It is important to understand that letting companies fall under struck off status may have negative implications for the shareholders and directors of the company for the next 7 years which is the amount of time it will take for the company to be formally dissolved.
- A BVI company that falls Struck Off takes 7 years to be formally dissolved from the Registry.
- Struck off companies are expected to comply with Economic Substance annual reporting obligations during those 7 years.
- To formally close a company, it shall be formally Dissolved to mitigate risks involving liabilities, potential economic substance reporting obligations, fines and additional fees.
- A struck off company cannot conduct business of any kind or deal with its assets in any way. As a company is not formally dissolved, it will continue having legal status and will be subject to legal actions.
- The company’s directors that are still in office can be held liable for the actions or inactions of the company.
Once a company has been struck off, prior to it becoming dissolved, can be restored by paying its outstanding and restoration fees which will depend on how long the company has been under this status. Conversely, if the company has been formally dissolved it can only be restored by Court order and the process is quite complex.