Miracles Happen! Bringing Companies Back from the Dead
Date: 13/08/2024 | Corporate
The striking off and subsequent dissolution of a company is often described as its death but miracles can happen, a company, like Lazarus, can be resurrected and restored to the register.
Companies get struck off for a number of reasons, for example, failing to file the required returns at Companies House or by a voluntary application to be struck off if a company is no longer trading. Once the strike off takes effect the company ceases to exist and as such no longer has any legal personality so any assets it has become the property of the Crown.
Unfortunately it is often only after this has taken place that someone realizes a mistake has been made and the company is continuing to trade or that in fact it had assets that should not have gone to the Crown – striking off a company which owns a large building or a healthy bank account is not ideal!
So what if you need a miracle? How can you bring a company back from the dead? There are two processes:
- administrative restoration; and
- a court order for restoration
Which one to use depends on your specific circumstances, most people try to use the administrative restoration process if they can as its cheaper and quicker but if thats not available then going to Court may be the only option.
Administrative Restoration
The administrative process for seeking restoration requires an application to be made to Companies House. This can only be done within six years of the date of strike off by someone who is a director or shareholder of the company at the time it was struck off. In addition the company had to be operating at the point of strike off. Before any such application can be made there are a number of issues that need to be addressed.
Consent from the Crown
Firstly consent from the Crown will be needed if any property has become “bona vacantia” and is now owned by the Crown. This requires the applicant to obtain a bona vacantia waiver letter for which there is of course a fee and any costs incurred by the Crown in managing the assets while the company was dissolved may also be payable.
Up-to-Date Administration
Secondly the applicant must also bring all the company administration up to date – file all the relevant accounts, confirmation statements and other forms needed to correct the public record. The costs of dealing with this can be significant and will include penalties for late filing which can be costly when filings are over 6 months in arrears.
New Company Name
Thirdly a new name for the company may be needed. In the period since the company was struck off another entity may have taken its name or one very similar meaning the company could not be registered with the same name. If that is the case the application for restoration will need to specify a new name for the company.
If all of the above can be addressed, then an application can be made for administrative restoration for a fee of £468. The Register of Companies will then send notice of their decision to the applicant and that will be the formal date of restoration which will then be noted at Companies House.
Court Order for Restoration
If the administrative restoration process cannot be used then it will be necessary to go to Court to request restoration. This will require an application to the Sheriff Court or if the company’s share capital is more than £120,000 the Court of Session. This process is more expensive and takes longer than the administrative process as it is subject to Court fees and timetables. A wider range of people can make such an application, for example, creditors, people with claims against the company or someone with a contractual relationship which can be helpful in certain situations.
The Court will usually require all companies house filings to be brought up to date and can make any other orders it sees fit so the issues faced in an administrative restoration remain relevant. The message here is that all is not lost if you discover a company has been struck off – remember miracles can happen although they are not free of charge. If you require advice on restoring a company to the register please contact a member of the Davidson Chalmers Stewart Corporate team.
Disclaimer
The matter in this publication is based on our current understanding of the law. The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers Stewart LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.
