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Striking off is a Companies Act procedure to end the life of a company.

 

At a glance

At a glance

Also see our guide Striking off a company: step-by-step

Overview

Striking off procedure

"Striking off” is not the same as “winding up”. Winding up refers to liquidation, a process conducted by a liquidator to wind up a solvent or insolvent company.

How to strike off a company

Download form DS01 from the Companies House website. The directors should meet and make a board minute to confirm that:

The form is then completed and its declaration signed and sent off. If all is in order, the registrar will put a notice in the Companies Gazette to advertise that it has the power to strike off a company and inviting any interested party to show cause as to why this should be done. If no response is made the company is struck off three months later. 

If the company is insolvent, or becomes insolvent, its directors can be held personally accountable to its creditors. Once struck off, a company can be reinstated to the Register; this can happen at any time within the following 20 years. It is rare for this to happen because it is expensive to do.

The Registrar will not strike off a company which has outstanding debts or obligations to HMRC.

If the company has non-distributable capital reserves it will need to perform a Capital reduction in order to distribute them before you strike it off. Otherwise they will become ownerless goods, or Bona Vacantia which means that ownership passes to the Crown.

The Treasury Solicitor announced in November 2011 that by concession it will not claim share capital under Bona Vacantia. This may therefore be distributed on striking off even though this is illegal under the Companies Act.

Top-tip: if the company has complications, which mean there is uncertainty surrounding its solvency, the directors should not sign form DS01. They will need to appoint a liquidator to wind up the company instead, see Practical Tax Guide: Insolvency FAQs for directors.

Anti-avoidance measures

HMRC has the power to counteract tax advantages connected with Transactions in Securities.

The expanded definition of a TIS and the TAAR should not extend to a distribution on striking off. The £25,000 limit mentioned above applies instead of the TAAR. However the expanded definition of a TIS is not wholly inclusive and  the rules could potentially apply to a striking off if there is an income tax avoidance motive. 

 See Transactions in Securities.
 

 Restoration of a company struck off under s1003 Companies Act 2006/ s652/652A Companies Act 1985

A company which has been struck off can be restored to the Register the process depends on the manner in which it was struck off.

If the company was struck off by the registrar the process is dealt with by post and is reasonably simple, where a company was voluntarily struck off court action is required to reinstate the company and there is as a result a long-winded and expensive process.

See When can a company be reinstated?

Updates

2 November 2016: extra links added and minor wording changes to reflect the fact the TIS rules relate to distributions on a winding up, not a strike off.

12 April 2016: note updated for 6 April 2016 anti-avoidance the Transactions in Securities measures.