If you have a bounce back loan which you cannot pay back, you may to tempted to strike your company off the register at Companies House, hoping that this will kill off the liability. However, the bank or provider who provided the loan will be informed. The banks search the applications to check on any liabilities. If they see a company that they have lent money to, they will then object to the striking off. Despite the Government guaranteeing the loan – the bank/providers are responsible for collecting in the loans and they will only be able to claim compensation from the government if the company goes through an insolvency process.
The purpose of striking off (applying to Companies House to be removed from the Companies House Register) is to bring the company to an end if it has no further purpose. The company should not be trading for 3 months or more and have no or insignificant debts.
Even If your company happens to get struck off with a BBL then it is likely that the company will be reinstated (at any point going forward).
In the Companies Act 2006 section 1003 Paragraph 6
(a)the liability (if any) of every director, managing officer and member of the company continues and may be enforced as if the company had not been dissolved, and
(b)nothing in this section affects the power of the court to wind up a company the name of which has been struck off the register.
which refers to the fact that even if a company is struck off, if there are any liabilities, they continue with the director or managing officer and so these liabilities will be enforced upon if not settled.
So, in response to the question…No. you cannot strike your company off if you have not paid back your bounce back loan.
The best option if faced with this situation is for you to liquidate your company. See more here. In a nutshell, when entering liquidation, the BBL becomes an unsecured debt. Depending on how much capital is realised from the companies’ assets, the BBL can then be covered and paid. But in liquidation, unsecured debts are rarely paid in full.
Due to the pandemic the government has 100% guaranteed the loans in the event of insolvency which encouraged lending in the first place. However, the banks are expected to chase the debts in the normal way first (bailiffs, phone calls, letters) and only claiming from the Government if the business becomes Insolvent.
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