Restoring a Dissolved Company
There may come a time when your company will be dissolved, but is that the end of the story? This post explores the process to restore a dissolved company (also known as 'Administrative Restoration') and how you may be able to get your company back.
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 what are the steps to restoring 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 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 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.
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 December 2017). 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 is made, 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 form RT01.
Step 3 - 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 4 - 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 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.
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 form RT01, 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 December 2017.
- 16 Jul 2018 - Tips to Choose the Right Structure for Business
- 04 Jul 2018 - Is your Business Cost Effective?
- 22 Jun 2018 - Should my company take a political stance?
- 13 Jun 2018 - Pricing Strategies: Pricing your Products and Services
- 05 Jun 2018 - Can Networking Help Self-Employed with Mental Health?