COMPANY STRIKE-OFFS UP OVER 700 PERCENT
In the first quarter of 2021, nearly 40,000 companies have been struck off the register at companies’ houses, this is an increase of 743% from the same time last year.
This deluge of company strike-offs suggests thousands of directors have attempted to use a loophole that allows a company to be struck from the register and avoid any investigation and the costs of an insolvency practitioner.
The Ratings (Coronavirus) and Directors Qualification (Dissolved Companies) Bill is scheduled for its second reading in the House of Commons today and is expected to be made into law by the end of this summer.
The new law will allow the insolvency service new powers to investigate and disqualify directors of dissolved companies.
Banks are now starting the process to reinstate the companies that have been struck off and took a bounce back loan and the directors will be brought to book.
It’s unlikely the government will pay out on their guarantee to the banks if the banks have let the strike-off go without objecting to it.
Only yesterday I had an enquiry who had been advised by his accountant to strike the company off knowing full well he had taken a BBL!
There are options for companies who cannot pay back their Bounce Back loan or CBILS – striking the company off is not one of them.
If you need any advice or support, please contact us.