The introduction of the Small Business, Enterprise and Employment Act 2015 (“SBEEA”) has brought in wide-reaching changes to various aspects of Company and Insolvency law. One change that may have slipped under the radar for directors intending to dissolve a Company is the acceleration of the timescale of the procedure for striking-off a Company from the Companies Register.
The amendment to the voluntary strike-off procedure is set out at section 103(4) SBEEA and amends section 1003 of the Companies Act 2006 (“CA 2006”) by reducing the minimum period that Companies House has to wait to strike off the relevant Company from its register (assuming there is no reason to delay) to not less than two months. The Company is then declared dissolved by the publication of a further notice in the Gazette. It is important to note that this change only applies where the application has been accepted in the first instance by Companies House and where the application to strike-off is made by a company on or after 10 October 2015 – any applications made before this time will still be subject to the previous three month time period.
This change will come as welcome news to directors of group or holding companies with inactive subsidiaries; simplifying the production of annual accounts, limiting directors’ liability, and streamlining group restructuring in anticipation of, or following, a sale.
Creditors should also take note of this change as it effectively serves to reduce the period within which they can bring an objection to the application to strike off on the basis that the company has outstanding contingent liabilities.
Section 103 SBEEA also brings changes to the applicable periods where the strike-off procedure is initiated by Companies House itself. Companies now only have 14 days within which to respond to the initial and follow-up letters from Companies House before a company can be struck off the register. This serves to effectively reduce the entire period for the procedure set out under the CA 2006 from a minimum of two months to thirty-two days
Boyes Turner's Corporate team are experienced in advising on the procedure for striking a company off the register, group restructuring and company sales/purchases. Please contact one of the team if you want to discuss any of these areas further.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.