Strike-off, Dissolution and Restoration
This guide is a guide to having your company removed from the register of companies.
A company may be struck off the register and dissolved if:
- it has applied to the Registrar to be struck off or
- the Registrar concludes that it is not carrying on business or in operation
You will find the relevant law in the Companies Act 1985, Section 652 and Sections 652A to 652F which were inserted by the Deregulation and Contracting Out Act 1994.
Voluntary striking-off and dissolution
A private company that is not trading may apply to the Registrar to be struck off the register.
A private company can apply to be struck off if, in the previous three months, it has not:
- traded or otherwise carried on business
- changed its name
- for value, disposed of property or rights that, immediately before it ceased to be in business or trade, it held for disposal or gain in the normal course of its business or trade
- engaged in any other activity except one necessary or expedient for making a striking-off application, settling the company's affairs or meeting a statutory requirement
- any insolvency proceedings or a Section 425 scheme
What should I do before applying?
There are safeguards for those who are likely to be affected by a company's dissolution. If your company has creditors, members etc, you are advised to warn these people before applying as any of them may object to the company being struck off.
It is also advisable to notify any other organisation or party who may have an interest in the company's affairs, otherwise they might later object to the application.
From the date of dissolution, any assets held by a dissolved company will belong to the Crown. The company’s bank account will be frozen.
Who must I inform?
Within seven days after sending Form 652a to the Registrar, you must provide copies of the form to the following:
- members, usually the shareholders
- creditors including all existing and prospective creditors such as banks, suppliers, former employees if they are owed money by the company, landlords, tenants, guarantors and personal injury claimants. Also, you must notify appropriate offices of the HM Revenue & Customs
- employees
- managers or trustees of any employee pension fund and
- any directors who have not signed the form
- All VAT registered companies must notify the relevant VAT office
Informing various parties
A copy of the Form 652a should be delivered to, left at, or posted to them at:
- the last known address if an individual
- the principal/registered office if a company or partnership
To notify creditors who have more than one place of business, send copies of the form to the places of business where the company has had dealings in relation to the current debts.
The Registrar will put it on the company's public record.
Objecting
Objections must be in writing and sent to the Registrar of Companies with any supporting evidence. Reasons for objecting include:
- the company has broken any of the conditions of its application
- the directors have not informed interested parties
- any of the declarations on the form are false
- legal action is being taken against the company
- the directors have wrongfully traded or committed a tax fraud or some other offence.
Defunct companies and Form 652a
If it is neither in business nor in operation. The Registrar may take this view if, for example:
- he has not received documents from a company that should have sent them to him or
- mail he has sent to a company's registered office is returned undelivered.
Before the Registrar strikes a company off the register, he must inquire whether it is still in business or operation. If he is satisfied that it is not, he will publish a notice in the London Gazette that he intends to strike the company off. A copy notice is placed on the company's public record. The Registrar will strike the company off not less than three months after the date of the notice. The company will be dissolved on publication of a further notice stating this in the Gazette.
Assets of a dissolved company
From the date of dissolution any assets held by a dissolved company will be 'bona vacantia'. This means they belong to the Crown. The company’s bank account will be frozen and any credit balance in the account will be passed to the Crown.
Applying to have a company restored to the register
For companies struck off following a Form 652a application: any of the parties who must be notified of the application can apply to the Court within 20 years of dissolution for the name of the dissolved company to be restored to the register. The Court may order restoration if it is satisfied that:
- the person was not given a copy of the company's application
- the company's application involved a breach of the conditions of the application or
- for some other reason it is just to do so.
For companies struck off at the instigation of the Registrar: the company, or a member or creditor of it, can apply to the Court for restoration within 20 years of the dissolution. When a company applies for its own restoration, a member of the company must also be an applicant to give any necessary undertakings to the Court.
Where a company is dissolved: the liquidator or any other interested party such as a creditor can apply to the Court for the dissolution to be declared void. In most cases an application must be made within two years of dissolution, but it can be made at any time if its purpose is to bring proceedings against a company for damages for personal injuries.
Evidence
The Court will require an affidavit or a witness statement confirming that:
- the originating document was served and
- the solicitor dealing with the bona vacantia assets has no objection to the restoration of the company and a copy of his or her letter should be attached to the affidavit or witness statement.
- when the company was incorporated and the nature of its objects - a copy of the certificate of incorporation and the memorandum and articles of association should be attached
- its membership and officers
- its trading activity and if applicable when it stopped trading
- an explanation of any failure to deliver accounts, annual returns or notices to the Registrar of Companies
- details of the striking-off and dissolution
- comments on the company's solvency
- delivery of any statutory documents to bring the company's public file up to date. These should be sent to the Registrar at least five working days before the hearing to allow him time to process and examine them as they may have to be returned for amendment;
- the correction of any irregularities in the company's structure.
Costs and Penalties
The Treasury Solicitor, whose costs are normally met by the Claimant(s), will represent the Registrar. The company must normally pay any statutory penalties for late filing of accounts delivered to the Registrar outside the period allowed by the Companies Act 1985. The penalties that may be due are:
- unpaid penalties outstanding on accounts delivered late before the company was dissolved and
- penalties due for accounts delivered on restoration, if the accounts were overdue at the date the company was dissolved.
The level of any late filing penalty depends on how late the accounts are the Registrar receives them, as shown in this table.
| Length of delay, measured from the date the accounts became due (excluding the period of dissolution) | Private company | Public company |
|---|---|---|
| 3 months or less | £100 | £500 |
| 3 months and one day to 6 months | £250 | £1,000 |
| 6 months and one day to 12 months | £500 | £2,000 |
| More than 12 months | £1,000 | £5,000 |
Late filing penalties are not normally collected for accounts received on restoration that became due while the company was dissolved.
What happens when the order for restoration is made?
The Registrar cannot restore a company to the register without a Court Order. When the Registrar receives an office copy of the Court Order for restoration, a company is regarded as having continued in existence as if it had not been struck off and dissolved. An office copy of the order with the court seal must be delivered to the Registrar by the applicant wishing to restore the company.