Received an Involuntary Strike-Off Notice? What to Do to Avoid Company Dissolution
What to do if your company receives an involuntary strike-off notice from the CRO.
Receiving an involuntary strike-off notice from the Companies Registration Office (CRO) can be worrying, particularly if you are unsure why your company has received it or what you need to do next. The important thing is not to ignore it. An involuntary strike-off notice means the CRO has identified a compliance issue and started a process that can ultimately result in the company being struck off and dissolved. However, there is an opportunity to address the issue before that happens.
What Is an Involuntary Strike-Off Notice?
An involuntary strike-off is a process initiated by the CRO to remove a company from the register where certain statutory or filing obligations have not been met.
The CRO identifies several grounds for involuntary strike-off, including failure to file an annual return, certain Revenue non-compliance, failure to meet the EEA-resident director requirement, having no current directors recorded with the Registrar, and certain issues involving companies in liquidation.
The notice should state the reason for the proposed strike-off, the remedial action required and the date by which that action must be taken. It is the first step in a process that may ultimately lead to the company being struck off and dissolved.
Receiving the notice does not mean the company has already been dissolved.
Why Has My Company Received a Strike-Off Notice?
The specific reason should be set out in the notice you received from the CRO.
One of the main grounds is failure to file an annual return. A company may be struck off where it has failed to file an annual return for one year.
Other grounds can include:
- Revenue notifying the Registrar of a failure to deliver a required statement;
- failure to comply with the EEA-resident director requirement;
- certain issues involving a company in liquidation; or
- having no current directors recorded with the CRO.
The reason matters because the action required to stop the strike-off will depend on the particular compliance issue.
What Should You Do After Receiving the Notice?
If you receive an involuntary strike-off notice, work through the following steps as soon as possible.
Check why the notice was issued
Read the notice carefully and identify the ground for strike-off. The CRO notice should tell you what compliance issue needs to be addressed.
Check what is outstanding
If the issue relates to annual returns, check which returns and accompanying financial statements have not been filed. If the notice relates to another matter, establish exactly what information or action the CRO requires.
Complete the required remedial action
The CRO identifies different remedial steps depending on the reason for the strike-off. These can include:
- delivering outstanding annual returns to the CRO;
- delivering a required statement to Revenue;
- providing evidence that the EEA-resident director requirement is being met;
- providing required liquidator details and up-to-date statements; or
- notifying the CRO of the appointment of a director.
Where outstanding annual returns and accounts are the issue, the CRO states that filing them will halt the strike-off process.
Check the deadline
The notice will specify the date by which the required remedial action must be taken. The CRO states that this date must be at least 28 days after the date of the notice.
Do not leave the required filings until the last minute, particularly if several years of accounts or returns need to be prepared.
Make sure all relevant issues are dealt with
Do not assume that resolving one filing automatically resolves every compliance problem. Check that the specific remedial action identified in the notice has been completed.
If you are unsure what is outstanding or how the required filings should be prepared, seek professional assistance without delay.
Richard OShea Consultancy provides Annual Compliance Services to help companies keep their annual returns, financial statements and other company compliance requirements up to date.
How Long Do You Have to Act?
The deadline will be stated in your strike-off notice.
Under the CRO’s procedure, the date specified for taking the required remedial action must be at least 28 days after the date of the notice.
If the remedial action is not taken by the specified date, the CRO may publish a notice of its intention to strike the company off in the CRO Gazette. A further period of at least 28 days applies after that publication before the company can be struck off.
The deadline on your own notice is therefore important. Acting early gives you more time to identify and resolve any outstanding issues.
What Happens If You Ignore the Notice?
If the required remedial action is not taken, the CRO can continue the strike-off process.
The CRO may publish a notice of its intention to strike the company off in the CRO Gazette. If the issue remains unresolved, the company can ultimately be struck off and dissolved.
There can also be consequences for directors. The CRO states that, in relevant circumstances, the Corporate Enforcement Authority may apply to the High Court for the disqualification of directors of a company that has been struck off.
Can the Company Still Trade?
Receiving the initial strike-off notice does not itself mean that the company has been dissolved.
However, once a company is struck off and dissolved, it ceases to have legal existence. The protection of limited liability is no longer available if the business formerly carried on through the company continues after dissolution.
For a company that is actively trading, this makes it particularly important to address the strike-off notice before the process reaches dissolution.
What Happens When a Company Is Struck Off?
Once a company is struck off and dissolved, there can be serious consequences.
Company assets can become State property. The CRO states that the assets of a dissolved company become vested in the State.
The company ceases to have legal existence. The business can no longer operate through the dissolved company.
Liabilities do not necessarily disappear. The CRO states that the liability of a director, other officer or member can continue after dissolution and may be enforced as if the company had not been dissolved.
This is why dealing with the original notice is preferable to allowing the company to reach the dissolution stage.
Can a Struck-Off Company Be Restored?
In some circumstances, a struck-off company can be restored to the register.
Where the company has been struck off for no more than 12 months, an application for administrative restoration may be made to the Registrar, subject to the relevant requirements. After 12 months, restoration generally requires a court order.
Restoration can therefore be possible, but it is much better to address the underlying compliance issue before the company is dissolved.
How We Can Help
If your company has received an involuntary strike-off notice, we can help you identify the outstanding compliance requirements and take the necessary steps to bring your company up to date.
We can assist with CRO compliance, outstanding annual returns, financial statements and related company compliance requirements, helping you address the issues identified in the strike-off notice.
If you are unsure what needs to be filed or how to deal with your company’s outstanding obligations, get in touch with Richard OShea Consultancy to discuss your situation.
Final Thoughts
Receiving an involuntary strike-off notice does not mean your company has already been dissolved, but it does mean action is required. Understanding why the notice was issued, dealing with the outstanding requirements and meeting the stated deadline are important steps in preventing the process from progressing.
If you have received a strike-off notice, do not ignore it. Getting professional advice early can help you address the issue before it leads to company dissolution.
This article is intended for informational purposes only and should not be considered a replacement for professional advice. The author(s) disclaim any liability for actions taken or not taken based on the content of this document. It is recommended to seek tailored advice before making any decisions related to the topics discussed in this article.
Frequently Asked Questions
1. What is an involuntary strike-off?
An involuntary strike-off is a process initiated by the CRO to remove a company from the register where certain statutory or filing obligations have not been met. It is different from voluntary strike-off, which is initiated by the company.
2. Why has my company received a strike-off notice?
The reason should be stated in the notice. Failure to file an annual return is one possible reason, but there are several other grounds for involuntary strike-off.
3. What should I do after receiving a strike-off notice?
Check the reason for the notice, identify what is outstanding, complete the required remedial action and make sure everything is dealt with before the deadline stated in the notice.
4. How long do I have to respond?
The notice will specify the deadline. Under the CRO procedure, the date for taking the required remedial action must be at least 28 days after the date of the notice.
5. Can I stop my company from being struck off?
In many cases, yes. The appropriate remedial action can halt the process. For example, the CRO states that filing outstanding annual returns and accounts will halt the process where these are the relevant issue.
6. What happens if I ignore the notice?
The CRO may proceed with further notices and ultimately strike the company off and dissolve it.
7. Can a struck-off company be restored?
Yes, restoration may be possible depending on the circumstances and how long the company has been dissolved. Administrative restoration may be available within 12 months; after that, a court order is generally required.
