Company Dissolution – Who can object to striking off?

When a limited company is dissolved and its name removed from the register at Companies House, directors must ensure that creditors are paid within 12 months of closure. This is a fundamental part of being eligible for dissolution, as the process is not available to insolvent companies.

If the company cannot pay its creditors in the required timescale, or is later found to have been insolvent at the time of dissolution, it is likely to be restored to the register. The company’s directors are required to sign a declaration of solvency as part of the process, which brings into question whether they deliberately evaded their financial obligations to creditors.

If the objections are upheld, the company can be restored to the register as if dissolution had never taken place. So who can object to a company being struck off, and what happens when the company owes money?

 

 

 

Who can object to company dissolution, and under what circumstances?

Anyone connected to the business can object to its dissolution - this generally includes shareholders, creditors, and employees. A number of circumstances can lead to an objection, including:

• Failing to inform all the necessary parties that the business is being dissolved
• Directors falsely declaring solvency, whether deliberately, or as the result of accounting inaccuracies
• An employee wishing to take legal action against the company, or a creditor beginning legal action to wind up the company
• It is suspected that directors have committed fraud, or traded unlawfully
• A part of the closure process has not been followed – this could include failing to cease trade, or changing the company name during the three months prior to the application.

How do those objecting know the company is being dissolved?

The company must inform all interested parties of the intention to close, by sending a copy of the application form within seven days of its completion. A notice is also placed in the Gazette, alerting creditors and other connected parties to the company’s proposed closure.

As it is possible to search the Gazette for closure notices, it is easy for anyone with an interest to find out that the company has applied to be struck off.

How are objections made?

Objections can be emailed or sent by post to the Registrar of Companies at Companies House. Making an objection effectively suspends the dissolution application made by the company until the situation has been investigated further – usually for between three and six months.

 It is worth noting that, if a creditor is owed money, they can object to the company’s dissolution even after it has been removed from the Companies House register, as long as they can provide proof that the debt exists.

What happens if the objections are upheld?

If Companies House upholds the objection, dissolution does not take place. Should the company already have been dissolved, it will be restored to the register and investigations begun into directors’ actions leading up to the dissolution.   

Limited company directors can be disqualified for up to 15 years for misconduct, and in serious cases of fraud, may receive a prison sentence.  

If you are considering company dissolution, or want to object to an application, Begbies Traynor can offer professional guidance. We will explain your options, and ensure you follow the correct procedures. Contact our team of experts for a free same-day consultation – we work from offices around the nation.