Restoring a company to the register: reasons, criteria and steps

In this article we consider the impact of when a company has been dissolved and removed from the Register of Companies (“the official register”), the reasons why a company needs to be restored to the official register, the criteria that needs to apply, and the steps involved in the restoration process.

This article in the main considers a formal application to the court to restore a company pursuant to section 1029 of the Companies Act 2006 (“the act”). However, an administration application can also be made pursuant to section 1024 of the act.

 

Why would you need to restore a company to the official register?

There are a number of reasons why a party would want to restore a company, the following list is not exhaustive:

• The company failed to comply with their filing obligations pursuant to the act, which resulted in the company being struck off the official register and former directors or members may wish to reinstate the company to continue trading.
• The company could have been voluntarily dissolved and since become aware of assets after the company was struck off the official register, which are now placed with the Crown.
• A creditor seeking to recover owed sums.
• Completing a lease or property transaction relating to a dissolved company.

 

Administrative restoration

This application is made pursuant to section 1024 of the act and is usually made by a director or shareholder of a company. The criteria that needs to be met for this application is if the company has been struck off the official register, and it was trading at the time it was dissolved, and it was dissolved in the last 6 years. This is a simple application that can be made to Companies House. If this procedure is rejected, then an application to the court can be made.

 

Application to the court to restore a company 

If the criteria for administrative restoration has not been met or if the company has been struck off the official register voluntarily pursuant to section 1003 a formal application to the court will need to be made pursuant to section 1029 of the act.

The court has the power to restore a company if an application is made by a party who has an interest in the company. Some examples of a party who has an interest are as follows:

• The secretary of state.
• A former director, shareholder, creditor or liquidator of the company.
• Any person having an interest in land or other property.
• Any person with a potential legal claim against the company, and
• Any person who had a contractual relationship with the company.

The procedure is more complicated and lengthier than administrative restoration. Proceedings will need to be issued at court together with supporting witness evidence. Witness evidence will be prepared by either the company directors, shareholders, or their legal representative acting on behalf of the company. Once proceedings have been issued, they will need to be served on the official register and the Government Legal Department (“Treasury solicitors”).

The matter will proceed to a hearing to be approved by the court. However, the application can normally be dealt with on paper if consent is provided by the Treasury solicitors confirming they have no objection to the company being restored. It is usual for the consent order to confirm that the applicant will pay the Treasury solicitors costs. In addition to these costs, the applicant will be responsible for their own legal costs and court fees. Once the consent order has been filed at court, the court will then consider the application.

 

Conclusion

The process of restoring a company is a complex but in certain circumstances an essential process which requires careful execution and a thorough understanding of the legal requirements. If you find yourself in a position when you need to consider whether you should be applying to restore a company, please contact Sophie McDonnell, Associate - Chartered Legal Executive in our Dispute Resolution team to receive further advice and assistance. Should you need any further assistance or advice on any other corporate disputes involving companies, directors or shareholders, please contact Phillip Baldwin, Partner in the Dispute Resolution team, both on [email protected].