Trainee commercial solicitor, Sophie Perry discusses what to do if you leave assets in a liquidated company, known as Bona Vacantia, and the options available to you to first dissolve the company, and then how to restore a dissolved company if assets have been left behind.
There are many reasons that directors may decide to dissolve (essentially close down) a company, including; retirement of the directors/shareholders; no longer required for the purpose it was originally incorporated for; financial concerns, or insolvency.
When a company is dissolved it is known as being ‘struck off’ the register at Companies House, which is essentially removing the name of the company from the official Register of Companies at Companies House.
There are two routes to dissolve a company: voluntary strike-off or compulsory strike-off.
To voluntarily strike a company off the register, the directors of the company decide (for whatever reason) to close the company and apply themselves (using a DS01 form) to Companies House to dissolve.
Whereas, a compulsory strike-off is where the Registrar of Companies at Companies House instructs that your company is struck off the register. This usually occurs due to the company no longer trading, failing to conform to legal requirements, or failing to file correct documentation (e.g., accounts, confirmation statements) within the timescales at Companies House.
During the process of dissolving a company (whether voluntary or compulsory), many directors are unaware of exactly how the assets in the company will be treated. Under section 1012 of the Companies Act 2006, assets still owned by the company at its dissolution will automatically pass to the Crown, this is known as Bona Vacantia (which translates to ‘vacant goods’ and is the name given to ownerless property).
Assets include all types of property (e.g., land, property, money/cash in accounts, intellectual property rights, etc.), essentially all assets held in the name of the company. Unfortunately, a client recently mistakenly thought that money in the company account, which the directors were authorised to access (through a bank mandate), would still be able to be transferred after the company was dissolved – this was not the case.
Depending on how a company is ‘struck off’, there are two routes to restore a company. If the company was voluntarily struck off then to restore it, the Court Order procedure is required, and if the company was dissolved through compulsory strike-off then Administrative Restoration would be applicable.
Firstly, there are certain circumstances that are required to be met to restore a dissolved company, including:
Both restoration procedures involve obtaining the consent and Bona Vacantia waiver letter from the Treasury Solicitor (who acts on behalf of the Crown), to effectively request permission to restore your company to the register and reclaim the assets within. Also, Companies House will require certain documentation to bring the company’s filings up to date, and there will be disbursements payable such as filling fees and if applicable, late filing penalties. As specialist company restoration solicitors, Holmes & Hills can assist with this.
The Administrative Restoration procedure takes approximately two to three months, however, this does depend on the timescales of The Treasury Solicitor, Companies House, and the company’s accountant to produce any missed accounts.
The Court Order procedure for restoring a dissolved company takes approximately three to six months, as this not only involves The Treasury Solicitor and Companies House, but also the Courts and the process of serving a claim form and awaiting a paper hearing date once all documentation is in order.
This is where the Corporate and Commercial Team at Holmes & Hills LLP can help if you need to recover assets of dissolved companies. Holmes & Hills’ have specialist commercial solicitors, with expertise in Bona Vancatia matters, who can prepare all the necessary legal documentation and liaise on your behalf with The Treasury Solicitor, Companies House, and (if applicable) the Court. So, if you require any advice or assistance please get in touch.
Call 01206593933 to speak to a specialist Commercial Law solicitor. Or complete the form below.
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