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Striking off a company

Can an application be made to strike off an insolvent company?

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I recently took on two companies as clients which are related as they are both owned by the same individual. Company A is trading but had supported Company B over a number of years in a venture that never succeeded. As a result there is a large intercompany balance between the two. Provision will need to be made in Company A which may give it negative reserves though it is otherwise profitable. The owner has asked what to do about Company B. My immediate answer is that accounts and tax return should be submitted to HMRC and any liability paid (likely to be nil), then application can be made to strike off.

When I have looked at striking off in context of large groups we had always managed to have a positive balance sheet and I had always presumed there was some rule to this effect. This could be achieved in this case by a deed of release of the debt and I cannot see any tax issues as the companies are connected. But does this have to be done or can an insolvent company be struck off as long as the sole creditor does not object?

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By David Heaton
06th Nov 2019 19:11

Yes, but you have to forewarn all the creditors (amongst other requirements).

https://www.gov.uk/strike-off-your-company-from-companies-register

Don't forget to ensure all ct loss relief has been reclaimed and received before you close the bank account, which is a step you must take before striking off.

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RLI
By lionofludesch
07th Nov 2019 09:49

I would imagine that 89.7% of companies being struck off have one or more creditors who are resigned to writing off their debt.

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By Ian Bee
07th Nov 2019 10:36

Thanks for the replies. Agreed that all the creditors need to be informed of the strike off application.

On a practical note, we should also make sure we get all our fees paid in advance, prior to closing the bank account.

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Replying to Ian Bee:
RLI
By lionofludesch
07th Nov 2019 10:45

Ian Bee wrote:

Thanks for the replies. Agreed that all the creditors need to be informed of the strike off application.

On a practical note, we should also make sure we get all our fees paid in advance, prior to closing the bank account.

Or get someone else to agree to pay them. Which is the more usual course of action, bearing in mind that the company is usually potless.

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