Company Restoration - LMD Law

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Company Restoration Guidance
& FAQ's

Company Restoration

Specialist Company and Commercial Lawyers

LMD Law's specialist company and commercial lawyers can assist you to restore your limited company. To discuss your matter and for a no obligation initial assessment of your circumstances with one of our expert company law solicitors please don’t hesitate to call on 0800 689 3037 or email hello@lmd.law

You can also reach our staff on our online chat or complete our website contact form.

We can usually provide competitive cost effective fixed fee quotations for most of our company restoration legal services.

What is the status of a limited company, its shareholders or members, and its directors?

In short, companies are treated as separate legal entities and have a separate legal personality to those who are members (or shareholders) as well as to those who run the company’s affairs, the directors. The company’s assets are also treated separately to the people involved with its affairs.

What does it mean if my company is dissolved?

The final event in a company's life is usually the striking off of its name from the Register of Companies. Upon the Registrar publishing notice in the Gazette that it has struck off the company's name, the company is deemed dissolved and loses its legal personality.

Can you reinstate a dissolved company?

The short answer to this is, yes, it is possible in certain circumstances to restore a dissolved company to the Register. A limited company can be restored to the Register of Companies at Companies House but it will depend on the exact reasons that the company was dissolved in the first place as well as the reason for its restoration. It will also be relevant as to who wishes for the company to be restored as to whether or not it is ultimately possible and the exact process which will need to be followed.

Why would I need to restore a company to the register?

Typically, the need to restore a company to the register arises where:

  • The company had title to an asset when it was dissolved that is of value or importance. Most commonly, directors or their accountants forget to fully distribute funds in bank accounts belonging to a company, leaving a residual balance or they dissolve the company too quickly before all payments made to the company are accounted for. As the funds are the property of a company that is no longer active and in existence, being dissolved, these funds cannot be distributed or handled unless the company is restored first. This also applies to other types of assets such as interests in property that the company has acquired or even licences it may have held.

  • Also a common occurrence is when a company has been struck off for failing to file annual returns and accounts, but its business continues to trade. Again, because the company is no longer active then it cannot conduct its affairs without a restoration.

  • Less common but still applicable is when a party has an unresolved claim against the company and wants to take some action against it to obtain compensation or redress. This can be, for example, if someone suffered a personal injury on the company’s premises or a former employee has a claim for money they may be owed.

How long do I have to restore my limited company?

From the date that the company was dissolved you would usually have 6 years within which to make an Application for restoration. This time limit will apply unless the purpose of the application is to bring proceedings against the company for damages for personal injury or, in certain circumstances related to personal injury, to enable an insurer of the dissolved company to bring proceedings against a third party in the name of the restored company. It is vital that, if you are unsure about the dates or if you are close to or about to exceed the time limit, you seek urgent legal advice.

What is the effect of my company being restored?

A company that is restored to the Register is deemed to have continued in existence as though it had not been dissolved or struck off. The underlying principle is that restoration should put all parties in the same position they were in before the company's dissolution. However, the position of the company on restoration in relation to its ownership of, or rights in, any particular asset may depend on whether the Crown has disposed of or disclaimed the asset in the meantime.

Restoration of a company does not put the company back in time to the exact state it was in at the date of dissolution. Instead, the company's acts can be retrospectively validated when it is restored to the register

What procedures need to be followed?

The Companies Act 2006 (CA 2006) created two procedures for the restoration of dissolved companies to the Register:

Restoration by Court Order

This is a procedure whereby companies may be restored to the register on an application to Court and is the most common route for restoration.

10 Stage Summarised Court Order Restoration Procedure

The procedure for LMD Law to apply to the Court for a company restoration to the register is summarised as a 10 stage process below:

  1. Taking instructions, collecting evidence, assessing the case, providing advice and preparing Witness Statements;

  2. Completing a Claim Form and Particulars of Claim under Part 8 of the Civil Procedure Rules, collating the papers with the Witness evidence, and filing these at the relevant Court (a Court fee of £280 payable to ‘HM Courts and Tribunals Service’ usually applies) and the issued sealed Claim papers are then served on the Respondent(s);

  3. Writing to the Registrar of Companies as to their requirements to agree an Order and then meeting those requirements and also obtaining a bona vacantia waiver letter (if applicable);

  4. Writing to the Duchy of Lancaster or Duchy of Cornwall’s legal representatives (if applicable) to obtain a bona vacantia waiver letter (if applicable);

  5. The court will generally set a hearing date for three months after the claim is issued, to allow time to comply with the requirements of the Registrar of Companies.

  6. The Registrar of Companies, via the Treasury Solicitor, and the relevant Duchy’s solicitors (where applicable) will set out their requirements for their consent to an Order being made (the fees of the Treasury Solicitor, acting for the Registrar will be payable, usually in the sum of £300);

  7. Undertakings are usually required from the Claimant to the Court according to the requirements of the Registrar of Companies;

  8. Bona vacantia waiver letter is obtained (where applicable) and put in evidence to the Court (a fee of £150 + VAT is usually payable to the Duchy’s solicitors for their legal fees) and in any event a Witness Statement as to service of the Claim is filed and served;

  9. Provided that the above steps have been successfully completed, the company restoration will usually be dealt with by a Consent Order, provided the requirements of the Registrar of Companies have been met and the Treasury Solicitor and or Duchies of Lancaster or Cornwall can approve the application. The Court will usually make the Order at the listed hearing and seal it, sending it out from the relevant Court office once this has been processed. It is possible that the Court will attend to matters on paper and, if so, a Judge’s box work fee of £25 is usually payable to ‘HM Courts and Tribunals Service’. If there are delays from third parties in the documentation being finalised in time then this can result in the need for a Court hearing to be adjourned to another date before the Order can be made final;

  10. The sealed Order is served upon the Registrar of Companies who will restore the Company to the Register and the restoration takes effect on the date that the Order is delivered to the Registrar of Companies.

  1. Who can apply?

An application for a Court Order restoration can be made by someone who was a:

      1. Any former director of the company.

      2. Any former member of the company (or his or her personal representatives).

      3. Any person who was a creditor of the company at the time of its striking off or dissolution.

      4. Any person who but for the company's dissolution would have been in a contractual relationship with the company.

      5. Any person with a potential legal claim against the company.

      6. Any person having an interest in land in which the company had a superior or derivative interest or other property that was subject to rights vested in the company or that was benefited by obligations owed by the company.

      7. Any manager or trustee of a pension fund established for the benefit of employees of the company.

      8. Any former liquidator of the company.

      9. The Secretary of State.

      10. If the company was voluntarily struck off any person entitled to notice of the same under relevant legislation.

      11. Any other person who appears to the court to have an interest in the matter, however, allowing a third party to be joined to restoration proceedings will not be the norm.

    1. Basic Condition

A company can only be the subject of administrative restoration if it was struck off by the Registrar under sections 1000 or 1001 of the CA 2006 or under section 652 of the CA 1985. An application may be made whether or not the company has in consequence been dissolved.

    1. Required Conditions

The court can restore any company to the register that meets one of three conditions. These are that the company:

      1. Has been dissolved after a winding up.

      2. Is deemed to have been dissolved following administration.

      3. Has been struck off the register under section 1000 or 1001 (power of registrar to strike off defunct company) or under section 1003 (voluntary striking off), whether or not the company has in consequence been dissolved.

    1. Outcome

The Court will either:

      1. Grant the restoration in the terms of a Consent Order or by a decision of a Judge if an Application is opposed; or

      2. Reject the Application and dismiss the Claim.

  1. Administrative restoration. This is a procedure whereby companies may be restored to the register by the Registrar of Companies (Registrar) without an application to the Court. NOTE: This procedure is only available in certain limited circumstances.

    1. Who can apply?

An application for administrative restoration can only be made by someone who was a:

      • Director of the company; or

      • Member of the company.

In practice the former director or former member must have been a director or member at the time the company was dissolved, even though the legislation does not specify this, as Companies House will not make changes to the Register details for the company and they would remain pending until the restoration is completed.

    1. Basic Condition

A company can only be the subject of administrative restoration if it was struck off by the Registrar under sections 1000 or 1001 of the CA 2006 or under section 652 of the CA 1985. An application may be made whether or not the company has in consequence been dissolved.

    1. Additional Conditions

Even if a company meets the basic condition, the Registrar cannot restore a company to the register unless all of the following conditions are met:

      • The company was carrying on business or was otherwise in active operation at the time of its striking off.

      • The Crown's representative, in cases involving any property or right of a company being vested in the Crown bona vacantia, consents, in writing to the Registrar, to the company's restoration to the register. The consent is referred to as a bona vacantia waiver letter.

      • It is the applicant's responsibility to obtain the consent of the Crown's representative and to pay any costs demanded by the Crown's representative in respect of its dealing with the property during the period of dissolution or in connection with the administrative restoration application.

      • The applicant delivers to the Registrar all of the documents that are required to bring the company's records kept with the Registrar up to date (for example, all overdue annual returns or accounts, including those for the years the company was dissolved).

      • The applicant pays any penalties for failure to deliver all accounts that were outstanding at the date of the company's dissolution or striking off. In practice, the Registrar may accept an undertaking to pay instead of requiring payment upfront.

    1. Administrative Procedure

To apply for administrative restoration, an applicant must send to the Registrar:

      • The correct format of application form RT01

      • A correctly drafted statement of compliance

      • The required fee (currently set at £100)

    1. Outcome

The Registrar will either:

      • Grant the restoration and notify you of the decision, the restoration taking effect on the date that such notice is sent and also published in the London Gazette; or

      • If the Registrar decides not to restore the company to the register, the applicant may apply to the Court for a restoration Order within 28 days of the Registrar's decision.

Retrieving Assets Held Bona Vacantia

What is ‘bona vacantia’ and what does it mean for me?

The term ‘bona vacantia’ is a legal term in Latin language which translates literally into English as “empty goods”.

In English law the term is applied to assets which appear to have no other person with a legal interest in, or ownership of, them. The 2 most common times when this applies is if a person dies without making a Will and has no known or traceable relatives to inherit or a private limited company has been dissolved while still holding assets.

In this context, assets which are held ‘bona vacantia’ and which formerly belonged to the company have to be applied for, post restoration, from the Crown, effectively HM Government, the Duchy of Lancaster, effectively Her Majesty the Queen or the Duke of Cornwall, effectively His Royal Highness the Prince of Wales. In practice, the Treasury Solicitor (part of the Government Legal Department) acts for the Crown as legal representatives and Farrer & Co. act as solicitors to the Duchy of Lancaster and the Duchy of Cornwall.

This is an additional process and the exact steps will depend upon the assets in question. Court Orders will commonly allow 3 months within which to retrieve the assets.

Effect of restoration where property has vested as bona vacantia

Section 1034 of the CA 2006 provides for the effect of restoration to the register where the company's property has vested as bona vacantia under section 1012 of the CA 2006.

Under section 1034(1) of the CA 2006, the person in whom any property or right is vested as bona vacantia may dispose of that property, or an interest in it, or right even though the company may be restored to the register.

If restoration takes place, it does not affect the disposition of the property, but the Crown is required to pay to the company an amount equal to:

  • The amount of any consideration received for the property or right or interest in it.

  • The value of such consideration at the time of the disposition.

  • If no consideration was received, an amount equal to the value of the property, right or interest disposed of, as at the date of disposition.

The Crown may deduct from this amount its reasonable costs in connection with the disposition, unless they have been paid as a condition of restoration or pursuant to a court order.

Other impacts of company restoration

Will the company use its original name on restoration?

Ordinarily, the Registrar will restore the company to the register with the name it had before it was struck off. However, if at the date of restoration the company's former name is the same as another name on the Register's index of company names, the Registrar cannot restore the company with its former name. In this instance, a company must be restored to the register under another name specified by a Court Order or the administrative application. In practice this will temporarily be the company’s registration number.

A company which is restored to the register with the same name as its registered number must pass a resolution to change the name of the company within 14 days from the date of restoration. It is a criminal offence not to comply with this name change requirement.

Are there any other costs or penalties to consider?

Before a company can be restored to the register, it must pay, or undertake to pay, any statutory penalties for failing to file accounts or reports with the Registrar within the period allowed for filing which were due at the date of dissolution or striking off. The penalties that may be due are:

  • Unpaid penalties outstanding on accounts delivered late before the company was dissolved.

  • Penalties due for accounts delivered on restoration, if the accounts were overdue at the date the company was dissolved.

  • The appropriate filing fee on submission of any outstanding documents.

What other common consequences might apply?

When ordering the restoration of a company to the register, the Court can give any directions or make any provisions as seems just for restoring the company and any other persons to the same position they would have been in had the company not been dissolved or struck off. For example, the Court may give directions as to:

  • Whether time be deemed not to have run on claims of or against the restored company while it was dissolved.

  • The delivery of documents to the Registrar to enable him to bring his records up to date.

  • The payment of costs in connection with the proceedings for restoration.

  • The payment of the Crown representative's costs incurred in connection with rights or property which vested in the Crown as bona vacantia.

  • Where a creditor held security over a company's assets before it was dissolved and has not released it in the meantime, the security will remain valid.

What if my company was previously in an insolvency procedure before it was struck off or dissolved?

Where a company was in an insolvency procedure before it was struck off or dissolved, whether the Court will decide to place it back into that insolvency procedure on restoration will largely depend on whether or not:

  • The insolvency procedure had formally concluded before the company was struck off or dissolved.

  • The relevant insolvency practitioner had resigned or formally vacated office before the company was struck off or dissolved.

Can I place a restored company into liquidation?

Often the reason for restoring a company to the register will be so that it can then be placed into liquidation so that, for example:

  • A party which has an unresolved claim against the company can take action against it to obtain compensation or redress.

  • A party can claim a payment due to the company which it was unaware of when the company was dissolved.

  • A liquidator can pursue claims such as preference or transaction at an undervalue claims.

To discuss your matter and for a no obligation initial discussion of your circumstances with one of our expert company law solicitors please don’t hesitate to call on 0800 689 3037 or email hello@lmd.law

You can also reach our staff on our online chat or complete our website contact form.

We can usually provide competitive cost effective fixed fee quotations for most of our company restoration legal services.