporarily halted and the company remains on the register.
Reasons for suspension may include outstanding debts or legal disputes, or the need for the company to continue trading in order to pay off its creditors. Suspending a strike off can also be used as a way to buy more time to resolve any issues that are preventing the company from being dissolved.
It is important to note that, during the suspension period, the company will still be considered as dissolved and will not have any legal capacity to trade or enter into any contract.
Read more: Strike off vs liquidation
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.