First Gazette Notice for Compulsory Strike Off Overview
What is a First Gazette Notice for Compulsory Strike Off? The First Gazette Notice for Compulsory Strike Off is a notice published in the Gazette being the first stage initiated by Companies House to have a company struck off the register at Companies House. A company being struck off means the company no longer exists and therefore unable to trade.
The First Gazette Notice for Compulsory Strike Off is a public notice issued by Companies House as a warning to a company that it is at risk of being struck off. It gives the company an opportunity to address whatever has caused the notice to be issued.
A Limited liability company is a separate legal person in law to the individuals that run it. It has legal responsibilities each year that flow from its existence to file documents, in particular its Accounts and Confirmation Statement. A failure to file Accounts on time at Companies House or a breach of the duty to file Confirmation Statements under Section 853A of the Companies Act 2006 can trigger a First Gazette Notice for Compulsory Strike Off.
Typically Companies House will issue a letter to the company warning it that there are outstanding filing matters that are in need of rectification. However, if the company does not take action to address the breach of regulation then Companies House will start the Compulsory Strike Off procedure.
Why Action Needs To Be Taken Following A First Gazette Notice
Action needs to be taken following a First Gazette Notice because it typically arises following a criminal offence by the company Directors’ failure to file Accounts (Section 451 of the Companies Act 2006) or a Confirmation Statement (Section 853L of the Companies Act 2006). If no action is taken to address the breach criminal proceedings can arise in addition to the company being struck off.
If a company is struck off then its assets are forfeited to the Crown in what is known as Bona Vacantia in light of Section 1012 of the Companies Act 2006 and the shareholders in effect lose their investment.
For all of those reasons if a company no longer is needed and it is the wish of the owners to close it down then it is in the interests of its shareholders to adopt the proper procedures for winding up a company. In the case of a solvent company that usually means using a Members Voluntary Liquidation. This can be a useful method to close down a company as it is tax efficient, particularly if Business Asset Disposal Relief (formerly known as Entrepreneurs Relief) is available to the shareholders following a distribution by a Liquidator of the company’s assets.
In the case of an insolvent company that usually means using a Creditors Voluntary Liquidation procedure or even having it go into Compulsory Liquidation.
Whether you use a Members Voluntary Liquidation or Creditors Voluntary Liquidation to close your company you will need the services of an Insolvency Practitioner to act as the Liquidator.
What Is The Purpose Of A First Gazette Notice For Compulsory Strike Off?
The purpose of the First Gazette Notice is twofold. Firstly to put the company’s Directors on notice of the need to address and correct a breach of Companies House regulations. Secondly, it is to notify third parties such as shareholders or creditors who may have a stake or be owed debts by the company that it is at risk of being struck off.
This will enable them also to take action such as objecting and pursuing the debt by issuing a Winding Up Petition for the company to be placed into Compulsory Liquidation for it to be formally subject to an orderly winding up by a Liquidator.
Objecting To A First Gazette Notice For Compulsory Strike Off
Anyone with an interest in the company can raise an objection to it being struck off.
Creditors that are owed money can object to a limited company being struck off within two months to the First Gazette Notice. A failure to do so will mean the creditor loses the opportunity to pursue the outstanding debt unless they then apply to reinstate the struck off company back to the register via an application to the Court for it to be the subject of a Winding Up Order and placed into Compulsory Liquidation.
If objections are raised then Companies House will usually temporarily halt the strike off process whilst it investigates the nature of the objection.
A creditor can normally object twice to a company being the subject of a Compulsory Strike Off which can extend to two periods of three months. Companies House will expect the creditor to show documents evidencing the debt. If however, the creditor does not take action within typically the six-month period to wind up the company it usually will promptly then be struck off (also known as being dissolved).
The Directors can usually stop the dissolution process by filing the necessary Accounts, Confirmation Statements and paying any fees.
Appealing Against A First Gazette Notice For Compulsory Strike Off
There are three typical grounds for appealing against the First Gazette Notice as follows:
Trading
If a company is still trading then it can look to appeal the notice by supplying evidence of its business activities. This may involve the supply of company documents such as invoices, bank statements and contracts.
Notice Issued In Error
It is possible the notice of First Gazette was issued in error. If that is the case it should be a relatively simple procedure to show Companies House of its error and have the notice withdrawn.
Notice Is Unfair
In some circumstances there may be grounds to appeal the notice on the basis of unfairness or that it is disproportionate. The nature of such an appeal can be troublesome because it is based on attempting to appeal against a process that is triggered by black-and-white issues.
A failure to file documents such as Accounts and Confirmation Statements (the most common reasons for the First Gazette Notices) either has been done or has not been done. The obligation to file them is mandatory meaning the correct procedure is to remedy the breach to eliminate the effects of the threat of strike-off.
In order to appeal you need to lodge this with Companies House using the contact details available on its website that are set out in the above objection to strike off of a Limited company page. It is a good idea to get professional advice so that the appeal is properly reasoned.
Errors To Address When In Receipt Of A First Gazette Notice
The following are common errors that should be avoided when dealing with a First Gazette Notice:
Accounts And Confirmation Statements
Perhaps the most common error when dealing with a First Gazette Notice is the failure to file the Accounts or a Confirmation Statement. As a result, the filing of such documents should be quickly addressed to prevent matters from escalating toward dissolution.
Avoiding The Notice
If the First Gazette Notice is avoided or ignored then a company will be struck off. It is fatal for the company to ignore such a notice. It is essential it is addressed without any avoidable delay.
Responding To Companies House
Once a First Gazette Notice is received from Companies House it must be addressed expeditiously. It is crucial that Companies House notices and correspondence are responded to without any avoidable delays arising.
Outstanding Fees
If Companies House are owed fees then following receipt of the First Gazette Notice they will need to be paid by return to ensure that dissolution action is stopped quickly and the risk of the company being struck off is eliminated.
