2020-04-22
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Companies House suspends policy of striking off non-compliant businesses

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Posted by Caroline Benfield on 22 April 2020

Caroline Benfield Partner

On 16 April Companies House announced that it was temporarily suspending its policy of striking off companies that do not comply with their legal responsibilities, such as filing their accounts on time or failing to register a change in registered address. This is an additional measure to help businesses struggling to cope with the financial and administrative pressures caused by the coronavirus pandemic, coming hot on the heels of the 3-month extension to the filing deadline for accounts. At the time, the Business Secretary, Alok Sharma, noted that “…it is important that our support is not limited to financial assistance. We are determined to help businesses in any way we can, so that they can focus all their efforts on dealing with the impact of Coronavirus”.

Changes to strike-off policy, involuntary and voluntary

Acknowledging that most businesses have been knocked off course by the government’s response to curbing the spread of COVID-19, the Secretary of State has committed to keeping the situation under observation and introducing further changes to help business as needed. The changes in the strike-off policy have been prompted, rather like the changes to wrongful trading, by a desire to stop otherwise viable businesses being dissolved. As a result, Companies House will:

  • Pause the strike-off policy and give companies time to get up to speed with their administrative requirements;
  • Continue to write to companies that have failed to file accounts, or a confirmation statement, but not publish its intention to strike off non-compliant companies in the Gazette as per its usual practice;
  • Continue to publish notices in the Gazette for those companies applying voluntarily to be struck-off the Companies House register but will take no further action;
  • Allow time for those who may wish to object to a company’s voluntary application to be struck off to do so.

It should be noted that none of the above will apply to those companies that have already entered administration or liquidation.

Sympathetic treatment of appeals against late filing penalties

Given the issues some companies are experiencing with remote working and restricted access to documents stored in offices, the earlier announcement of a 3-month extension to the deadline for filing accounts will no doubt be welcomed by many. This extension is immediate, and automatic, but companies must apply for it. In additional support, Companies House has also agreed to treat appeals against late filing penalties sympathetically for those companies that can attest that late delivery of their accounts was coronavirus-related:

  • Companies will be given a break from late filing penalties;
  • Companies will be offered a payment plan for late filing penalties.

Temporary but vital measures

Although these measures will provide temporary respite for businesses trying to keep all their plates spinning, they will be kept under review therefore it is advisable, where possible, for companies to try and fulfil their responsibilities by the given deadlines. Alok Sharma confirmed that the government will continue to monitor what is being filed and will consider further extensions if necessary. This pragmatic approach by the government is to be applauded as the economic health of the country relies on as many businesses as possible emerging in one piece from this crisis.

About the author

Caroline advises on all aspects of contentious and non-contentious personal and corporate insolvency matters.

Caroline Benfield

Caroline advises on all aspects of contentious and non-contentious personal and corporate insolvency matters.

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