Can an Insolvent Company Be Struck Off?
Why voluntary strike-off is not normally a substitute for dealing properly with an insolvent company's creditors.
Published by Hedwyn Ltd. General information for directors of companies registered in England and Wales.
What is voluntary strike-off?
Voluntary strike-off is an administrative route for removing an eligible company from the register. It is generally intended for companies that have stopped trading and meet the statutory conditions. It is not designed to avoid unpaid debts or creditor scrutiny.
Why insolvency changes the position
Creditors, including HMRC, may object to an application. An objection can stop the strike-off. Even after dissolution, restoration to the register may sometimes be sought, and directors' conduct or transactions may still be examined.
Questions to consider
- Does the company owe creditors or tax?
- Has it traded, changed its name, sold assets or carried out other restricted activity during the relevant period?
- Have creditors, employees and other required parties been notified?
- Are there assets, refunds, claims or records that still need to be dealt with?
- Is liquidation or another formal process more appropriate?
What to do now
Prepare an accurate asset and liability position, preserve records, identify every creditor and obtain advice if debts cannot be paid. Do not submit an application containing information you know is incomplete or misleading.
Strike-off and liquidation are different
Strike-off removes an eligible company administratively. Liquidation is a formal process in which an insolvency practitioner may realise assets, deal with claims and report as required. The right route depends on the company's circumstances.
Related guidance
General information for directors of companies registered in England and Wales; not legal or insolvency advice.
This guide is general information, not legal, financial, accounting or insolvency advice. See how our content is prepared.