Restoring a Dissolved Company
Every company owner knows that their company can get dissolved, but is that the end of the story? This post explores how you may be able to restore a dissolved company.
Under section 1024 of the Companies Act 2006, there is a provision for the restoration of a dissolved company, which supplements the Court power to restore companies by Court Order. This is known as Administrative Restoration and allows Companies House to restore a dissolved company to the company register in certain circumstances.
In cases where administrative resolution is not a viable option, the option to obtain a Court Order remains available.
So how do you restore a company?
Step 1 - Check that you're eligible to apply
Before you go any further you need to make sure that your company will be eligible for Administrative Restoration. In order to be eligible the following must be true:
- The company was struck off by the Registrar of Companies under sections 1000 or 1001 of the Companies Act 2016.
- In other words your company appears defunct, usually because it has failed to file its confirmation statement, its accounts or has failed to respond to reminders to do so etc.
- The application is being made by someone who was a director or shareholder/member at the time the company was dissolved.
- The application for administrative restoration is being made within 6 years of the date the company was dissolved.
- The company was in business, operating or trading at the time it was dissolved.
If the above conditions are not met then there are other options available, such as a restoration via court order. This can be done by parties that are not former directors or shareholders, for example, it can be done by creditors.
Why would anyone else want the company to be restored? There are several reasons this may happen. For example, the creditors for the dissolved company may want to see it restored so that their debt can be paid.
Step 2 - Apply for a bona vacantia waiver letter (if required)
This will only be needed if the company owned any property, so feel free to skip this if this does not apply to you.
If your company owned any property then it became bona vacantia and handed over to The Crown. This means that you will have to have consent, in writing, from a crown representative before your company can be restored.
Most applications will need to be sent to the Treasury Solicitor, but the appropriate Crown representative varies depending on where the property was based and where the dissolved company had its registered office:
- If the company owned property in England or Wales, you'll typically need to apply to the Treasury Solicitor.
- However, if the company's last registered office was in Cornwall, Merseyside, Lancashire or certain parts of Cheshire, Cumbria or Greater Manchester (collectively the Duchies of Cornwall and Lancaster), then you may instead need to apply to Farrer & Co., the solicitors who represent the Duchy Estates
- If the company owned property in Scotland, you'll need to apply to the Queen's and Lord Treasurer's Remembrancer
- If the company owned property in Northern Ireland, you'll need to apply to the Crown Solicitor's Office, Northern Ireland (contactable on 028 9054 6037)
In England & Wales, you will need to complete the BVC14 form. Other forms may need to be used, depending on where the property is located (We recommend checking the links above for the relevant authority).
There may be fees that will need to be paid for the application. This is currently £64.00 for England and Wales (correct as of October 2016), but this may vary depending on the location. In addition, there may be further fees if they have dealt with any assets of the company previously, for example, they may look to recover the full costs from you for dealing with them.
When the application form is completed and all costs are paid then usually the Treasury Solicitor will issue a bona vacantia waiver letter which is a statement in writing giving their consent to the company's restoration. This will be sent to the postal address, email address or fax number stated on the BVC14 form, typically within a few weeks of the application.
Once you have been supplied with your bona vacantia waiver letter, then you can begin with your application to Companies House for Administrative Restoration.
Step 3 - Apply to Companies House for administrative restoration
You will need to send in several items to Companies House in order to apply successfully for Administrative Restoration. In order to avoid an delays in your application it is best practise to send all of the items together.
The RT01 form (or, for an LLP, the equivalent form LL RT01) the ' Application for Administrative Restoration to the Register' must be completed with the following details:
- The dissolved company's name and company registration number
- A statement of compliance which confirms that the applicant has legal standing to make the application
- Optionally, an alternative company name (this is only needed if the company name has since been registered to another company, but many owners like to pre-empt this by selecting another name during application)
A cheque for £100
This is the Companies House restoration fee (correct as of October 2016). Cheques should be made payable to 'Companies House' with the company number of the company being restored written on the reverse to avoid confusion.
All outstanding documents e.g. accounts and confirmation statements must be submitted to Companies House to bring all records up to date. That includes any documents that were due or overdue at the date the company was dissolved and those that will have fallen due since.
Outstanding fees and penalties
Any outstanding documents will be penalised and you will need to pay the appropriate fee for them. In particular the registrar's fee for submitting a confirmation statement.
Usually there are also statutory penalties to pay, particularly if your accounts were filed late. But these could include:
- Penalties still outstanding on accounts that were delivered late but before the company was struck off; and
- Any penalties attached to accounts that were overdue at the date the company was dissolved.
- Typically, Companies House will not continue to increase penalties for the period between the company being dissolved and an application to restore the company for example, if accounts were 3 months overdue at dissolution they will be treated as 3 months late, even if several years have passed since closure of the company.
Any late filing penalties can be substantial, potentially up to £1,500. If you have multiple sets of accounts overdue, these penalties will be duplicated. This, when added to any filing and other fees could quickly increase the cost of Administrative Restoration. Whoever is making the application will need to think carefully whether the costs will outweigh any benefits to having the company restored.
All of these should be sent to Companies House at the relevant address stated on the RT01 form.
Step 4 - Companies House process the application
Once you have sent off the paperwork and any monies owed, the process should be straightforward and you should have a decision within 2 weeks; Companies House will inform you of the decision. If the application was successful then your company should be restored to the register.
Step 5 - Receive the notice of restoration
If you have received notice that your application was successful then Companies House will restore your business to the register.
The general effect of Administrative Restoration is that the company is deemed to have continued in existing as if it had not originally been struck off the register. The visible effects include:
- The company immediately appears in Companies House's online register as active
- A notice of restoration will be published in the Gazette
- However, references to the original striking off and restoration will remain visible in the company's filing history on the Companies House website
Once your company has been restored, you can look at getting your monies and assets returned that have been held bona vacantia by The Crown.
Also, under section 1028 of the Companies Act 2006 your company can apply to the Court to give directions, or make provisions, that may be required to put the company, its members or directors in the same position they were in before the company was struck off. Any application under this provision must be made within 3 years of company restoration.
Companies House may restore the company to the register as if its registered number is also its name
The notice of restoration will include the company name and its registered number. However, while the company was dissolved another company may have started with a similar (or the same) name, this means your company can no longer use the name. The previously dissolved company cannot claim priority so in this case will need to be restored under a new, unique name.
You may have thought of this happening and provided a new alternative name in the RT01 form, in this case, Companies House will issue a change of name certificate on restoration. However, it may be the case that your alternative name was not accepted. If this happens then Companies House will restore your business to the register using the company number as the name of the company. If this happens, the company must then change the company name to something new. An offence is committed if the company does not change its name within 14 days of restoration.
What happens if Companies House reject the application?
Your application may be rejected for one reason or another, such as not all of the requirements being met. If this happens, it could just be a case of providing any missing documentation. If it was refused for another reason then you will have to look at alternatives to the restoration. You may be able to:
- Apply for a court order for restoration. This may be available even if the standard period for restoration has expired, so long as an application is made within 28 days.
- Obtain a discretionary grant, if a shareholder's aim is to recover monies from the dissolved company.
- Form a new company, if the sole aim is to trade rather than recover assets.
All references to current legislation are correct at the time of writing, and should only be used as a guide. We recommend seeking professional advice before acting on the information in this article. All information is correct as of October 2016