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The Striking off and Restoration of Companies

Striking-Off

The striking–off of a company is undertaken where the business or trade of a company has ceased, the purpose for which it was incorporated has ended or not materialised, or it is otherwise considered appropriate to remove it from the index of companies.

In order to effect a striking-off, the company must have not carried out its normal trading activity for a period of at least three months. It can, however, settle its affairs, collect debts and pay creditors during that period.

The striking-off will only really be appropriate if a company has paid its creditors in full or they have accepted that the company does not have any remaining funds and nothing is to be achieved by enforcing a liquidation. Any remaining creditors must be sent a copy of the application for striking-off within seven days of its completion and each can object to the process to Companies House. It is also not appropriate if the Company has remaining profits/share capital in excess of £25,000. If this the case, then an income tax charge will be imposed and a formal members’ voluntary winding up should be undertaken.

A company may also be struck-off by action of Companies House. If annual returns or accounts are not filed on time and if reminders for such late documents go unanswered, then Companies House may take unilateral action for its striking-off.

Bona Vacantia

Great care needs to be taken when considering the striking-off of a company, even a long-dormant one. The directors considering this route should ensure that the company does not hold any assets or rights in its name. Upon dissolution any such rights or assets would become ‘Bona Vacantia’. This term means ‘vacant goods’ and is applied to ownerless property, which by law, passes to the Crown. Such rights or assets could include bank accounts in the company’s name, holdings of real or personal property, shares in other trading companies in the

UK or loverseas or trademarks, patents or other intellectual property and pension schemes.The only way to recover such property is to restore the Company to the index of companies and to apply to the Treasury Solicitor to release the asset. The available methods of restoration will be dependent on the circumstances of the dissolution, and what, if any, are the future plans.

Administrative Restoration

If a company has been struck-off against its wishes, for example, by action of Companies House, and if such company was trading at the time of dissolution, then an administrative restoration may be considered. This is a more cost effective method than going through the courts.

Such restoration can be applied for by the former director or shareholder of a company within six years of its dissolution. The other considerations are that the company did not itself apply for striking-off, that it was trading at the time of dissolution, and that it makes good all outstanding annual returns and accounts, including those for the years where the compa-ny did not actually exist. Upon restoration it will be treated as having existed in the intervening years.

Companies House fee for the restoration is £100 and a waiver letter necessary from the treasury solicitor will be charged by him at £64. Companies House will also apply late filing penalties on all accounts that were already overdue at the time of dissolution. They will not apply late-filing penalties for any subsequent years’ accounts if the company has been dissolved for a number of years.

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Restoration through the courts.

If administrative restoration is not possible, then it will have to be carried out through application to the high court. If the purpose of restoration is purely to recover an asset that has been forgotten e.g. a still open bank account or intellectual property, then the courts will usually grant a restoration for the limited purpose of recovering this asset, transferring or distributing it and then striking-off the company again. Via this method, it is not necessary to bring the public file up to date with missing accounts and annual returns, so long as the applicant gives an undertaking to apply for strike-off again within three months of restoration. Companies House fees of £350 and Treasury Solicitor’s fees of £100 are payable and there will be court fees of £280 and costs of solicitor which are likely to be in the region of £800 plus VAT.

If administrative restoration is not possible and it becomes the intention to carry on trade through the formerly dissolved company, then the applicant will also have to make an undertaking to the court about future filings and any outstanding accounts and annual returns will have to be submitted to Companies House with the relevant filing penalties. Court and solicitors fees are likely to exceed £1,250.

Treasury Solicitor

Whichever method is chosen for restoration, any assets held by the Company will not automatically be passed back to it. A letter detailing all such assets and any relevant information about them will need to be passed to the Treasury Solicitor after restoration so that they can release them. This would include details of any bank accounts etc.

Wilder Coe Ltd are experienced at dealing with the strike-off of companies and all these forms of restoration. We are happy to deal with any queries in respect of such work, so for further details please get in touch.

Ian Saunders ACIS Partner

Ian has managed the Wilder Coe Statutory department since 1997 and became partner in 2010. In addition, Ian served as a Director of Artaius Ltd, the specialist com-pany formation and company sec-retarial arm of the Wilder Coe Ltd group before its merger into the Wilder Coe Ltd business.

Ian is expertly positioned to advise clients on all matters pertaining to Company Secretarial services and Company Formation. His ability to communicate the types of structure that are available to you, coupled with his professional understanding of which structure would benefit your business best makes his support a highly sought after commodity.

Ian advises companies of all sizes on compliance under the Companies Acts, the drafting of resolutions and specialist clauses, as well as providing insights on general aspects concerning company law. He frequently acts as the nominated company secretary for public companies and has experience of filling this role for AIM listed vehicles.

Contact Ian Saunders, Partner at Wilder Coe Ltd to discuss your circumstances on:

Telephone: 020 7724 6060Email: ian.saunders@wildercoe.co.uk

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