What Does The First Gazette Notice For A Compulsory Strike Off Mean?

A ‘striking off’ of a limited company refers to the process of removing the entity from the register at Companies House. Following a strike-off, the company effectively ceases to exist, albeit there are measures that can be taken to restore a company to the register with the approval of the Court.

Striking off a company may either be done voluntarily, or compulsory strike-off action can be taken. A ‘First Gazette Notice’ may be filed in cases where the latter takes place but before going into what exactly that means, let’s quickly cover the broad differences between a Voluntary Strike-Off and a Compulsory Strike-Off.

Voluntary Strike-Off

As the name would suggest, a voluntary strike-off is initiated by the company itself. Perhaps the company is dormant, and it has therefore fulfilled its purpose. Sometimes directors opt to extract funds and assets from solvent companies before arranging for them to be struck off, often as an alternative to a Members Voluntary Liquidation (MVL). In a similar vein, some directors attempt to strike off their insolvent companies, i.e. those that are unable to pay their debts as they fall due, rather than enter an insolvency process, such as a Creditors Voluntary Liquidation (CVL).

If you are contemplating a voluntary strike-off as an alternative to an MVL or insolvency process, please read our previous articles:

• MVL Vs Strike Off – Which Is Better For Solvent Companies?
• CVL Vs Strike Off – Which is Better For An Insolvent Company?

It is also worth highlighting here the new powers to tackle unfit directors of dissolved companies, which affects directors who have opted to strike off their insolvent company.

Compulsory Strike-Off

By comparison, a compulsory strike-off is taken out of the hands of the directors. If the Registrar of Companies at Companies House has reasonable grounds to believe a limited company is no longer trading, they may take steps for it to be removed from the company register, known as a compulsory strike-off.

Such reasonable grounds include:

• Failing to submit an annual confirmation statement.
• Failing to file company accounts on time.
• Failing to notify Companies House of a change of the company’s registered office.

The compulsory strike-off action should not come as a surprise. Companies House are required to formally notify a company of the above breaches and give it the opportunity to rectify the position.

If Companies House does not receive a response, it will file a First Gazette Notice for Company Strike Off in the London Gazette. This is an online publication and is seen as a notice to the world at large.

First Gazette Notice for a Compulsory Strike Off

The first Gazette notice will stipulate that the company will be struck off the register within 2 months. This gives a period of time for any relevant stakeholder, such as a director, shareholder or creditor to object to the limited company being struck off. If the objection is accepted, Companies House would usually insist on some form of action to ensure the strike-off action is discontinued, such as filing your accounts.

If the company has ceased to trade and has no assets, the directors may decide to simply allow the strike-off process to continue.

If the company has liabilities, it is likely that a creditor may object to the strike-off action. This is a particularly common occurrence when a company owes tax liabilities to HM Revenue & Customs. The creditors may wish for the company to remain active to give them a better chance of being repaid, or perhaps they would prefer to see the company enter a formal insolvency process to give them the comfort that the financial affairs of the company and the conduct of the directors will be adequately reviewed in the best interests of creditors.

Need Advice? Get In Touch With My Liquidation

If you are considering either applying for a limited company to be struck off voluntarily or have received notice of a compulsory strike-off, you should take advice immediately. Your accountant will be able to advise you of your most appropriate options, as can a licensed insolvency practice such as ourselves.

Please feel free to contact us today for some free, no-obligation advice. We are here to help.