A first gazette notice is a public announcement that a company is undergoing compulsory strike off action by Companies House. It is typically published when a company is in breach of statutory requirements such as not filing annual accounts, confirmation statements and/or not updating their registered address. If a company does not rectify this within the allotted time frame, it can be dissolved. This is a serious business matter, as once a company is struck off it ceases to exist as a legal entity. This means that it can no longer trade, and any assets it had (such as bank balances) become the property of the Crown. Furthermore, the directors of the company may be held personally liable for any outstanding debts.
Once the decision is made by Companies House to pursue compulsory strike off, they will typically contact the company directors and send at least two letters. These will state that the company is in breach of regulations and request that a submission be made to rectify this. If the company does not respond to these letters, they will assume that the company is no longer operating and initiate the strike off procedure.
Despite the serious implications of this, it is important to note that the majority of first gazette notices are issued for a small number of very minor reasons. For example, if a company fails to update its registered address, this is a simple issue that can easily be remedied by sending the correct information to the Companies House. In other cases, if a company is late in filing its accounts or confirmation statement, Companies House will often give them a chance to rectify this.
If the company fails to comply with these requests, it will be placed on the ‘at risk’ list and the first gazette notice will be published. This will serve as a warning to both the company and the directors that further action will be taken if they fail to take the appropriate steps.
Once a company is struck off it cannot trade, and any attempts to do so will be met with criminal prosecution. It can also be extremely difficult for a struck off company to secure credit or form new business relationships in the future, as it can leave a bad reputation behind it.
Can the Strike Off Process Be Stopped?
The answer to this is yes, but it requires immediate action. It is important to remember that Companies House are not in the business of destroying businesses, they want to ensure that their records reflect accurate information and therefore that a company is meeting its regulatory obligations. This is why it is so important for companies to remain proactive in their approach to compliance and consider investing in software that will remind them of the importance of submitting their accounts on time and ensuring they are up-to-date with all submissions.
In the event that a company is unable to stop the strike off process it is possible to use either a Members Voluntary Liquidation or a Creditors Voluntary Liquidation to close the company. Both of these processes will require the services of an Insolvency Practitioner to act as liquidator.