So, you’ve made the difficult decision to strike off your company and embark on a new chapter. It can be a daunting process, but fear not! In this article, we will guide you through the steps of how to strike off a company. From notifying the appropriate authorities to settling any outstanding debts, we’ve got you covered. By following our comprehensive guide, you’ll be well on your way to successfully concluding your business endeavour and moving forward with confidence.
Overview of striking off a company
What does it mean to strike off a company?
Striking off a company refers to the process of formally closing down a company and removing its name from the official company register. It is a way to dissolve a company legally, signalling the end of its operations and existence. Once a company is struck off, it ceases to exist as a separate legal entity.
Why choose to strike off a company?
There are several reasons why a company owner may choose to strike off instead of going through a more complex and time-consuming liquidation process. Some common reasons include the company’s non-trading status, financial difficulties, or the desire of the directors or shareholders to retire or pursue other ventures. Striking off can be a simpler and more cost-effective option for companies that have no outstanding debts or liabilities.
Legal requirements for striking off a company
Before initiating the striking off process, a company must ensure compliance with legal obligations. These requirements vary depending on the jurisdiction, but commonly include settling outstanding debts and filing final tax returns. Additionally, obtaining clearances and certifications from regulatory bodies may be necessary to satisfy legal obligations.
Preparing for striking off
Assessing the company’s eligibility for striking off
Before proceeding with striking off, it is essential to assess whether the company meets the eligibility criteria set by the relevant regulatory authority. Generally, companies that have ceased trading for a specific period, have no outstanding debts, and have obtained approval from shareholders can be considered eligible for striking off.
Informing stakeholders and employees
In order to ensure transparency and adhere to legal requirements, it is crucial to inform all stakeholders and employees about the company owner’s active proposal to strike off the company. This includes notifying directors, shareholders, creditors, and employees about the impending closure and providing them with necessary information and documentation.
Obtaining necessary approvals and permissions
Depending on the jurisdiction, companies may need to obtain certain approvals or permissions before proceeding to strike off a company. This may involve obtaining consent from shareholders, creditors, or regulatory bodies. It is important to carefully follow the legal procedures and requirements to ensure a smooth striking off process.
Settling financial and legal obligations
Clearing outstanding debts and liabilities
Before commencing to strike off a company, it is crucial to settle any outstanding debts and liabilities. This may involve paying off creditors, resolving disputes, and ensuring all financial obligations are met. It is important to maintain accurate financial records and obtain receipts or confirmations of clearance to provide proof of settling all financial obligations.
Filing final tax returns and accounts
As part of the steps to strike off a company, the directors must file final tax returns and accounts with HM Revenue and Customs and Companies House. This includes declaring all income, expenditures, and any outstanding tax liabilities. Ensuring accurate and timely filing is essential to comply with tax regulations.
Closing company operations
Disposing of company assets
During the process to strike off a company, it is important to properly dispose of company assets. This may involve selling, transferring, or distributing assets to shareholders or creditors, depending on the company’s financial situation and legal obligations. Care should be taken to ensure proper valuation and lawful disposal of assets.
Terminating contracts and agreements
Before commencement to strike off a company, all contracts and agreements entered into by the company must be properly terminated or transferred to another entity, if applicable. This includes leases, licenses, supplier contracts, and any other legally binding agreements. It is essential to provide notice to all parties involved and obtain necessary consents or approvals.
Cancelling licenses and permits
To complete the striking off process, it is important to cancel any licenses, permits, or registrations held by the company. This may include notifying relevant government agencies, regulatory bodies, or industry-specific authorities about the closure of the company and formally surrendering or canceling any licenses or permits that are no longer required.
Obtaining clearance from regulatory bodies
Informing regulatory bodies about company closure
As part of the process to strike off a company, it is necessary to inform the relevant regulatory bodies about the closure of the company. This may include notifying tax authorities, social security agencies, labour departments, and any other applicable regulatory bodies. It is important to provide accurate and timely information to ensure compliance with legal requirements.
Obtaining necessary clearances and certifications
Depending on the jurisdiction and the nature of the company’s operations, it may be necessary to obtain clearances or certifications from regulatory bodies. These clearances certify that the company has fulfilled all necessary obligations and requirements before being struck off. This may include obtaining clearance certificates from tax authorities, environmental agencies, or industry-specific regulators.
Informing stakeholders and public
Notifying shareholders and directors
In order to maintain transparency and fulfil legal obligations, it is important to notify shareholders and directors that the owners of the company are thinking of striking it off the company register. This includes providing them with regular updates on the progress of the striking off process, addressing any concerns or queries they may have, and obtaining their approval or consent when required.
Publishing a public notice of company closure
To ensure public awareness about the closure of the company, it may be necessary to publish a public notice in local newspapers or official gazettes. This notice serves as a formal announcement of the owners of the company thinking of striking off procedure and provides important information for any interested parties, such as creditors or claimants.
Applying for striking off
Submitting the application for striking off
To initiate the company strike off process, company owners or directors must submit an application to Companies House. The application form must be signed by more than half the directors if a company has more than one director. The application must be completed accurately and in accordance with Companies House guidelines.
Paying applicable fees and charges
As part of the striking off process, companies are required to pay a processing fee to Companies House. These fees cover administrative costs associated with the striking off process. It is important to review the applicable fee and submit the payment along with the striking off application to avoid any delays or complications. At the time of writing, the fee is £8 for online submission and £10 for postal submission.
Review and verification
Reviewing the striking off application
Once the striking off application is submitted, Companies House will review the application and supporting information. This review ensures that all necessary information has been provided and that the company meets the eligibility criteria for striking off. Any discrepancies or inconsistencies may need to be rectified before the application can proceed.
Resolving any discrepancies or issues
If any discrepancies or issues are identified during the review process, it is important to resolve them promptly to avoid delays in the striking off process. This may involve providing additional information, rectifying errors, or addressing any outstanding matters identified by Companies House.
Striking off process completion
Approval and publication of the striking off notice
Once Companies House is satisfied with the application and all necessary requirements have been met, they will grant approval for striking off. Following approval, a striking off notice will be published in the official gazette, officially notifying the public about the company’s striking off and dissolution. This will provide interested parties with the opportunity to object to the application for a strike off.
Company officially struck off and dissolution
After the striking off notice is published and there are no objections, Companies House will officially strike off and dissolved the company after a period of not less than 2 months from the date of publication. This means the company no longer exists as a separate legal entity, and its name is removed from the official company register. The striking off and dissolution mark the final stages of the company closure process.
Record-keeping and archiving
Even though the company no longer exists, it is essential to maintain accurate records and archive all necessary documents related to the company’s closure. This includes financial statements, tax returns, audit reports, clearance certificates, and any other relevant records. Proper record-keeping facilitates compliance with legal requirements and provides a reference for future needs or inquiries.
In conclusion, to strike off a company is a comprehensive process that involves several steps, from assessing the company’s eligibility to obtaining clearances, closing operations, and applying for company strike off. It is essential to follow legal requirements and ensure compliance with applicable laws and regulations throughout the process. By properly completing the striking off process and fulfilling post-striking off responsibilities, companies can conclude their operations smoothly and in accordance with legal obligations.