Companies House strike off your company

Companies House has the power to strike off your limited company if they have reasonable cause to believe that your limited company is not carrying on business or in operation. This usually happens when your company did not submit your Confirmation Statement and your company accounts are overdue.

First letter from Companies House

Companies House will send a letter to your company’s registered office address to remind you of your company’s overdue confirmation statement and/or overdue company accounts. If they receive no answer from your company director within 14 days of the letter sent, they would send second letter.

Second letter from Companies House

They will send a second letter to your company’s registered office stating that no answer has been received from you since the first letter sent to your limited company’s registered office.

And, If they receive no answer within 14 days of the second letter from the date of the second letter, a notice will be published in the Gazette with the intention to strike off your company from the Companies House register.

Publish in the Gazette & Dissolve your company

At the expiry of the 14 days after the second letter was sent, Companies House would publish their proposal to strike off your limited company in the Gazette, and send a notice to your company’s registered office informing you that your limited company will be dissolved at the expiry of two months from the date of the notice.

If your limited company has liability, in other words, owed money to someone or banks or organisations, every director and officer of your company continues to be liable and may be enforced as if your company had not been dissolved after dissolution in some situations.

How to avoid your company being struck off?

It is important that you have access to the mails send to your company’s registered office address. If you no longer has access to mails sent there. Please provide Companies House with your new UK address that you can have access to your mails.

For example, if you changed your company registered office provider recently and you must inform Companies House of the change, usually your service provider would submit the change with Companies House for you but sometime they forgot. If you do not know how to do this, contact our accountants, they would be able to help you.

Where to send your company accounts

All companies registered with the Companies House are obliged to submit their company accounts with the Registrar of Companies. It is the director’s responsibility to ensure this is done on time. This includes dormant company and non-trading company. Where to send your company accounts are dependent on

There is an automatic late filing penalty for filing your company accounts late with Companies House even just by one day.

The Companies Act requires your limited company directors to present your company’s Directors Report to your shareholders.

For a public limited company (PLC), you must lay your company accounts at a shareholders meeting, usually the annual general meeting whereas for a private limited company is no longer required to do so unless it is required by the articles of association of your company.

Companies House

Your company accounts filed with Companies House are accessible by the public. This means your suppliers, customers, bankers and the public in general could see your company records registered with Companies House and obtain the documents directly from Companies House.

Where to send your company accounts to which Companies House office is dependent on your company’s registered office.

Limited company incorporated in England and Wales must deliver their company accounts to Companies House in Cardiff. Whereas for Limited company registered in Scotland are to file their company accounts with Companies House at Edinburg. Their respective addresses are listed below:

Cardiff Office Edinburgh Office
Companies House
Crown Way Maindy
Cardiff
CF14 3UZ
Companies House
4th Floor
Edinburgh Quay 2,
139 Fountainbridge
Edinburgh EH3 9FF
LP – 4 Edinburgh 2
(Legal Post) or
DX ED235 Edinburgh 1
London OfficeNorthern Ireland Office
Companies House
4 Abbey Orchard Street
Westminster
London
SW1P 2HT
Companies House
Second Floor
The Linenhall
32-38 Linenhall Street
Belfast
Northern Ireland BT2 8BG
or
DX 481 N.R. Belfast 1

If you require help with your company accounts preparation and filing with Companies House, contact us.

Company re-registration forms

Companies House forms for company re-registration purposes. Ensure you download the correct form reference from Companies House website for the type of company re-registration you would like to execute.

Contact our accountants if you are not familiar with company re-registration law. They would be able to assist you.

Form referencePurpose
RR01Re-register your private limited company (LTD) to a public limited company (PLC)
RR02Re-register your public limited company (PLC) as a private limited company (LTD)
RR03Notice by the COMPANY of application to the court for cancellation of resolution for re-registration
RR04Notice by the APPLICANTS of application to the court for cancellation of resolution of re-registration
RR04 continuation pageThere is a signature continuation page for form RR04
RR05Re-register your private limited company (LTD) as unlimited company
RR05 continuation pageThere is a signature continuation page for form RR05
RR06Re-register an unlimited company as a private limited company (LTD)
RR07Re-register a public limited company (PLC) as a private unlimited company
RR07 continuation pageThere is a RR07 signature continuation page
RR08Re-register a public limited company (PLC) as a private limited company (LTD) following a court order reducing capital
RR09Re-register a public limited company (PLC) as a private limited company (LTD) following a cancellation of shares

Sample transactions for audit

Your Auditor get paid for their independent opinions on your financial statements and company accounts. This is their job.

Before your Auditor could express their opinions on whether your company accounts and financial statements give a true and fair view of the state of your business affairs, they would have to do their audit first.

It would be unreasonable to expect your Auditor to check every single transaction on your accounting records for accuracy. They can do it if you want them to but that’s going to cost you a lot. You better off hired an in house accountants with past auditing experience to lead your finance department.

Your Auditor sample your business transactions for audit tests based on the level of risks they identified in your business operations. Auditor is prudent in their audit approach because if someone rely on your financial statements based on their opinions and disaster happened and the someone may sue your Auditor. That’s why Auditor can be a pain sometime. Forgive them. They are just doing their job and you pay them for it, is it not?

Audit sampling methods

Your Auditor would have audit objectives to achieve and they would use combination of the following audit sampling methods when come to selecting samples of transactions for audit tests.

All of your business transactions may not be 100% audited but every single transaction has the equal chance of being picked for audit testing.

Haphazard

Simply choosing items subjectively but avoiding bias. Bias might come in by tendency to favour items in a particular location or an accessible file or conversely in picking items because they appear unusual. This method is acceptable for non-statistical sampling but is insufficiently rigorous for statistical sampling.

Simple random

All items in the population have (or are given) a number. Numbers are selected by a means which gives every number an equal chance of being selected. This is done using random number tables or computer or calculator generated random numbers.

Stratified

This means dividing the population into sub populations (strata = layers) and is useful when parts of the population have higher than normal risk such as high value items, overseas debtors. Frequently high value items form a small part of the population and are 100% checked and the remainder are sampled.

Cluster sampling

This is useful when data is maintained in clusters (in groups or bunches) as wage records are kept in weeks or sales invoices in months. The idea is to select a cluster randomly and then to examine all the items in the cluster selected. The problem with this method is that this sample may not be representative.

Random systematic

This method involves making a random start and then taking every item at the determined interval thereafter. This is a commonly use method which saves the work of computing random numbers.

However the sample may not be representative as the population may have some serial properties.

Multi stage sampling

This method is appropriate when data is stored in two or more levels. For example stock in a retail chain of shops. The first stage is to randomly select a sample of shops and the second stage is to randomly select stock items from the chosen shops.

Block sampling

Simply choosing at random one block of items such as all June invoices. This common sampling method has none of the desired characteristics and is not popular or recommended.

Value weighted selection

This method uses the currency unit value rather than the items as the sampling population . It is now very popular and it is also known as Monetary Unit Sampling.

Variation of class rights

Variation of share class rights is allowed by passing a special resolution for limited company.

Every share has its own rights attached to it. The rights typically cover matters such as voting rights, rights to dividends and rights to a return of capital on winding up. This will be referred to as class right in this article.

Procedure for variation of shares rights

Your company’s articles of association may set out class rights and provisions for altering or varying those rights.

If your company’ articles of association do not contain provisions for varying the rights, your company can vary them either by obtaining consent from the shareholders of at least three quarters in nominal value of the issued shares of that class excluding any treasury shares, or by the members of that class passing a special resolution at a separate general meeting.

You must deliver a copy of the special resolution to Companies House.

You must also deliver a Form SH10 called notice of particulars of variation of rights to Companies House within one month of the date of variation.

Objection to variation of shares rights

If your shareholders of not less than 15% of the aggregate of the issued shares of the class in question, disregarding any treasury shares in the class, did not consent to the variation of the class right, they are entitled to apply to the court to cancel the variation.

They must make the application no later than 21 days after the consent was given, or the resolution passed. The court may confirm or cancel the variation and your company must deliver a copy of the court order to Companies House no more than 15 days after it is made.

Restore dissolved company

The Companies Act 2006 has brought in a new provision for limited company to restore a dissolved company through administrative restoration. This is simplified method of restoring a dissolved limited company without having to go through a court. The cost of administrative restoration is affordable than going through Court restoration process.

Administrative restoration is only possible if your limited company had not previously applied for voluntary strike off and your limited company was struck off for less than 6 years and you were in business at the time of your company being dissolved.

Documents required to restore your company

You would have to bring your company filings up to date when administrative restoration application with Companies House.

The filings include the following documents.

  • Confirmation statement (replaces the annual return).
  • Company accounts.
  • Companies House restoration form.
  • Waiver letter.
  • Statutory filing fees payable to Companies House for the above mentioned submissions.

Feel free to contact us if you require assistance in restoring your dissolved company.

Avoid your company being dissolved

  • Ensure that you are able to access mails sent to your company’s registered office address. Companies House will strike off your company where mails sent to your registered office were returned to Companies House repeatedly.
  • Ensure you submit your confirmation statement on time.
  • Ensure your company account is delivered to Companies House on time. This including dormant company and non- trading company accounts.

Company audit

Company audit is assessment of accuracy and completeness of your accounting records to see if it gives true and fair view. Generally, Auditor looks at your company’s financial accounting system and internal controls procedure to assess it’s effectiveness. Auditor assesses if the data used to compile your company accounts is reliable.

The company audit is carried out by sections individually then piece together to form a big picture. The objective is to form an audit opinion on your financial statements and accounts. Consequently, Auditor issues either qualified or unqualified audit report. In brief, an unqualified audit report is desired. This is because a qualified report indicates that your auditor not satisfied with something. For that reason, you definitely do not want a qualified audit report.

Revenues and Expense

Broadly, audit on sales are to make sure the sales in the accounts are genuine and booked on timely manner. Similarly, the audit on expenditure is to make sure they were incurred exclusively for business. This is to avoid deliberate tax avoidance.

Fake sale

For example, a fake sale is where an invoice is created and money received in the bank to make it as if a genuine sale has happened. In real life there was the customer was a dummy. Thus, you may ask why do they want to do that? They have to pay tax on it. Exactly, they do not mind paying tax on it because they want to make “dirty” money become legal money through a business. why? so they can use it to buy property or expensive item freely. Usually, buying expensive property involve large amount of money require proof of income source.

Play with the timing of accounting

Another instance would be deliberately to book the sales earlier in the account to make the figures look good in order to borrow money from the bank or to book it later to defer tax liability. This is not allowed.

Personal expense

Whereas for expense, the audit test is to make sure it was an business expense. It was not a personal expense being put through into a business. Thus your company would pay less tax on your profit.

For instance, a company car on the book was said solely for business use. But in real life it was a car bought solely for personal leisure.

Assets and Liabilities

Largely, auditor will verify your business assets. They would trace your physical asset to the purchase invoice and ownership document. They will also assess if the asset values in your accounts reflect the current market value. The assets referred here include stock, trade debtors and property and equipment.

Similarly, for the audit of your business liabilities. The aim is to ensure monies owed are related to business expenditure. Loans to directors are properly accounted for in the accounts.

Internal Control

Universally, company audit also includes assessment of what kind of internal controls procedure you have when come to handling petty cash, issuing a cheque or making a large sum payment.

For example, say, for a cheque amount more than £20,000 two signatory are required and for the sum in access of £5,000,000 the payment must be authorized by all the directors. How often do you do petty cash reconciliation? Can you trace on your petty cash to who the reimbursement was paid to? Ideally invoices and receipts must attach to the petty cash voucher for each reimbursement.

On the other hands, what are the internal controls procedure implemented for booking of a sale transaction. For cash sales, do you issue a sale receipt? how soon after that the sales receipts are banked? Similarly, for non cash sales, do you do regular sales reconciliation to the bank statement? who is monitoring the outstanding invoices? and what methods are used to get customers to settle their invoice sooner and so on.

Accounting Policies

Widely, accounting policy adopted for stock accounting should bring the valuation of your goods and products to its net realizable value or costs.

Correspondingly, your fixed assets depreciation policy adopted must reflect the useful economic life of the assets. Subsequently, the methods of depreciation used whether straight line method or reducing balance method.

Overall, you shall adopt accounting policies that gives true and fair view business affairs. In addition, you must apply it consistently from year to year and you must justify if any changes.

Company audit risk

Any business unavoidably present the risk of fraud and other irregularities.Commonly, this includes an attempt to manipulate the figures in the accounts fraudulently and so on.

For example, a restaurant business has high volume of cash takings. Cash misappropriation is at high risk. Staff authorized to handle cash may be tempted to steal. Thus, your Auditor looks at what are the internal controls system implemented to mitigate the associated risks and to prevent cash being stolen.

On the same note, they would also look at if there is a history of cash theft. How the situation was handled and what measures were implemented to avoid similar occurrence. Was measures effective for its purpose and so on.

Another example is staff payroll. People can create a dummy employee record with a real bank account and pay out salary accordingly. Auditor may verify the physical number of staff to the staff payroll record to see any variances.

Accounting and auditing rules

Company audit also include assessment of statutory compliance of accounting or auditing rules applicable to your business.

For example, the Building Societies Act 1986 governs the audit of Building Societies. If this apply to your business then you must comply with it.

Another example, the Financial Conduct Authority (FCA) will regulate all companies provide financial services activities thus you must comply with FCA rules if this applicable to you.

Regulatory body

Concurrently, you must comply with regulatory body applicable to your business.

For instance, a registered charity company must comply with the Regulator for Charities in England and Wales. Your charitable activities and accounting records must comply with the rules of the Regulator. Therefore, file accounts with the charity commission as well as Companies House.

Previous year statutory reports

Last but not least, your trading history provides good indications of the inheritance risk, associated risks level and your business growth. Auditor usually find this indication from the following documents.

Signed company accounts

The prior year figures known as comparatives in your company accounts allow Auditor to spot big variances on each line in your profit and loss account and balance sheet year on year. The variances are explainable. For example, Sales in current year dropped by 30%. This event is explainable. Accordingly, Auditor will zoom in to find out why.

Auditor’s opinions on your financial statements.

Auditor usually follows up on highlighted issues in the qualified audit report to see if they were taken care of, if not yet then why not.

Regulatory inspections reports on your business

Regulatory inspections reports is an independent report carried out to check compliance with the Regulatory body requirements. Any non compliance issues will flag up here.

Permanent file for audit

If your company accounts are subject to audit as required by the Companies Act, you must appoint a registered auditor. The auditor will audit your company accounts and express their opinions on whether your company accounts give a true and fair view.

Your auditor will gather information of your company at the initial stage of appointment for their permanent file for your company. They will ask you for the information, since you have to prepare, gather and provide the information to your auditor, why not you also create a permanent file for your own record. Then pass the file to your auditor to make a copy of it. This can save both yours and your auditor time.

The Permanent File

The permanent file usually contains documents and matters of continuing importance of your company which will be required for more than one audit.

Below are some of the documents and records auditors would keep in your permanent file.

Statutory material

Documents governing the conduct, accounts, and audit of your company.For example, a copy of the Financial Services Act if your company is regulated by the Financial Services Authority (FSA) and other legislation applicable to your business.

The rules and regulations of your company

For limited company, this means the Memorandum and Articles of Association.

For partnerships, it means the partnership agreement.

For sports clubs, the club rules, and so on.

Copies of documents of continuing importance and relevance to your auditor

  • Letter of engagement and minutes of appointment of the auditor. This is particularly important in non-statutory audits as it embodies the auditor’s instructions.
  • Trade, license, and royalty agreements; entered into by your company.
  • Debenture deeds.
  • Leases
  • Guarantees and indemnities entered into.
  • Copies of Confirmation Statement. The Confirmation statement replaces the annual return.

Addresses of the official office and business

Your company’s registered office address and all other offices and premises, with a short description of the work carried on at each branch.

An organization chart

Detailed of the principal departments and sub-divisions thereof with a note of the numbers of people involved.

The names of responsible officials and staff within the organization structure. Extra details should be given for accounting departments.

List of books and records

The place where they were kept. Names, positions, specimens of signatures and initials of persons responsible for books and document should also be included. Account codes and classifications should also be held.

An outline history of the organization

Special mention must be made of the history of Reserves, Provisions, Share Capital, Prospectuses, and acquisition of subsidiaries and businesses. There should also be a record of important accounting ratios.

List of accounting matters of importance

Accounting policies used for material areas such as stock, work in progress, depreciation, research and development expenditure in your company accounts.

Internal Controls

Notes of interviews and correspondence regarding internal control matters and all past letters of weakness.

The business structure within a group and associated companies

A note of the position of your company in the Group and of all subsidiaries and associated companies with holdings therein.

Clients’ Internal Audit and Accounting Instructions

If any.

Details of shareholders and directors

A list of your directors, your shareholdings, and service contracts. This information contained in your Confirmation Statement which can be downloaded from Companies House website.

Investments

A list of the company’s properties and investments with notes on verification.

Company’s Advisers

A list of the company’s advisors such as bankers, merchant bankers, stockbrokers, solicitors, valuers, insurance brokers etc.

Insurance

A list of company’s insurance

The permanent file is updated on annually and usually during the audit. Your company shall provide the information listed above to enable your auditor to complete their audit assignments.

Remember that the information in the permanent file is handled with strict confidence.

Auditor’s statement of circumstances

When your company’s auditor ceased to hold office for any reasons, they are required to deposit a statement of circumstances
at your company’s registered office, set out any issues relating to the cessation of office that they consider should be brought to the attention of your shareholders or creditors of your company or state that no such circumstances exist.

In the case of resignation, Your auditor’s statement should accompany with the notice of resignation. If your company’s auditor is not seeking reappointment, their statement should be deposited at least 14 days before your general meeting where your company account are laid or within 14 days of your accounts being circulated to your shareholders if a resolution has been passed to remove the requirement for laying accounts at general meeting. In all other cases the statement of circumstances should be deposited within 14 days if ceasing to hold office.

Court order

Your company must send a copy of the statement to everyone entitled to receive a copy of your company accounts within 14 days. If your company considers the statement of circumstances to be defamatory, your company may apply to the court to allow the statement not to be circulated.

Your company’s auditor must be informed within 21 days if a court order is sought, and if this time elapses and no order is sought, your company’s auditor has a further seven days to send a copy of the statement to Companies House.

If your court application is successfully made, your company must inform everyone entitled to receive a copy of your company accounts within 14 days of the court’s decision. If the court order fails, your company’s auditor’s statement must be circulated within the same time frame and your company’s auditor must also be informed of this decision. Your company’s auditor then has a further seven days to deliver a copy of the statement with Companies House.

Auditor resigns from office

Auditor resigns from office before end of term by giving written notice to your company. Your auditor’s appointment will end on the date when the notice was deposited at your company’s registered office or on a later date specified by your auditor in the notice.

Statement of circumstances

The notice will only be effective if it is accompanied by a statement of circumstances which details of any relevant circumstances relating to their resignation that your auditor thinks should be brought to the attention of the shareholders or creditors of the company.

If your auditor has no circumstances to report, the statement must state this. Once the notice has been received it is your company’s responsibility to deliver a copy of it to the Registrar of companies within 14 days.

Extraordinary general meeting

Your auditor may also request that the extraordinary general meeting be called to consider the circumstances connected with the resignation by depositing a signed requisition with the resignation. The meeting must be arranged within 21 days, for a date within 28 days of it being convened, totaled of 49 days. Failure to do so will render your directors liable to a fine.

Written statement

Your auditor may also request that a written statement relating to the resignation be sent to all shareholders (also commonly referred to as members) prior to the extraordinary meeting. Such a statement may also be sent prior to the general meeting at which your auditor’s term of office would have expired or where a replacement auditor is to be appointed. Your auditor also has the right to attend and be heard at either of these meetings.

If the statement is received too late to be included in the notice to the general meeting, your auditor can require the statement to be read out at the meeting.

Reappointment

If your auditor does not seek reappointment at the general meeting, at the end if his term of appointment, this does not constitute resignation and no notice is required to be deposited at your company’s registered office. However, a statement of circumstances is still required.

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