Sometimes a company is dissolved and removed from the register of companies without winding up its affairs or dealing with its assets properly. Any assets left in the company at the point of dissolution will vest automatically in the Crown or the Duchy. Our specialist Insolvency Disputes Team can advise on how best to restore companies or recover assets in these circumstances.
Dissolution is the last stage of a company’s existence. If it hasn’t already happened during liquidation, the company is brought to an end and its assets and property are redistributed. Once dissolved, the company no longer exists and is removed from the companies register held by Companies House.
Sometimes it’s necessary to restore a company to the register. This is often the case where a company was dissolved following action instigated by Companies House because it appeared the company was no longer carrying on business or in operation. In such instances, provided certain conditions are met, a former Director or member may apply to Companies House to have the company restored by way of ‘administrative restoration’. A successful application will result in the company being restored, and it is deemed to have continued in existence as if never being dissolved and struck off the register.
Restoration by way of Court order
In all other circumstances, a party seeking to restore a company to the companies register needs to apply for a Court order to do so. The application must be made in a prescribed form and contain certain information and evidence in order to persuade the Court to make the order.
When a company is dissolved and ceases to exist, any property or assets held by the company or held in trust for the company is ‘bona vacantia’ (ownerless property), and vests in the Crown.
Where a company was holding property on trust for the benefit of another party immediately before the company was dissolved, the beneficiary can apply to the Court for a vesting order to transfer the property to them. This is a discretionary remedy awarded by a Court when it is clear that the transfer must occur in order to be fair.
It is common for a vesting order to be applied for when a dissolved company has contracted to sell its assets (most commonly property), but those assets were not transferred despite being paid for. The contract and evidence of the payment should be supplied as evidence in any vesting order application.
Also, where an office holder of an insolvent estate has disclaimed his interest in property, certain persons, as permitted by the insolvency legislation, can apply to Court for the property to be vested in them.
Our Insolvency Disputes Team has extensive experience in all processes described here. For further information, please contact the team.