Why is the notice issued and what does it mean for your business?
A First Gazette Notice is an advert placed in the Gazette to inform a company’s creditors and other interested parties that an application has been made to forcibly shut the business down via a process called Compulsory Strike Off.
Compulsory Strike Off is a process that Companies House can initiate against businesses that do not comply with their statutory filing and accounting obligations. Companies House places a first notice in the Gazette to give outstanding creditors and other parties two months’ notice of the intended action. If no one objects to the strike off, the business will be removed from the Companies House register and will cease to exist.
What is the Gazette?
What is the Gazette?
The Gazette is a public journal licensed Insolvency Practitioners use to place statutory notices about insolvency procedures. It is a legal requirement to advertise insolvency matters to make all relevant stakeholders aware of procedures that have been initiated or are ongoing.
There are three Gazettes in the UK, with the company’s location determining which Gazette the notice is placed in. In Scotland, all insolvency notices, including the First Gazette Notice for Compulsory Strike Off, appear in the Edinburgh Gazette. Notices are placed in the London Gazette for companies in England and Wales and the Belfast Gazette for those based in Northern Ireland.
What is the purpose of a First Gazette Notice?
Companies House must follow a statutory process when initiating the Compulsory Strike Off procedure. An important part of that process is to inform interested parties, such as business partners, creditors, banks and suppliers, of their intention.
As well as informing relevant stakeholders, the First Gazette Notice allows them to object to the company’s closure. HMRC, the banks and other creditors constantly monitor the Gazette for this type of notice. If they see a notice about a company that owes them money, they have two months to oppose the strike off and provide proof of the debt. If Companies House accepts the appeal, it will stop the process so the creditor can take action against the company to recover the money they are owed.
If there are no objections, a Second Gazette Notice will appear advertising the company’s dissolution. Companies House will then strike it off the official register and the business will cease to exist.
Why might a First Gazette Notice be served?
Why might a First Gazette Notice be served?
Companies House will place a First Gazette Notice for Compulsory Strike Off for a failure to comply with regulations. That includes:
- Failing to file an annual confirmation statement
- Failing to file statutory business accounts
- Not declaring a new business address
- Not appointing company directors
- Not paying late submission penalties
- A lack of activity
Companies House will try and contact you to get the information it needs. If you ignore the contact or do not provide the relevant information, it will assume the business is no longer trading and issue the First Gazette Notice. If you no longer need the company, you can let the process run its course. However, if you’re still trading or may need the company again in the future, you should make a suspension application and give Companies House the information it’s asking for.
What are the consequences of a First Gazette Notice for Compulsory Strike Off?
What are the consequences of a First Gazette Notice for Compulsory Strike Off?
When Companies House places the notice in the Gazette, it will kickstart a set of consequences that can seriously damage your business. The banks regularly monitor the Gazette, and when they see the notice, they’re likely to freeze your company bank accounts, making it almost impossible to trade. Suppliers and business partners may also become aware of the notice and refuse to do business with you.
If you don’t challenge the notice, your business will be struck off the register and your employees will lose their jobs. They’ll also be unable to claim redundancy pay. Any assets your company owns that you have not sold or transferred away from the business will become the property of the Crown.
What are your options if you’re served a First Gazette Notice for Compulsory Strike Off?
What are your options if you’re served a First Gazette Notice for Compulsory Strike Off?
If a First Gazette Notice is served against your company and you don’t want it to be struck off, you must act quickly. You have just a two-month window to prevent the closure of your business.
The first thing to do is submit a suspension application to Companies House. That will delay the process and give you more time to take the necessary steps. You should then find out why the notice has been issued and file the relevant accounts, update your information or provide Companies House with evidence that your business is still trading.
If you want to bring the company to an end but it has debts you cannot pay, you should not allow the Compulsory Strike Off to proceed. Your outstanding creditors will likely object to the strike off and take action to collect the money they are owed. Neither you nor your employees will be eligible to claim redundancy pay and you could face penalties for attempting to avoid repaying your debts.
If your company is insolvent, you can use a liquidation procedure called a Creditors’ Voluntary Liquidation (CVL) to close it down. You will appoint a liquidator to invite claims from your creditors, sell the company’s assets and repay your debts as much as possible. They’ll then close your company and write off any outstanding debts.
Need advice?
Need advice?
At Scotland Liquidators, we can help you understand your position if you’ve received a First Gazette Notice for Compulsory Strike Off. We can also provide reliable advice and practical solutions to rescue or liquidate your company. Contact our team of licensed Insolvency Practitioners to arrange your free, no-obligation consultation.
