The last part of the life cycle of any company is dissolution; where the company is struck off the register of companies. There can be many reasons why a company is dissolved; it may have outlived its usefulness, it may have been administratively struck off by Companies House for non-compliance, or it may have been wound up by a creditor. Whatever the reason, the consequences are the same – it no longer exists as a legal entity. But this is not necessarily the end of the matter and a company can be restored for the right reasons.
There are two ways of restoring a company; by court order, or by administrative restoration. This article will concentrate on administrative restoration.
What is Administrative Restoration?
The relevant provisions for administrative restoration can be found in sections 1024 to 1028A of the Companies Act 2006. It is the quickest and easiest way to restore a company as it only involves an application directly to Companies House. However, it is only available as an option in very limited circumstances.
Administrative restoration can only be used where a company has been dissolved pursuant to sections 1000 or 1001 of the Companies Act 2006 or section 652 of the Companies Act 1985. This is where a company has been dissolved by the Registrar of Companies because it is dormant or has failed to file accounts or a return. If a company has been dissolved for any other reason, then administrative restoration cannot be used.
A time limit is also placed on this procedure. You cannot restore a company using the administrative procedure more than 6 years after the dissolution of a company.
It is clear, therefore, that the administrative restoration procedure is only envisaged as being a quick and easy way of restoring a trading company to the register, should it have unfortunately been struck off for an administrative default.
What is the procedure?
An application may be made by either a director or member (shareholder) of the company. The applicant must complete an RT01 form and file that at Companies House with a fee of £100 and a statement of compliance.
Administrative restoration will only be allowed if all the necessary grounds are met (section 1025 Companies Act 2006). If the following requirements are met, then the company will usually be restored.
- The company must have been in operation at the time it was struck off;
- Where the property of the company has vested in the crown (known as bona vacantia) after the strike off, the crown’s representative must consent in writing to the restoration;
- The applicant must provide to the registrar all of the documents required to bring the company’s records up to date. E.g. the overdue accounts; and
- The applicant must also pay any penalties for failure to deliver accounts.
What if I cannot use the Administrative Restoration process?
If you cannot use the administrative restoration process (for whatever reason) then you will have to apply to the court for an order to restore the company. This is much longer and expensive process than administrative restoration, but it does allow restoration in circumstances where it would not otherwise be possible.
I will cover restoration by the court in my next article.
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