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It is important to note that dissolution and striking off is not a valid means of escaping company creditors, who can apply to have the company restored in order to pursue their claims. There are stringent notification requirements and other procedural requirements that directors must follow in order to avoid sanction.
Upon approval by a majority of the company’s directors, an application for striking off and dissolution can be made for a nominal fee. A specific form – DS01 – must be signed and dated by the voting majority of directors.
Under the Companies Act 2006, a company cannot be struck off if within the three months prior to the application the company has:
A company cannot be struck off if at the time it is subject to insolvency proceedings or a creditors’ agreement.
Permissible activity that will not prevent striking off includes:
Where striking off is in contemplation, a company must perform diligence in identifying any parties who might have an interest in the company and could potentially move to prevent the striking off. Once identified, the parties must be notified within seven days of the making of an application. These include HMRC, creditors, banks, employees, landlords and tenants, and other government agencies. If a new director is appointed, or employees hired, after an application but before striking off occurs, they must also be notified within seven days of appointment or hiring.
Prior to striking off, it is important to ensure that bank accounts are closed and assets are sold off. Upon dissolution, any credit or assets still remaining will vest in the Crown.
Upon receipt of an application form for striking off, the proposed striking off will be announced by notice in the London Gazette in order to afford outstanding interest parties the chance to object. If no such objection is made, the company will usually be struck off the register at least two months after posting of notice. It is advisable to ensure that objections are received by the registrar two weeks before the end of the two-month grace period.
An interested party may base their objection on statutory grounds laid out in the Companies Act 2006. These include where the applicant company has failed to comply with procedural requirements, resumed trading or that the company is subject to insolvency proceedings, that the directors failed to inform that to other interested parties, and where fraud or misrepresentation has been committed.
If a company applies for striking off but pending approval it becomes ineligible based on the abovementioned grounds, it must seek withdrawal of the application.
Where a company fails to adhere to the above mentioned eligibility grounds or time limits, its directors may be subject to criminal sanction and disqualification from directorship for up to 15 years.
If the registrar has reasonable cause to believe that a company is not carrying on business, they may under their own volition strike off the company.
Before proceeding on these grounds, the registrar must issue two formal letters to the company’s registered office enquiring whether the company is continuing its business. If no adequate response is received, the registrar will post a notice in the Gazette offering the chance for interested parties to object. If no such objection is received, the registrar will proceed to strike off the company at least two months after posting of notice.
After being struck off and dissolved, interested parties can apply to court to have the company restored. The effect of restoration is to bring the company back into existence as if the striking off had never occurred. Certain time limits apply depending under what statutory regime the company was dissolved.
If the company was dissolved on or after 1 October 2009 on grounds of initiative by the registrar or on application by the company directors, restoration can be sought up to six years following initial dissolution.
If the company was dissolved pursuant to voluntary winding up on insolvency or other form of liquidation on or after 1 October 2007, restoration can be sought up to six years following dissolution.
For personal injury claims against the company, there are no applicable time limits for restoration.
If a company leaves assets that vest in the Crown, a court may direct an interested party seeking restoration of the company and its assets to pay the costs for restoration. If a company owed late filing fees with Companies House prior to initial dissolution, these will also be required to be paid upon restoration.
Bringing a company to an end requires meticulous attention to what debts and liabilities owed and to which interested parties who might object to the company being struck off.
The Insolvency Solicitors at Lewis Nedas have served a wide range of clients with their financial affairs during difficult times, including directors in insolvency and stakeholders such as banks, sponsors and landlords. We have provided expert advice on salvaging company prospects, including reorganising and restructuring of debts.
For further information or to speak to our expert Corporate Recovery & Insolvency Lawyers please get in touch.
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Miles Herman is a clever, understated lawyer who is at the top of his game.
Richard McConnell carried out conveyance for my family on 4 London flats, 1 sale and 3 purchases. In each instance he was excellent. The attention to detail and communication throughout the process was perfect. I have recommended Richard to several family members and friends who have been extremely pleased. I would have no hesitation in using Richard McConnell and Lewis Nedas in the future should the need arise.
I wanted to take the opportunity as well to thank you for everything that you have done on this case. The result that we got on Monday will have a massive positive impact not only on my life but the lives of all my family including that of my own son. I personally was struggling to hold back the tears when the sentence was being delivered by the judge and I know my father and sister felt the same too. It must be fantastic to work in a way that can have such a positive impact on people’s lives and I want you to know how much it all means to us all. Thanks a million and good luck with all that you do going forward.
Lewis Nedas advised me in a serious case of insider dealing. The lead solicitor dealing with my case was Jeffrey Lewis, who impressed me with his quick grasp of the very complex circumstances. His in-depth knowledge of how the City really works and his long experience of serious financial crime gave me great confidence. But it was also his friendly and supportive attitude, and readiness to take calls (or return them promptly if he was in court) which was very reassuring. I was delighted with the positive result of the case, and the speed and efficiency with which it was handled.
Lewis Nedas Law Limited, led by Jeffrey Lewis, is known as ‘an exceptional firm with a strong team of talented and expert criminal lawyers’. The practice offers a wide range of high-end legal services, including on cases concerning espionage, terrorism, and murder. Siobhain Egan has strong experience in multi-jurisdictional matters; recent highlight engagements concern organ trafficking and terrorism financing, among other matters. Unan Choudhury is noted for his work regarding espionage and murders, while Keith Wood is an expert in High Court contempt proceedings which arise from criminal activity. Other key figures include Miles Herman, who represents clients in complex litigations.
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