The number of companies that opt to be removed or ‘struck off’ from the Companies House register has risen by 28% in the last three years, according to research from R3.

Results of the survey from the insolvency trade body showed that 139,594 companies were struck off in the year 2010-11. The figure increased to 178,996 in 2013-14.

A ‘strike off’ is designed for a business that has paid its creditors and fulfilled its responsibilities but has become dormant or is no longer trading.

These figures may help to explain the unexpectedly low number of formal insolvency procedures since the start of the recession.

Andrew Tate, Deputy-Vice President of R3, says: “Ordinarily, insolvencies rise following a recession, due to problems like ‘over-trading’ during recoveries or as a delayed impact of the recession itself. Since the 2008 recession, however, insolvencies have fallen.”

“The phenomenon of ‘zombie businesses’ – businesses that survived due to the unique circumstances of the last recession but had little chance of long-term recovery – could partly explain lower than expected insolvency numbers, but falling numbers of ‘zombie businesses’ have not been matched by rising insolvencies.

“It may well be that many of the UK’s ‘zombie businesses’ have been just removing themselves from the Companies House register rather than opting for a formal insolvency procedure.”

The number of creditors to oppose a strike off has risen in the same timeframe. In 2010-11 there were 1,738 objections while in 2013-14 there were 2,406 – a 38% increase.

There was roughly one objection per 74 applications in 2013-14, compared to one in 80 three years ago.

Mr Tate said: “In formal insolvencies, creditors’ interests are paramount. Insolvency practitioners will treat them on an equal basis and carry out important tasks like investigating directors’ actions. Although growing faster than the number of applications, it’s slightly surprising that objections to ‘strike-off’’ applications are relatively low: it may be that many creditors aren’t aware of their rights.

“Creditor interests also risk being undermined by this Government’s proposed changes to civil litigation funding – the Jackson reforms. From April 2015, the changes will make it much harder for insolvency practitioners to return money to creditors from insolvent companies’ directors, and mean up to £160m a year of creditors’ money could stay in directors’ hands following insolvencies. Insolvency litigation must be made exempt from the reforms.”