Striking Non-Trading Companies off

1. General

The directors or the majority of the directors of a non-trading private company[1] may apply to the Registrar of Companies to strike the company off the register. An application cannot be made if, at any time within the previous three months prior to making the application, the company has:

(a) changed its name;

(b) traded or otherwise carried on business;

(c) made a disposal for value of property or rights which, immediately before ceasing to trade or otherwise carry on business, it held for the purpose of disposal for gain in the normal course of trading or otherwise carrying on business; or

(d) engaged in any other activity, except one which is necessary or expedient for the purpose of making the application, concluding the company’s affairs, complying with legislation, or specified by the Secretary of State by order.

A company will not be treated as trading or otherwise carrying on in business by virtue only of the fact that it makes a payment in respect of a liability incurred in the course of trading or otherwise carrying on business.

An application cannot be made at any time where:

(a) an application has been made to the court on behalf of the company for the sanctioning of a compromise or arrangement, and the matter has not been finally concluded;

(b) a voluntary arrangement in relation to the company has been proposed, and the matter has not been finally concluded;

(c) an administration order in relation to the company is in force, and the matter has not been finally concluded;

(d) the company is being wound up, whether voluntarily or by the court, or a petition for the winding up of the company has been presented and not finally dealt with or withdrawn;

(e) there is a receiver or manager of the company’s property; or

(f) the company’s estate is being administered by a judicial factor. 

2. Procedure

The procedure for application is as follows:

(a) The company passes a board resolution resolving to have the company’s name struck off the register.

(b) The company completes the prescribed form (form DS01) and sends it together with a fee of £10 to the Registrar of Companies. The Registrar registers the information and puts it on the company’s public record.

(c) Within 7 days of sending the application to the registrar, you must send a copy of the form to the company’s members, creditors, employees, managers or trustees of any employee pension fund or any director who have not signed the form or any person who becomes one of the above after the day the application is made.

(d) The Registrar of Companies places a notice in the London Gazette stating that he may exercise his power to strike off the company and inviting any person to show cause why he should not do so, a copy of the notice will be placed in the company’s public record.

Upon receipt of the application, the registrar will send an acknowledgement that application is acceptable. However, if circumstances change or the company realises that it is not entitled to apply for striking off, the application must be withdrawn using the prescribed form (form DSO2) which must be signed by any director and sent to the registrar.

If no objection has been made to the striking off and/or the application has not been withdrawn, the Registrar will strike the company off the register not less than two months after the notice referred to above has been placed in the London Gazette.

The company will be dissolved when the Registrar publishes in the London Gazette notice that the company has been struck off. Once the company is struck off and dissolved, it is no longer considered a legal entity until and unless it is restored to the Registrar.

Please note that a dissolution does not dispose of any creditors and that a potential liability of a director, managing officer and member of the company continues and may be enforced as if the company had not been dissolved.

The court retains the power to wind up a company whose name has been struck off the register.

3. Miscellaneous

It is an offence:

(a) to apply when the company is ineligible;

(b) to provide false or misleading information in, or in support of an application;

(c) to fail to copy the form of application to all eligible parties (members, creditors, employees, managers or trustees of any employee pension fund and any directors who have not signed the form) within seven days of the date of the application or the date upon which the party becomes eligible; and

(d) not to withdraw the application if the company becomes ineligible after the initial application.

The notification requirements do not apply if the application is withdrawn before the end of the period for giving the copy application.

4. Possibilities of restorations     

It is possible to restore a company and bring it back to life, however it is a lengthy and costly process, thus careful consideration should be given before finalising the striking-off process. There are two different ways of obtaining restoration: (1) By application to Court or (2) by an administrative restoration (without application to court):

(a) Restoration might be obtained by a Court order following an application made by any former member, creditor or anyone having interest in the matter. A number of documents must be submitted to the registrar or solicitors dealing with the assets and a number of evidence are required by the Court. Costs and penalties may also be imposed.

(b) Administrative restoration of a company that no longer carried out business may be requested only by former directors or former members in few circumstances. An application must be sent to the Registrar of Companies and a number of costs and expenses might be imposed.

(c) Application for restoration must normally be made within 6 years of the date of dissolution. A restored company is deemed to have continued in existence as if it had not been struck off the register.

The material contained in this guide is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

© Miller Rosenfalck LLP, February 2017

[1] Voluntary application to strike off a company has also been available to public limited companies since 2009.

Please contact:

Steen Rosenfalck

DD +44 (0)20 7553 9931

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