Companies House can strike a company off its register via a process called involuntary strike off. In fact, according to R3, the trade association for the UK’s insolvency and restructuring professionals, over 500,000 companies in the UK are struck off the register and dissolved each year, with around 95% being via this process just for failing to file accounts or confirmation statements on time.

When notice of the strike off is published in the Gazette, the company is deemed dissolved i.e. it ceases to exist and its assets pass to the Crown. In order to claim or recover against such assets, the company must be restored first which is not always a straightforward process, often to the dismay of the former directors, shareholders and /or creditors.

You can appreciate then how disruptive this could be if the company was struck off unintentionally and therefore it is particularly important for directors to ensure that they deal quickly with any correspondence from Companies House that signals an impending strike off, especially if the company is trading or holds assets.

An example would be British bicycle manufacturer, Raleigh, which has received a warning notice from Companies House in relation to late accounts which have not been filed. While this in itself is not indicative of any financial trouble and it has been reported that the delay is due to the parent company being yet to file its group accounts “due to the ongoing process regarding its financial structure”, it can shake brand and market confidence given this is just months after the brand’s parent company Accell confirmed job cuts, restructuring, and a move away from the manufacturer’s Nottingham headquarters due to a “challenging market”. It is best therefore to not let this situation arise in the first place.

If you would like to discuss corporate governance, companies house filings, involuntary strike off, or the process for restoring a dissolved company, please contact Sing Li at s.li@teacherstern.com or +44 (0) 20 7611 2362.