Can I Strike Off My Company With a Bounce Back Loan?

When you apply to strike off your limited company using a DS01 form, you are legally declaring that the company has no outstanding debts.

That includes:

• Bounce Back Loans (BBLs)

• HMRC arrears

• Overdrawn director’s loan accounts

• Unpaid invoices, leases, or employee wages

Since Bounce Back Loans were government-backed and issued under strict lending rules during the COVID-19 pandemic, they must be repaid unless the company enters a formal insolvency process like a Creditors’ Voluntary Liquidation (CVL).

If you submit a strike-off application while your company has a Bounce Back Loan:

• The lender (usually your bank) will be alerted by Companies House and can object to the strike-off.

• HMRC and other creditors are also notified and can file a formal objection, which will suspend the application.

• Even if the strike-off initially goes through, it could later be reversed, and the company reinstated for investigation.

• You as the director may face disqualification (up to 15 years) or personal liability if the Bounce Back Loan was misused or the strike-off was deceptive.

A CVL is a formal insolvency process where an insolvency practitioner helps you close your company in an orderly and legal way.

Here’s how it works:

• All unsecured debts, including Bounce Back Loans, are written off.

• The company is officially wound up and removed from the Companies House register.

• You comply with your legal duties as a director and avoid the risks associated with wrongful trading or unauthorised strike-offs.

• Investigations are carried out to determine the cause of insolvency—but genuine directors acting in good faith usually have nothing to worry about.

Bounce Back Loans were issued to the company, not you personally—so they’re not your personal responsibility, unless:

• You misused the funds (e.g. paying personal debts or withdrawing large sums unrelated to the business)

• You knew the company was insolvent and continued trading

• You attempted to strike off the company without disclosing debts

If you’ve used the funds correctly—to support your business during tough times—and are now struggling, you’re unlikely to be held personally liable in a CVL.

You can only make a company dormant if it has no debts or liabilities. If you leave a company inactive but with an unpaid Bounce Back Loan:

• Interest will continue to accrue

• The bank will chase payment

• You may eventually face enforcement action or a compulsory liquidation initiated by creditors or HMRC

• You cannot strike off your company with a Bounce Back Loan outstanding

• You can close your company through a Creditors’ Voluntary Liquidation (CVL)

• Attempting a strike-off with debts is risky and could result in personal consequences

• Get expert advice before making a move—free, confidential help is available