Objection to company strike off

Author
Shaun Barton | Company Closure Expert

Objection to company strike off – what next?

Making an application to strike off a company isn’t always straightforward, and it’s possible that someone could make an objection. This means that the application will not proceed until the issues are resolved.

If such a challenge delays your application, you should contact Companies House to find out the background to it. So what are some of the common reasons for objecting to company dissolution?

Why are objections made to company strike off?

Common reasons for objecting to a strike-off include:

A creditor making a claim against the company for repayment of their debt
Other forms of legal action are ongoing
The company not fulfilling its filing obligations
Making mistakes on the application form or failing to follow the strike-off process correctly

When you make an application for strike-off you need to inform all creditors of your intention to close the business. An advert is also placed in the Gazette, which is the official public record of statutory notices.

HMRC and the banks regularly check the Gazette for notices regarding company strike off, and this allows them to object if they’re owed money by the business. If HMRC objects and the matter isn’t resolved to their satisfaction, they could attempt to liquidate your company, which could trigger an extensive investigation into your actions as a director.

The high street banks also often object to strike off if a Bounce Back Loan is outstanding. This is because, if the company is liquidated rather than dissolved, they can invoke the government guarantee under the Bounce Back Loan Scheme, and recoup their money.

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How can an objection be resolved?

When an objection is made a hold is placed on the strike-off application until the matter is resolved. You have various options for dealing with a challenge depending on the reasons for the objection.

These might include:

Negotiating with a creditor to repay in instalments
Paying the debt in full and resubmitting the application
Disputing the debt if you have a valid reason to do so
Placing the company into voluntary insolvent liquidation – a process called Creditors’ Voluntary Liquidation, or CVL

It’s worthwhile proceeding with caution if you decide to pay the debt in full, as there may be a risk of making a ‘preference payment.’ If other creditors come forward and you don’t repay their debts in the same way, it could lead to accusations of misfeasance.

If a strike-off objection is upheld, the company will remain on the Companies House register. It’s also worth noting that, should a strike-off application go through and a creditor later comes forward, the company can be restored to the register and treated as if dissolution hadn’t taken place.

For more information on strike-off objections and your potential options in this situation, please call our expert team at Company Closure. We offer free advice and operate a network of local offices around the country.

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