Updates from Companies House as the Economic Crime and Corporate Transparency Act 2023 (ECCTA) continues its roll out!

Updates from Companies House as the Economic Crime and Corporate Transparency Act 2023 (ECCTA) continues its roll out!

Companies House has published updated guidance on the circumstances in which a company can be struck off the register and dissolved, reflecting a number of recent reforms made ECCTA, which have been summarised below. 

Strike off by the registrar

There are now three circumstances in which the registrar may initiate action to strike off a company:

• Company formed on a false basis

Under the new powers, the registrar may strike off a company where they have reasonable cause to believe that the company was formed on a false basis. The registrar may form this opinion where they believe that information in the company’s application for registration, or any statement made in connection with that application, is materially misleading, false or deceptive.

• Company does not have an ‘appropriate’ registered office address

ECCTA introduced a requirement for all companies to have an ‘appropriate’ registered office address. The address must be that in the ordinary course of events, a document addressed to the company would be expected to come to the attention of a person acting on behalf of the company. In addition, the delivery of documents to the address must be capable of being recorded by obtaining an acknowledgement of delivery.

If the registrar believes an address used by a company does not meet this requirement, they may change the company’s registered office address to a default address maintained by Companies House.

If the company does not then either appeal that decision or, within 28 days, change the registered office from the default address to an ‘appropriate’ address, the registrar may strike off the company.

• Company no longer in operation

The registrar has always had the ability to strike off a company if they believe it is not in operation. In particular, they are likely to do this where the company has no directors or where it fails to submit its annual filings.

Whatever the case, the registrar will give notice of its intention to strike off the company. That notice will be placed on the company’s public record and published in the Gazette.

Depending on the reason for the strike off action, the company could stop the process by providing evidence to the registrar that it is still in operation (and bringing its filings up to date), by providing evidence to show that the registrar did not have cause to believe it had been formed on a false basis, or by changing its registered office to an appropriate address, however if the directors fail to do this, the company will be struck off and dissolved not less than two months after the notice is published in the Gazette.

Voluntary strike off

In addition to the registrar’s ability to initiate the strike off process, if a company is no longer needed, its directors may apply for it to be voluntarily struck off. The application can only be made three months after the company has ceased all activities, other than ones which are necessary to make the strike off application, conclude the company’s affairs or comply with a statutory requirement.

Once the application is made, the company must send a copy of the application to its shareholders, creditors and employees. To guard against fraudulent applications, the registrar will send an acknowledgment of the application and notify the company at its registered office.

It will also place a copy of the notice on the company’s public record and publish it in the Gazette. Assuming no objection is raised, the company will then be struck off and dissolved not less than two months later.

The extension of the registrar’s powers to strike off companies is the latest ECCTA measure, which is aimed at improving the integrity of the public register of companies.

Directors of companies that wish to carry on operating need to ensure they are not caught out by keeping their filings up to date and ensuring they have an ‘appropriate’ registered office address.

If a company is struck off, the consequences can be severe. In particular, any assets held by the company will go to the Crown as ‘bona vacantia’ (or vacant goods). Whilst there is a process for restoring a dissolved company, it would be better to avoid the related complications, expense and business disruption caused by this.