Business Law & Compliance · 11 March 2022

How To Restore A Dissolved Company?

Can I Restore a Dissolved Company

When a company is dissolved, it ceases to exist as a legal entity. This can happen for a number of reasons and can have serious consequences for the company’s directors, employees and creditors. However, there is hope for companies that have gone through dissolution as it is possible to restore a dissolved company in the UK.

This process can be difficult, but in this guide, we will explain everything you need to do to get your company back up and running.

What is a Dissolved Company?

A dissolved company is a company that has been legally closed down. This can happen for a number of reasons, including but not limited to:

  • The company did not file its annual return
  • The company failed to pay its taxes or fees
  • The company was struck off the register for failure to comply with Companies House regulations
Whatever the reason for the dissolution, a dissolved company is no longer a legal entity and so it cannot carry out any business activities. This means that the company’s directors, employees and creditors are all left in a very precarious situation because they are no longer protected by the company’s limited liability and they could potentially lose a lot of money.

What Happens to a Company’s Assets When It is Dissolved?

When a company is dissolved, its assets are passed to the Crown. This means that the company’s property, money and other assets become government property. This is called Bona Vacantia which literally translates to “unowned property”. These assets can include:

  • The company’s property
  • Money in the company’s bank accounts
  • Unpaid debts of the company
  • Shares and other assets of the company
It is important to note that Bona Vacantia does not include any personal assets of the directors or employees of the dissolved company. Restoring a dissolved company makes it possible to get these assets back but it is not always easy.

What does Restoring a Dissolved Company Mean?

Restoring a dissolved company means bringing it back to life as a legal entity. This process can be difficult because a lot has to be done in a short space of time and there are a lot of hoops to jump through. The process is intentionally difficult because the authorities want to discourage people from dissolving their companies in the first place.

Different countries have different laws and regulations regarding restoration but some of the most important things for UK business owners to know are:

  • You must apply for administrative restoration with Companies House
  • The process can take weeks or even months
  • You may have to pay a penalty payment and filing fees
  • You will need to provide documents like accounts or bank statements to show that the company is viable
  • You cannot restore a company that has been struck off the register via the normal process. This must be done through Court Restoration.
All of this will be explained in more detail below so that you know exactly how restoration works.

Why Do People Restore a Dissolved Company?

There are a number of reasons why people might want to restore a dissolved company. For directors, restoring a company can mean saving their personal assets from being seized by creditors. For employees, it means keeping their jobs and for creditors, it means getting back the money they are owed.

There are also a number of benefits to restoring a company as opposed to setting up a new one, including:

  • The ability to continue using the same company name
  • The retention of the company’s assets
  • A shorter time frame for restoration
  • The ability to use the company’s existing bank accounts
Whatever your reasons, it is important to understand that restoring a dissolved company is not an easy process and it will take time and money.

restoring a dissolved company

Applying for Administrative Restoration with Companies House

The first step in restoring a dissolved company is to apply for administrative restoration with Companies House. This can be done by sending form RT01, along with a £100 cheque made payable to ‘Companies House’, to the address shown on the form. You will also need to send copies of your company’s accounts or bank statements, as well as penalty payments and filing fees. In addition, you may also need a Bona Vaca waiver letter depending on the circumstances of your case. This is a letter from the company’s directors stating that they are aware of the restoration process and agree to the restoration taking place. It is necessary because the company’s assets will be frozen during the restoration process.

If your application is accepted, Companies House will contact you and let you know what to do next. They will also inform any creditors of the company’s restoration. It usually takes between four and six weeks for a company to be restored through administrative restoration.

You can also apply for administrative restoration online but you will need to have a digital certificate or an account with Companies House Online Services.

Applying for Court Restoration

If you are unable to restore your company through administrative restoration, you can instead apply for court restoration. This is a more complicated process and it is advisable to get legal advice before starting the process because it can be difficult to navigate. The main difficulties usually involve proving that the company was solvent at the time of dissolution and that all efforts were made to restore it administratively.

Who Can Apply for Court Restoration?

Only certain people are able to apply for court restoration. These include the company’s directors, shareholders, employees and creditors. The application must also be made through a solicitor.

Court restoration can take anywhere from a few weeks to several months. The length of time it takes depends on a number of factors, including whether or not any objections are raised by creditors or the Official Receiver.

If your company was struck off the register or was subject to a winding-up order, you will not be able to apply for administrative restoration and so your only option will be court restoration. Winding-up orders are given to companies for a number of reasons including:

  • The company has failed to pay its taxes or fees
  • The company was struck off the register for failure to comply with Companies House regulations
  • The company is insolvent and cannot pay its debts
A winding-up order is a serious matter and should not be taken lightly. If your company is subject to a winding-up order, it is highly recommended that you seek legal advice before applying for restoration.

How to Apply for Court Restoration

If you decide to apply for court restoration, you will need to complete form C100 and send it to the Court of Session. You will also need to send a copy of the form to any creditors who have registered an interest in the company. There is a fee of £200 for applying for court restoration, which must be paid at the same time as the form is submitted.

Once the form has been sent, the Court of Session will appoint a liquidator to investigate the company and determine whether or not it should be restored. This will depend on a number of factors such as the company’s assets and liabilities. If the liquidator decides that the company should be restored, they will issue a report to the court.

The court will then decide whether or not to restore the company. This usually happens within six months of the application being made, but it can take longer in some cases.


 
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