July 20, 2020 Voluntary Company Strike Offs to resume
One of the stranger effects of COVID-19 has been that companies have stopped dying or, to put it more accurately, the striking off process was suspended for all companies from 16 April 2020. Companies House have now announced that these measures will be lifted with effect from 10 September 2020 for voluntary strike offs (but not compulsory strike offs).
Our view
The intention behind these changes seemed to be to stop companies from being dissolved ‘by accident’ during the COVID-19 pandemic. Although this makes sense for compulsory strike offs, it makes less sense for voluntary strike offs. In the vast majority of cases where a voluntary strike off is requested, the company is no longer trading and is simply not wanted by the owners (this is largely a requirement of section 1003 Companies Act 2006). By suspending this service, thousands of companies have remained on the register subject to all of the normal statutory requirements of a company.
The directors still owe director duties, the registered office still needs to be maintained, accounting records must be kept (and accounts produced and filed), as well as all the other legal obligations that apply to companies and their officers. Although Companies House are not in the practice of chasing for documents for companies that have applied to be struck off the register, the legal obligations still remain and criminal acts can be committed for companies that fail to meet these legal obligations.
We assume that the reason for this suspension was to protect people who may wish to object to the striking off of a company but, given that a company can be restored to the register if necessary, in our view this suspension was rushed and ill thought through.
What does this mean for your voluntary striking off?
There are, broadly, three scenarios that need to be considered in relation to striking off:
- An application was made to voluntarily strike a company off the register prior to 16 April 2020
Assuming no objection have been received and the Gazette Notice was published prior to 10 July 2020, then the company should be struck off shortly after 10 September 2020 - An application was made to voluntarily strike a company off the register after 16 April 2020 but before 10 July 2020
Assuming no objection have been received and the Gazette Notice was published prior to 10 July 2020, then the company should be struck off shortly after 10 September 2020 - An application was/is made to voluntarily strike a company off the register on or after 10 July 2020
The application will proceed as normal, but due to the two month time period following the Gazette Notice, the company cannot be struck off prior to 10 September 2020.
What about Compulsory Strike Offs?
These remain suspended for all companies, with no date given as to when these may resume.
What about Insolvency Procedures?
These were not affected by these rules and should have been proceeding as normal
How we can help
Elemental CoSec can assist with all aspects surrounding the compulsory or voluntary striking off of a company. Please feel free to contact us or see our striking off services page for more information.
