What happens after suspended company strike off application?
If your application to strike off is paused, it indicates a creditor has opposed dissolving your business. Consequently, your company will stay active on the Companies House register. Dissolution only occurs after a new application faces no objections or you initiate liquidation proceedings.
What can I do if creditors have objected to my limited company strike off application?
If you’ve opted to dissolve your limited company by submitting the DS01 form to Companies House, your request may face hindrance or suspension. Usually, this occurs due to unresolved debts with creditors who could lose money if your company is dissolved and removed from the register.
This might involve a supplier pursuing an unpaid invoice or HMRC seeking unpaid taxes. Companies have a two-month window from the date your dissolution application is publicised to raise objections. If Companies House upholds an objection, your dissolution request gets suspended, and your company stays active.
What are my options after a suspended strike off application?
In this scenario, you have these choices.
- Your first option is to reapply for strike off, hoping your creditor doesn’t object this time. While there’s a chance it might go unnoticed, be cautious as your creditor is likely monitoring your actions, ready to object. Additionally, note that a valid reason from a creditor can reinstate a struck-off company.
- If your application is suspended due to a small outstanding debt, consider settling it and then resubmitting the strike off application. With no outstanding debt, there’s no reason for rejection. However, evaluate the size of your company’s debt and your ability to clear it. Avoid showing preference in payments and treat all creditors equally when closing the business.
- Exercise extreme caution if your company has multiple debts with various entities. Unless you can settle all your debts, avoid making payments to any creditors before initiating the strike-off process. For instance, if only one creditor opposes your company’s strike-off among several, settling that single debt and proceeding with dissolution can be deemed a preference payment, potentially leading to accusations of wrongful trading.
- Your last resort is to undergo a formal liquidation, typically through a Creditors’ Voluntary Liquidation (CVL). In a CVL, an insolvency practitioner is appointed to oversee the company’s closure. Company assets are liquidated, and the proceeds are distributed proportionally among outstanding creditors. Any remaining debts are discharged as part of the liquidation process.
A certified insolvency practitioner ensures the proper closure of the company. After liquidation, you need not fear creditors petitioning for your company’s reinstatement. Instead, you can be confident that the company has been formally closed, allowing you to move forward.
If you’re contemplating the closure of your company, it’s crucial to promptly reach out to a licensed insolvency practitioner for the necessary guidance. Vanguard Insolvency boasts a nationwide team of such practitioners who can discuss your options and assist in determining your next steps. Contact our expert team today to schedule a free, no-obligation consultation.
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I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.