At the end of a company’s life in the UK, it will normally be formally dissolved and removed from the register of companies. Notice is then placed in the Gazette that the company is to be struck off the register, at which point it is officially dissolved. In doing so, the dissolved company is no longer a legal entity. But this is not necessarily the end as it is possible to restore a dissolved company to the register of companies. In this guide, we will outline, step-by-step, the process of restoring a dissolved company to the register of companies.
Why would a dissolved company be restored to the register of companies?
There are a number of scenarios under which a dissolved company may be restored to the register of companies, including where:
- The company was dissolved against the wishes of its members and they now wish to resume trading.
- To repay debts that existed when the company was dissolved.
- The company held title to assets before dissolution that members now want to realise.
- The company failed to meet its legal duty to file its annual accounts and was struck off the register. In this case the business may continue to trade and later be undissolved.
- Where there is a claim against the company that is yet to be concluded and the claimant wishes to take action to obtain compensation.
Regardless of the reason for wishing to restore the company, there is a strict process that must be followed in order for this to be done properly and in accordance with UK company law.
How is a dissolved company restored to the register of companies in the UK?
There are two ways to restore a dissolved company:
- Administrative restoration – this process involves the restoration of a company without needing to apply to the court. This is not possible in all situations and certain conditions must be met to use this method of restoration, as we will explore below. The procedure is regulated by Sections 1024 to 1028A of the Companies Act 2006 (CA 2006)
- Restoration by court order – whereby a company is restored by the court.
In the following sections we will explain how to apply to restore a company to the register of companies using both of these methods.
The process of administrative restoration
Administrative restoration is mainly used where the company was dissolved as a result of being struck off of the register of companies following a breach of the annual accounts/return filing requirements (this is referred to as an involuntary strike off), and the company continued to trade. The administrative restoration process is as follows:
- Check that the conditions are met for administrative restoration – this means that:
- you must have been a director or member of the company when it was dissolved.
- the company must have been struck off under sections 1000 or 1001 of the CA 2006 or under section 652 of the CA 1985.
- the dissolution must have been no more than six years before the date of the application to restore the company.
- the company must have been operational at the time of striking off.
- a bona vacantia waiver letter should be provided by the Crown to confirm their consent to the restoration and that they will release any assets held (where any property or right of the company has been vested in the Crown).
- all documents required to bring the company’s records up to date must be provided (e.g. the annual accounts)
- the applicant has paid or has undertaken to pay any late filing penalties outstanding for failure to meet the annual accounts reporting duties. It is important to note that you will not be charged late filing fees for the time between the date of the dissolution and the date of applying to restore the company. As such, you will only need to pay the penalty that was due on the date the company dissolved.
- Send the following documents to the Companies House Registrar:
- Completed and signed form RT01 (sections 1000 or 1001 of the CA 2006). This includes a Statement of compliance confirming the applicant is legally eligible to apply, and the conditions above have been met. The statement of compliance wording states on page 1 of the application form, “I confirm that I am a former director/member making this application and the requirements for administrative restoration under section 1025 of the Companies Act 2006 have been met”.
- An application fee of £100 payable to Companies House
- Wait for a decision from the Registrar
Application to restore approved
If the application to restore the company to the register of companies is approved by the Companies House Registrar, the restoration will take effect from the date they notify the applicant of the decision. The register will then be updated with the restoration date of the company and a notice of restoration will be published in the Gazette. This notice will include the name of the company, the company registration number, and the effective date of the restoration.
Application to restore refused
Where the Registrar refuses an application to restore a dissolved company, it is possible to then apply for a restoration order from the court within 28 days (see the court process below).
The process of court restoration
The court restoration procedure is typically used where the company was in the process of being made insolvent when it was struck off the register. Applications can be made to the court for restoration where:
- a claimant wishes to bring a claim against the company (e.g. for damages or personal injury).
- an insurer needs to bring proceedings against a third party in the name of the restored company to recover contributions in respect of a personal injury liability for which the insurer has paid out damages.
- administrative restoration was refused.
- the conditions are not met for administrative restoration.
The court restoration process is as follows:
- Check that the conditions are met for court restoration – this means that:
In addition to the above conditions for court restoration, one of the following must apply:
- the application must be received by the court no more than six years after the dissolution of the company. This is only 28 days where an administrative restoration application was refused by the Companies House Registrar.
- the applicant must be one of the following:
- a former member or director of the company.
- a creditor at the time of dissolution.
- a person with a contractual relationship with the company before the dissolution.
- parties with a legal claim against the company.
- parties with an interest in land in which the company had a superior or derivative interest.
- parties with an interest in land or other property that was subject to rights vested in the company or that was benefited by obligations owed by the company.
- a manager or trustee of a pension fund established for the benefit of employees of the company.
- a former liquidator of the company.
- the Secretary of State.
- Any other person who appears to the court to have an interest in the matter.
- the company was dissolved under Chapter 9 of Part 4 of the Insolvency Act 1986 (IA 1986) (dissolution of company after winding up), or;
- the company was dissolved under paragraph 84(6) of Schedule B1 to the Insolvency Act 1986 (dissolution of company following administration), or;
- the company was struck off the register under section 1000 or 1001 (power of Registrar to strike off defunct company) or under section 1003 (voluntary striking off).
- Complete the claim form (as laid out under part 8 of the CPR 1998)
- Once the claim form is submitted to the court, a hearing date is typically set for within three months. If the requirements of the Registrar of Companies are met and any consent required is given by the Treasury Solicitor, a consent order will be issued by the court.
What is the effect of restoration?
By restoring a company to the register, it is effectively treated as though it was not dissolved and that all parties have been put back in the same position they held prior to the dissolution occurring. Where parties are not put back to their prior position, for whatever reason, a court application may be made with a view to doing so.
As we have outlined in this guide, restoring a dissolved company is a lengthy and potentially costly process. It is important to consider all of your options if you wish to resume trading, and restoration is only one such option. For this reason, we recommend speaking to a company formation specialist who can explain all of the possible routes based on your short, medium, and long term business goals. If restoration is right for you, we can handle the process on your behalf or guide you through each stage, ensuring it is done correctly and with the least possible overhead.