In April, as a response to the COVID-19 pandemic, Companies House introduced temporary measures to its enforcement powers against companies that fail to comply with their statutory filing obligations. Those measures included:
- Pausing the strike of process to prevent companies from being dissolved; and
- Treating late filing penalty appeals sympathetically where the late delivery was caused by COVID-19.
This was in addition to the previously announced three-month extension for companies to file their accounts.
Strike Off Process to Resume
Companies House was at pains to be clear that these measures are only temporary and remain under regular review. As a result of the most recent review, they have now announced that the measure to suspend the compulsory strike off process will be lifted from 10 October 2020.
From that date, Companies House will resume the process of removing companies from the register if there is reasonable cause to believe that the company in question is no longer carrying on business or in operation. These measures are usually taken in response to companies failing to comply with their statutory obligations to file their annual accounts or confirmation statement on time.
During the pandemic, Companies House has continued to write to companies that failed to comply with their statutory filing requirements, but it has not proceeded to strike a company off where the filing remained outstanding. That will now change and, as of 10 October 2020, where a company fails to take action following receipt of reminders from Companies House, a notice will be published in the Gazette to tell the public that the registrar intends to strike the company off. Once the notice has been published in the Gazette, there is a two month period during which objections can be raised. If no objections are forthcoming, then the company will be struck off soon after the expiry of that period.
In addition to compulsory strike off action, Companies House will also resume processing voluntary strike off action (where a company wishes to dissolve itself) from 10 September 2020.
Both compulsory and voluntary strike off action was paused in order to protect those who may wish to object to a company being dissolved, for example because they are owed money by that company.
When a company is dissolved, all property and rights held by the company immediately before its dissolution are deemed to be ‘bona vacantia’ – meaning they become the property of the Crown. Now that Companies House has announced its intention to resume enforcement of its compulsory strike off process, it is vitally important that companies who wish to hold on to their assets and avoid being struck off ensure that they are complying with their obligations to file accounts and confirmation statements.