Help, My Companys Been Struck Off!

If youre an entrepreneur, youll have gone through the happy honeymoon period of forming your business, starting to trade, watching the money come rolling in. Yet sometimes it isnt all plain sailing. What happens if the dream fizzles out? What if your company (to use the proper terminology) is struck off? Devastated? Perhaps. Confused? Very likely. Its time to examine a few vital points: what striking off is, how it can occur, and how you can have your company restored should this happen to you...

What does it mean if your companys struck off? When somebody registers a new company, the company will be placed on the Companies House register. Should it be removed from the register for any reason, this is referred to as being struck off. There are two main ways in which this can come about, voluntarily or involuntarily. Lets look at the voluntary route first. If you decide you no longer wish to trade, you need to apply to Companies House directly, filling out a copy of Form DS01 and sending it to them. Dont expect an automatic yes- Companies House needs to determine that youre not seeking a dissolution for dubious reasons. They need to ensure that the company hasnt traded for three months, you havent changed the company name, you havent inappropriately disposed of your assets and you havent done anything that would impede the strike off. In other words, they need to make sure its all above board. If theyre satisfied you meet all these criteria, they will dissolve the company with little difficulty. A company shouldnt be involuntarily struck off unless its for good cause. Common reasons include:

Non operating- When- in accordance with the Companies Act 2006- Companies House has evidence that a company is no longer trading. Sometimes this can happen if a third party reports business as having ceased; a company director can step forward and save it from being struck off.

Non compliance- Its a legal requirement to submit your accounts and tax return each year. If you neglect to do this, itll be regarded as non compliance and your company will be struck from the register.

Insufficient and/or Non-Natural Directors- In order to legally operate, a company is required to have a certain number of directors, e.g. a private limited company needs at least one director while a public limited company needs two. If business partners fall out (a not uncommon occurrence!), they may both attempt to resign their position. Should this situation arise, the company will be short of directors and the registrar will be within their rights to strike the company off. Another problematic scenario is that of the un-natural- i.e. non human director. While a company can serve as the director of another company, it cant operate as the companys sole director; should this occur, the company may well be struck off. Likewise, a company director can only be sixteen years old or over- if a company has a director below that age, they will no longer be considered legally able to trade.

Fraud- If a director or the entire company is found to have been behaving fraudulently; they are likely to be struck from the register. Naturally this is one of the first thoughts that come to mind should a company dissolve voluntarily (see above).

How do I restore my company? The vast majority of companies are struck off accident- e.g. forgetting to declare a change of premises, forgetting to file tax returns etc. Understandably the business owners are mortified by the mistake and wish to return to trading as soon as possible. Previously company restoration required a long winded court process. Thankfully the changes effected by the Companies Act 2006 mean it can be brought about by a straightforward administrative order. Before this can be done, it needs to satisfy the following requirements: The company was trading at the time it was struck off When a companys dissolved, its assets are regarded as bona vacant, or ownerless property. Anything judged as such is passed to the Crown. A waiver must be granted before the company can be restored. All accounts and records must be up to date If the company has incurred any penalties, these must be fully paid up

Before you break into a little dance, you mustnt overlook the matter of fees. Company restoration typically involves: a processing fee (100) and the services of a Crown Representative (79). If you were dissolved due to negligent filing, that too comes with a fee.

For further information, follow these great links!

Formations Direct: Specialists in company formation and restoration services. Companies House: Their official site Entrepreneur: The best online resource for entrepreneurs!