The dissolution of a company does not always mean the end of the road for that company. The Companies Act 2006 ("2006 Act") provides two routes by which a company may be restored.
Administrative Restoration
Administrative restoration is the simpler and quicker route, but is only available if the following conditions are met:
- The application is made by a former director or shareholder.
- The company was struck off under sections 1000 or 1001 of the 2006 Act, i.e. struck off where the Registrar of Companies has reasonable cause to believe that a company is not carrying on business or in operation.
- The application is made within six years of the company being dissolved.
- The company was still trading at the time it was struck off the Register of Companies.
- The applicant has obtained a waiver letter from the Crown (which basically allows the company's assets to be returned to the company).
On top of that, the company must catch up on any missing filings at Companies House, like overdue accounts or confirmation statements, and pay a fee of £486. If the Crown has dealt with any assets of the company while it was dissolved, the applicant will be required to pay the full costs of dealing with those assets before the Crown will issue a waiver letter.
Court-Ordered Restoration
If administrative restoration isn’t available, then the only other option is to make an application to court. Restoration by the court is open to a wider group of parties than administrative restoration. In addition to former directors or shareholders, those who can apply for restoration includes: someone who had a contractual relationship with the company, someone who had an interest in land or property in which the company had an interest, together with creditors, or anyone with a claim against the company. It should be noted that the court process is more involved and therefore will result in higher costs and longer timescales to achieve restoration (if granted) than administrative restoration. The procedure differs between Scotland, and England and Wales, due to the different court process in each jurisdiction.
Irrespective of which part of the UK the company is registered in, the applicant still only has 6 years from the date of the company's dissolution to make the application to the court, unless the purpose of the application is to bring proceedings against the company for damages for personal injury, in which case there is no time limit.
Scotland
In Scotland, applications are made to the Court of Session or a local Sheriff Court (if the share capital of the company does not exceed £120,000).
The application is presented to the court in the form of a petition. The petitioner will have to narrate, in the petition, the circumstances in which the company came to be dissolved and the reasons why restoration is sought. Once the court has considered the petition it will grant orders for intimation, service and advertisement of the petition. The court normally requires the petition to be served on former directors/shareholders of the company where they are not the applicant. The order will require any party with an interest in the petition to lodge answers within a specified period of time if they wish to make representations about whether the orders in the petition should be granted.
The petition must be served on the Registrar of Companies, the Lord Advocate, and the King's and Lord Treasurer's Remembrancer ("KLTR"), who is the representative of the Crown in Scotland.
After the expiry of the notice period (which can be anything between 8-21 days depending on the circumstances of the case), if no answers have been lodged with the court, the applicant asks the court to resume consideration of the petition. If answers are lodged the court will generally fix a hearing on the petition and answers. If the order for restoration is granted, the company will be treated as restored once Companies House has received intimation of the order.
England and Wales
In England and Wales, the application is made by way of a Part 8 claim. The application can be made to the High Court in London, or alternatively to one of the district registries of the High Court, regardless of where the company's registered office was located. Certain County Courts can deal with restoration applications provided that the registered office of the company is within its jurisdiction and the share capital of the company does not exceed £120,000.
Under a pilot scheme which came into force on 1 April 2025, any applications made to the High Court in London will be transferred to be heard in the County Court at Central London.
The application is accompanied with a witness statement, which among other matters, will need to provide a full explanation of the circumstances in which and the reasons why the company was struck off the Register of Companies together with the reasons why restoration is now being sought. In many cases, a company is being restored in order to recover assets that were left behind when the company was dissolved. However, there does not necessarily need to be fresh assets to realise for a restoration application to be granted. Often, it is a creditor who is looking to restore a company for the purpose of pursuing a claim or even putting the company into an insolvency process with a view to there being an investigation into the existence of any assets.
Once the court has issued the claim, it will generally set a hearing date for three months after the claim was issued. This is to allow the applicant time to comply with the requirements of the Registrar of Companies and Treasury Solicitor, as the Crown's representative. The claim will be served on the Register of Companies and the Treasury Solicitor, who will confirm in writing to the applicant whether the Crown has any objection to the order being made.
As with administrative restoration, a waiver letter from the Treasury Solicitor is required and must be filed with the Court no later than two clear working days before the hearing of the application. The County Court at Central London has adopted a practice of attempting where possible to deal with restoration cases by consent without a formal hearing and many other courts have adopted a similar practice.
Handling Ownerless Assets (Bona Vacantia)
When a company is dissolved, anything it still owns (or has title to) becomes ownerless property (bona vacantia) and automatically passes to the Crown. The management of these assets depends on the company's last registered office and the asset's location:
- Scotland: the King's and Lord Treasurer's Remembrancer (KLTR).
- England and Wales: the Treasury Solicitor, except if the registered office was in Cornwall or Lancaster, where Messrs Farrer & Co act on behalf of the Crown.
- Northern Ireland: the Crown Solicitor's Office.
The Crown may choose to sell or disclaim assets which have become bona vacantia. A disclaimer effectively renders the property ownerless. If assets are disclaimed it cannot be reversed.
Once restored, the company is deemed to have continued in existence as if it had not been dissolved or struck off. However, the position of the company on restoration in relation to its ownership of, or rights in, any particular asset will depend on whether the Crown has disposed of or disclaimed the asset in question. If the asset has been sold by the Crown, the company is only entitled to be paid compensation, typically equal to the asset's sale value minus the Crown's costs. If property has been disclaimed by the Crown prior to restoration, this will not necessarily prevent that property from re-vesting in the company on restoration, although the position differs in Scotland and England and Wales (see our previous blog).
Limitation
When ordering the restoration of a company to the register, the court can give any directions or make any orders as seems just for restoring the company and any other persons to the same position they would have been in had the company not been dissolved or struck off. This can include an order that time be deemed not to have run on claims of or against the restored company whilst it was dissolved. Whilst this could be significant in a situation where the limitation (or prescriptive) period has or is about to expire, the court will only make such an order where the company's dissolution was a direct cause of why the claim was not brought in time. It cannot put someone in a better position than they would have been if the company had not been dissolved.
Practical Considerations
Restoring a company and reclaiming its assets involves several practical steps:
- Documentation: Providing evidence of the company's previous operations, reasons for dissolution, and justification for restoration.
- Notifications: Serving documents to relevant Crown representatives, such as the Treasury Solicitor or KLTR, depending on the jurisdiction.
- Financial Obligations: Settling any outstanding penalties, filing overdue documents, and covering court or administrative fees.
Given the complexities involved, especially concerning asset recovery and jurisdictional differences, seeking legal advice is advisable to navigate the restoration process effectively.
Please visit our dedicated Corporate Disputes webpage for more information on our team and what we can offer at Brodies LLP.
