What Is a Final Gazette Notice of Compulsory Strike-Off?
A “Final Gazette dissolved via compulsory strike-off” notice advertises that a company has been dissolved. This means the company has been struck off the Companies House register, ceasing its existence as a legal entity.
Naturally, this can be very alarming for unsuspecting company directors and creditors. Directors face losing their business, while creditors face losing the money they’re owed.
In this guide, we’ll explain the strike-off process, the consequences of dissolution, and what you can do about a final Gazette notice.
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What Is Company Strike Off?
Company strike-off is similar to liquidation in that it brings about the end of a business.
The business is “struck off” the Companies House register, meaning it ceases to exist as a legal entity. This can either be done voluntarily by directors or compulsorily by Companies House itself.
Voluntary strike-offs can occur when directors seek to move on from the company – or when they try to ditch their debts – while compulsory strike-offs result from not meeting Companies House regulations (not filing accounts on time, etc.)
When Does a Final Gazette Notice Occur?
As the name suggests, a final Gazette notice is the final stage in the strike-off process.
The strike-off process itself is quite straightforward.
It begins with a first Gazette notice. This is an advertisement placed in The Gazette, the UK’s official public record, warning of the company’s impending dissolution. This is published 3 months before the company is removed from the register. During this time, interested parties – such as creditors – have the opportunity to object.
If no objections are received by the end of the 3-month notice period, the company is struck off the register. A final Gazette notice is then placed in The Gazette to advertise its closure.
What Are the Potential Consequences of a Final Gazette Notice?
The consequences of a final gazette notice vary depending on whether you’re a company director or creditor. Directors face legal and financial fallout, whereas creditors face losing what is owed to them.
Consequences for Directors
Assets Assumed by the Crown
The most immediate (and perhaps grave) consequence for directors is the loss of the company’s hard-earned assets.
When a company is struck off, is ceases to exist as a legal entity; this means that any assets that the company owns itself are left without a legal owner. These are known as “bona vacantia”, meaning “vacant goods”.
In the UK, when goods are left without an owner, they are automatically assumed by the Crown. This means that if you have your company struck off unexpectedly and haven’t transferred ownership of its assets, you will lose them.
Loss of Limited Liability
Normally, when you’re trading as part of a company, you are granted the protection of limited liability. This means that any liabilities are limited to the company itself, meaning you cannot become personally responsible for company debts.
However, company dissolution means that there is no company – this means that there is no limited liability.
If you carry on trading, you will be personally liable for any debts incurred by the business. This can have some dramatic personal consequences, forcing those unable to repay these debts into entering an IVA or declaring bankruptcy.
Could Face Civil Charges
Some directors struggling with company debts they cannot afford to repay actually welcome company strike-offs as a cheap way to deal with their problems.
No more company, no more debts.
However, strike-offs do not handle the disposal of assets correctly and leave creditors in the lurch. These disgruntled creditors may then seek to have the company restored so that they can force it into liquidation to get what they’re owed.
If this happens, an investigation will be opened up, looking into the director’s conduct. This will likely result in misfeasance charges as the director has failed to protect the interests of the company’s creditors.
Directors found liable for misfeasance can face a number of penalties:
- Made personally liable for company debts
- Hit with large fines
- Disqualified from acting as a director for 2-15 years
These penalties can have severe consequences for directors. If unable to pay the fines or company debts, they could be forced into entering an IVA or declaring bankruptcy. Disqualification from directorship can also have a huge impact on your future career plans.
Consequences for Creditors
Unable to Chase Debts
An unexpected strike-off only has one consequence for company creditors, but depending on the amount of money you’re owed, it can be quite a serious issue.
When a company owes you money, the liability of this debt is limited to the company itself. This means that directors do not automatically become responsible for this amount. If the company is to suddenly cease its existence as a legal entity, you will be left without a legal body to pursue.
As a result, you’ll be unable to collect what you’re owed.
Can You Object to a Strike Off?
It’s possible to stop a company strike off if you act before it is dissolved.
If you’re a company director, you’ll need to remedy whatever issue Companies House has flagged up as the reason for the strike-off. This may involve you filing your accounts, appointing a director, or updating your current office address. Simply notify the Companies House registrar you have addressed the issue, and the strike-off will be stopped.
If you’re a company creditor, you’ll need to object to Companies House. You can do this by emailing enquiries@companieshouse.gov.uk or by post. You’ll need to simply state why you’re objecting, ensuring you provide some evidence. The evidence can’t be more than 6 months old.
If your objection is successful, the strike-off will be stopped. If not, it will be suspended for an additional 6 months, giving you time to act.
Remember, these options are only available to you if you act before the final gazette notice is published. Once the company has been dissolved, you can no longer object.
So what can you do about it if the company has already been dissolved?
Restoring a Dissolved Company
If you’ve got an issue with a company that’s dissolved, you can have it restored. How you do this depends on whether you’re a director or a creditor.
How to Restore Your Company
You’ll need to pursue what is known as administrative restoration to get your company reinstated.
There are a few criteria for eligibility:
- You must have been a director or shareholder
- The company must have been dissolved in the last 6 years
- It must have been actively trading when it dissolved
- You must not have struck the company off yourself
It costs £140 to apply for administrative restoration. You should receive a decision within 2 weeks.
How to Restore a Company that Owes You Money
If you need to get a company restored because it owes you money, you’ll have to do it by court order.
You must apply to have the company restored within 6 years. You’ll get the court’s decision within 15 weeks.
It’s important to remember that this is an expensive process; you’ll need to pay £280 to submit the claim, £308 in court fees, £300 to the Registrar of Companies, and the fees of your legal counsel.
If the court does restore the company, creditors in a liquidation will be paid in a certain order. Secured creditors, like banks, are paid first. Preferential creditors, like employees, are paid next. Finally, unsecured creditors are paid. Often, there is not enough money to repay unsecured creditors in full – in some cases, there isn’t enough to pay them at all.
Before pursuing court restoration, you’ll need to ensure that the company has enough assets to cover the amount you’re owed and the amount of the restoration itself. Our creditor services team can assist with this.
Speak to an Expert
If you’re concerned about a final gazette notice, you should speak to an insolvency practitioner as soon as possible.
Our team can inform you about the proper way to close down your company, ensuring that all your legal responsibilities are met.
Alternatively, if you’re a creditor, we can let you know how to pursue what you’re owed, ensuring that you don’t throw good money after bad.
Get in touch today to book a free consultation.
