When a company is “struck off” from the register, it has essentially been closed down and therefore no longer operates as a business. Consequently, it will be removed from the register of operating companies by Companies House, the Registrar of incorporated companies in England and Wales.
The Small Business, Enterprise and Employment Act 2015 (“SBEE”)
With the introduction of the SBEE in 2015, Companies saw changes made to the strike off procedure, namely, a reduction in the time it takes to have a company struck off the register. The change came into effect on 10 October 2015.
What was the procedure before the change?
To have their company struck off the register, the board of directors had to publish their strike off application in the Law Gazette, to allow creditors to hear about it and submit any objection they may have to the strike off. The company could not proceed with the application before 3 months had passed since the publication, giving creditors plenty of time to object.
Companies House would also re-advertise the initial notice, if an objection has been submitted by a creditor, and had since expired.
This 3month-period was deemed too long, as it gave too much time to creditors to object, and slowed down the entire process for the shareholders/directors of the closing company.
What does the amendment mean for companies?
The government states that “the accelerated strike-off process aims for the right balance between removing a defunct company from the register and allowing creditors time to register an objection”. Therefore, the time the company has to wait before they can submit their application, has decreased from 3 months down to only 2 months.
This speeds up the process for shareholders and directors, meaning they can proceed with closing the business at an earlier date, and move on.
Additionally, Companies House will no longer re-advertise an initial notice once a valid objection has expired.
Advantages of accelerated strike off
This accelerated procedure can be beneficial to those waiting to use the company’s name as their own. Companies cannot have the same name on the register, due to the confusion this causes. Therefore, should another company wish to change their name to the struck-off company name, they will have less time to wait to do so.
Disadvantages of accelerated strike off
Unfortunately for creditors, this amendment has meant that they are at a slight disadvantage compared to their previous position. As well as the obvious reduction in time to submit an objection to the application; due to Companies House choosing to no longer re-advertise notices, creditors will now have to ensure they look out for the initial notice and submit their objections within the 2month period.
FormalitiesThe Form used to make the strike off application has not changed with the amendment. Companies are still required to complete Form DS01, and submit this to Companies House, after the expiration of the 2month notice period. It costs £8 to make the application online, or a paper application can be submitted at a cost of £10.