We have looked in previous blogs at the different methods of company restoration after dissolution. Here, we answer some of your frequently asked questions about company restoration.
What happens when a company is dissolved?
A company is a separate legal personality from the members (shareholders) of that company. It is often said that companies have a life cycle and that dissolution is the end of that life cycle.
The company ceases to exist as a legal being once it is dissolved. It has essentially died. Any outstanding debts that the company owed will be written off. Any property that the company still owned at the point of dissolution will become Bona Vacantia (literally meaning vacant goods) and will pass to the crown.
Why might I want to restore a company?
You may wish to restore a company for many reasons. The two most common are:
- to recover assets belonging to the company; or
- to revive the company so that it may become the target of legal proceedings.
Sometimes there is even a desire for the company just to resume trading. For example, in some cases the Registrar of Companies will dissolve a company for an administrative breach. If this happens to a trading company, then clearly you would want the company restored as soon as possible to allow it to continue trading.
How can I restore my company to the register?
Once a company is dissolved, there are two potential ways to restore it. Either:
- Restoration by court order pursuant to s1029 of the Companies Act 2006; or
- Administrative restoration pursuant to ss1024 to 1028A of the Companies Act 2006.
Administrative restoration is the quickest and cheapest of these methods, but you can only use it in very limited circumstances. If you do not meet the criteria of administrative restoration, then you will need to attempt restoration by court order.
Is it a difficult process?
Administrative restoration is relatively straightforward and is designed to be a user-friendly process. You will apply directly to Companies House, on form RT01. The process will be slightly more complicated if any company property has become Bona Vacantia.
Restoration by court order is a much more complicated process but it doesn’t need to be controversial. You must start your application for restoration by court order in the High Court as a Part 8 claim, naming the Registrar of Companies as Defendant. You will need to provide numerous documents and meet various procedural requirements as the application progresses, but generally, the Registrar of Companies will consent to the restoration.
Will I have to pay or agree to anything?
In administrative restoration, you must pay an initial fee of £100 when submitting the form to Companies House. You will also have to provide Companies House with all overdue documents (such as accounts) and pay any fine. You will of course also incur the professional fees associated with preparing the above.
Restoration by court order will involve the payment of a fee to start the proceedings. You will also need to agree to pay the Registrar of Companies’ legal fees of the restoration. As a condition of consenting to the restoration, the Registrar will require you to make undertakings (legal promises) to the court that will directly relate to the reason you want to restore the company. For example, if you are restoring the company to a trading company, then the undertaking will usually include a requirement to file accounts and returns along with any late filing fines.
Can you help us?
We certainly can. We have extensive experience with both forms of company restoration and would be happy to discuss the most appropriate route for you. Call our commercial dispute resolution team on 0800 988 7756 for a FREE initial consultation.