Active Proposal To Strike Off: What It Means for Your Company

If you have ever looked at the online information held by Companies House then you will likely seen the phrase "active proposal to strike off" but do you know what it means? I often wondered what it meant and whether it was something that could happen to me.

In the event that a company is given such a sanction, it usually means that Companies House is beginning the process of removing the company from its register and close the company down.

Such a situation should be taken seriously and its key to understand why its happened and what steps can be taken.

What Is an Active Proposal to Strike Off?

An active proposal to strike off is the first step in a process of removing a company from the Companies House register. This typically happens when a company is no longer needed or has stopped trading.

Definition and Overview

When I see the term "active proposal to strike off", it means that an official request has been filed to close a company. This can be done by the company directors or by Companies House itself. The aim is to dissolve the company and remove it from the register.

Once this proposal is made, Companies House notifies the public and interested parties through a notice published in The Gazette. There is a period for anyone, such as creditors or employees, to object. If there are no valid reasons for stopping the strike off process, then the company will be struck off after a set time and will (in legal terms) no longer exist.

Keep in mind that just because a company has been labelled with an “active proposal to strike off”, it doesn’t mean the company has been closed down yet. It simply means the process to remove it has begun.

Key Differences From Compulsory Strike Off

An "active proposal to strike off" often comes from the company itself, while a compulsory strike off is started by Companies House. I find that the main reason for compulsory strike off is usually because the company hasn’t filed important paperwork, like annual accounts or confirmation statements.

When directors apply for strike off, the process can feel more controlled, as they start it on their own. On the other hand, a compulsory strike off can happen without the directors’ agreement if they don’t meet legal requirements. In both cases, objections can be made, but the reasons for starting each process are different.

Relevant Legislation and Guidance

The process is mainly covered by the Companies Act 2006. Sections 1003 to 1005 are most relevant if I want to check the legal rules. These sections explain how a company can apply for voluntary strike off and who should be informed.

Companies House gives clear steps and timescales, which I find helpful. The official guidance also explains how objections work and what directors must do before starting the process, like making sure there are no outstanding debts or legal actions.

If I want more help, I can check the Companies House website or speak to a legal adviser. This makes it easier to understand and follow the right steps.

Reasons for a Company Strike Off Proposal

A company can be proposed for strike off for several common reasons. The most common ones relate to stopping business by choice or simply having no activity at all.

Voluntary Cessation of Trading

I might choose to close my company if I've decided I do not want to trade anymore. Maybe my business has achieved what I wanted, or the market has changed. Sometimes it's just not worth the effort or money to keep going.

If I have paid all my debts and distributed any leftover assets, I can ask Companies House to strike off my business. This way, I avoid filing yearly accounts and paying unnecessary fees.

It's a formal process, and I must tell anyone who might be affected, including HMRC, staff, and creditors. I also need to make sure there are no ongoing legal disputes, as these can stop the strike off from happening.

Lack of Company Activity

When a company is no longer active—meaning it's not trading, earning income, or holding assets—it may be proposed for strike off. I might see this happen if I've left a company dormant for a while without doing anything to bring it back.

Sometimes Companies House will start this process if I haven’t sent annual accounts or statements. It’s a way to clear out companies that are just sitting there, taking up space in the records.

I need to watch for official letters or emails. If I want to keep my company, I have to respond quickly and update my records. If I ignore it, the company can be dissolved even if I didn't plan for it to happen.

The Step-by-Step Process

When a company wants to close down, there are clear steps it has to follow by law. I’ll talk you through how to start the process, fill in forms, and what happens after the application is sent in.

Filing a DS01 Form with Companies House

The first thing you have to do is fill in the DS01 form. This is the official document to ask Companies House to remove the company from the register.

You need the signature of most directors. If there are two or more directors, more than half must sign. If I am the only director, just my signature will do.

Here's a quick checklist:

1. Download the DS01 form online.
2. Fill in my company details and sign.
3. Pay the current fee (usually about £10).

You have to send the completed DS01 to Companies House by post or online if possible. After it’s submitted, Companies House will let me know by letter so I can be sure it's received.

Publication in the Gazette

Once my DS01 form is accepted, Companies House puts a notice in The Gazette, which is a public record. The notice tells everyone that my company is applying to be struck off.

It’s important because creditors and anyone else who is owed money now have three months to object. The company directors must also let anyone who might be affected know, including employees, creditors, and shareholders.

If nobody objects within three months, Companies House will then strike off my company officially. My company is dissolved and stops existing legally. I need to make sure all business is stopped before the Gazette notice goes out.

Implications for Directors and Shareholders

When a company faces an "active proposal to strike off," both directors and shareholders need to know how this affects their rights and obligations. I find it helps to break down the main points, so each person knows what they may face during the process.

Duties and Responsibilities

As a director, I have specific duties when my company is under threat of being struck off. I must make sure all filings are up to date, and that the company’s accounts, confirmation statements, and tax returns are submitted. I can't just ignore this process, since Companies House will continue with the strike off if I don’t respond.

I have to tell creditors, employees, and shareholders about the proposal. If the company owes money or has unresolved business, I should not let it be struck off until everything is sorted. Ignoring claims or hiding assets could mean I get investigated later. I could become personally liable for company debts if I don’t follow the proper rules or if the strike off was done in a dishonest way.

Here's a quick list of what I need to remember:

1. Notify everyone with an interest in the company.
2. Keep all records up to date.
3. Pay off debts and finish company business.
4. Seek advice if any problems come up.

Distribution of Company Assets

If the company gets struck off while it still owns assets, those assets don’t stay with me or the shareholders. Instead, under UK law, they become property of the Crown. That means I could lose money or property that the company still held at the time of strike off.

To avoid that, I need to make sure all assets—like cash, equipment, or property—are distributed to shareholders before the company is struck off. That means following the proper process, making sure all debts are paid, and showing the correct paperwork for asset transfers.

If there's more than one shareholder, distributions should be fair and in line with what each person owns in the company. Not sorting this out before the strike off could mean nobody gets those assets back later. Sometimes it’s possible to restore the company, but it’s time-consuming and may not always work. So, I should act early and get everything sorted long before the strike off is complete.

Impact on Creditors and Third Parties

When a company faces an active proposal to strike off, it can affect more than just the business owners. Creditors, suppliers, and anyone owed money may risk losing what they are due if the process goes unnoticed or unactioned.

Notifying Creditors

Once the company applies for strike off, Companies House sends a notice to alert those who may be affected. Notices are also published in the Gazette, the official public record. This lets creditors, employees, and other interested people know what is happening.

As someone who may be owed money, I would need to pay close attention to these notices. I have only a limited time, usually two months from the date of the notice, to take action before the company is removed.

It’s important for creditors to read these notices quickly. Missing a notice could mean I lose out on getting paid, since striking off makes it hard to recover money later.

Objections and Stopping the Process

If I am a creditor or affected third party, I can object to the company being struck off. I must contact Companies House in writing with clear reasons. Common reasons include unpaid debts, ongoing legal actions, or disputes about the company’s activities.

Objections need to be sent soon after the notice appears, and I should include any evidence such as invoices, contracts, or emails that prove the debt or issue.

If my objection is accepted, the strike off process is put on hold. This gives me more time to sort out the problem or get paid. If my objection is rejected, I might need to explore other legal options like going to court.

Withdrawing or Objecting to a Strike Off

If I don’t agree with a company being struck off, there’s a way to object or withdraw the request. Taking action quickly is key, and the method depends on whether I’m the one who started the application or someone else is.

How to Withdraw an Application

If you sent in the application to strike off my company, but then change your mind, you can withdraw it. All you need to do is fill out form DS02 and send it to Companies House. This can be done either online or by post.

The company must not have already been dissolved for this to work. If my company still appears on Companies House’s website as ‘pending strike off’, I can submit the form. I need to act fast, especially if there are unpaid debts or legal actions happening.

If I worked with a professional or accountant, I make sure to tell them too. It’s important that everyone knows I have withdrawn the application. Companies House will update the public register once they receive my form.

Common Reasons for Objections

If you want to stop another company from being struck off, you can object to Companies House. Here are some common reasons:

1. The company owes me money.
2. There are ongoing court cases involving the company.
3. Investigations or complaints are still open.

You need to write to Companies House and explain my reason. It’s best to send supporting documents, like an invoice or legal letter. Companies House will then pause the strike off process and may ask for more evidence if needed.

Timing really matters. If you delay, the company might be removed, and it gets harder to fix the problem. I always check the dates in the public notice and act before the strike off deadline.

After the Strike Off Is Complete

When a company is struck off, it no longer legally exists. This can cause problems if people want to bring the company back or if there are still financial or legal matters to settle.

Restoring a Struck Off Company

If you want to bring back a company that was removed from the Companies House register, you have to follow a special process called “restoration”. There are two main ways to do this: by court order or by administrative restoration if it meets certain conditions.

To get a company restored by court, you usually need a good reason, like someone owing money or there being assets left. You must apply within six years of the strike off. Administrative restoration is simpler and only works if the company was struck off for not filing accounts or confirmation statements. You need to pay any outstanding fees and send missing documents to Companies House. If the restoration is approved, the company comes back as if it was never gone.

Record Keeping and HMRC Requirements

If the company had any tax debts when it was closed down, HMRC could take action to collect these debts. Directors can sometimes be made personally responsible for unpaid tax. You need to make sure all tax returns were filed and any Corporation Tax, PAYE, or VAT debts were settled before the strike off. If you don’t do this then it’s likely to cause problems later on.

Avoiding Common Mistakes

I often see people ignore warning letters from Companies House. If you don't respond, your company could be struck off even if you want it to stay open.

Missing deadlines is another easy mistake. Using a reminder tool or calendar to track these important dates is a good habit and avoids future mistakes.

I have (on occasion) forgotten to check if my company owes any taxes to HMRC. Here's a quick checklist I use:

1. Make sure all accounts are filed
2. Pay any late fees or penalties
3. Double-check HMRC debts

If you've got business assets left in the company, these can go to the Crown if I'm struck off. I always deal with assets before starting the strike-off process.

It's important that I keep my information up to date with Companies House. If they have the wrong address, you could miss important updates about my company.

When to Seek Professional Advice

Sometimes, I find things can get a bit confusing with company paperwork. If I’m not sure what an "active proposal to strike off" means for my business, I know it’s best to talk to a professional.

Here’s when I’d reach out for advice:

1. I get notice of a strike off and don’t know why.
2. I think there’s a mistake, but I’m not sure how to fix it.
3. There are debts or ongoing contracts, and I’m unsure what happens next.

A solicitor or accountant can explain my options. They can check if it’s safe to let the company be struck off or if I should stop the process. Sometimes, I might need to act fast to protect my interests.

If the company has assets, money, or property, I want expert help to make sure I don’t lose anything by accident. Mistakes here can cost me a lot.

Professionals can also help with paperwork. It saves time and trouble later.