Restoring a dissolved company can be an involved and daunting process and there are many different reasons why restoration might be possible or even desirable. In this guide for business owners, our business dispute lawyers provide you with an overview of how company restoration works, as well as discussing some of the practicalities that you’ll need to think about if you’re considering restoring a previously dissolved business.
Contents:
- Can a dissolved company be restored?
- How do I check the status of a company to see if it can be restored?
- Who can apply to restore a dissolved company?
- What are the common reasons for restoring a dissolved company?
- How to restore a dissolved company
- Can you restore a dissolved company after 6 years?
- Are there any penalties for restoring a dissolved company?
- How long does it take to restore a dissolved company?
- How much does it cost to restore a dissolved company?
- What happens to the director of a dissolved company?
- Summary
Can a dissolved company be restored?
It’s possible to restore a dissolved company but the process for this will depend on why the company was dissolved in the first place, and this will determine whether administrative restoration or a court-ordered restoration is the appropriate route.
How do I check the status of a company to see if it can be restored?
You can check the status of a company to see if it can be restored by searching the Companies House Register, which you can find online.
Who can apply to restore a dissolved company?
Only certain parties are allowed to apply to restore a dissolved company. This means you would have to fall into one of the below categories as:
- A former shareholder (member) or director of the company at the time the company was dissolved.
- A creditor who is owed money from the company.
- Another interested party, for example, a former employee with an outstanding claim.
What are the common reasons for restoring a dissolved company?
Our business disputes solicitors normally come across a few different common reasons for restoring a dissolved company. These include:
- To resume trading: It’s sometimes the case that a company’s directors feel that restoring the company is a worthwhile for commercial reasons. If you’re in this situation as a director, it could be because you believe that the market conditions are now more favourable to your business than they were at the time of its dissolution.
- To reclaim/release assets: Restoring a company to the register can facilitate the reclaiming, sale or transfer of its assets (for example, property held by the company at the time of dissolution, or a bank account).
- For legal reasons: If a dissolved company is facing legal action, in order to defend a claim against it, it will likely need to be restored to the Companies House Register for this purpose.
- To rectify any errors: Sometimes administrative errors are made during the initial dissolution process, which may lead to the need to restore the company in order to rectify those errors.
How to restore a dissolved company
The process for restoring a dissolved company varies depending on whether administrative restoration or a court-ordered restoration is the right way to approach your situation.
Administrative restoration
You can apply for administrative restoration if you were a director or shareholder of the company, it was struck off and dissolved by the Registrar of Companies within the last 6 years and if the company was still trading at the time it was dissolved.
You’ll need to complete an application form, pay a fee to Companies House, provide them with any outstanding documents (such as company accounts or confirmation statements), pay any filing fees or penalty payments – and a waiver letter from Bona Vacantia if the company had assets.
Court-ordered restoration
If your scenario isn’t suitable for the administrative restoration procedure, you’ll need to get a court order to have the company restored. This will involve completing a claim form and paying a court fee, and you’ll also need to provide a supporting witness statement.
Taking advice from a specialist solicitor on the best way to go about restoring your company is strongly recommended so as to avoid any costly or time-consuming mistakes.
Can you restore a dissolved company after 6 years?
If you’re looking to restore a dissolved company by means of administrative restoration, you must make an application to Companies House within 6 years of the dissolution taking place. Otherwise, you’ll need to apply for a court order to have the company restored, which is a more complex and time-consuming matter. It’s definitely advisable to seek legal advice if this is the situation you’re facing.
Are there any penalties for restoring a dissolved company?
There are usually statutory penalties to pay when restoring a dissolved company. These include penalties due for accounts delivered on restoration (in cases where the accounts were overdue on the date that the company was dissolved) and any unpaid penalties outstanding on accounts submitted later prior to the company’s dissolution.
It is possible that the court may order you to pay any costs associated with the registrar dealing with any of the company’s property or assets that was/were classed as Bona Vacantia (vacant goods) while the company was in dissolution.
How long does it take to restore a dissolved company?
Company restoration is usually faster if the administrative restoration route is taken and is typically completed in the region of a few weeks. On average, a court-ordered restoration can take around 4 to 6 months if everything is in order.
How much does it cost to restore a dissolved company?
The cost of restoring a dissolved company varies depending on which process is used. In addition to any penalties that are payable, the fees involved are as follows:
- Administrative restoration: £468, payable to Companies House + £64 fee for the Crown’s waiver letter.
- Court-ordered restoration: £308 court fee, payable to HM Courts and Tribunals Service + £300 payment for the Crown’s legal costs
It’s also worth bearing in mind that there are likely to be additional fees that will need to be paid to professionals who might assist you with the company’s restoration, for example, solicitors and accountants.
What happens to the director of a dissolved company?
If you’re a director of a dissolved company, you’ll lose your authority to act on its behalf at the point of dissolution, but you might still have some responsibilities that you’re obliged to carry out during the dissolution process. Typically these duties could involve settling any debts and distributing assets, as long as the company doesn’t go into liquidation: if that has happened, these responsibilities would likely pass to the liquidator.
If the company is restored, then you’d be classed as a director again as soon as formal restoration occurs.
Summary
It’s clear that there’s a lot to think about if you wish to restore a previously dissolved company and as this article demonstrates, there are multiple unavoidable steps to take – as well as a range of different fees and penalties – to take into account if you begin the process. Ensuring that you’ve got the right professional support in place can go a long way in making what can be a complicated procedure as smooth and as streamlined as possible, which is why our experienced business disputes solicitors have a solid reputation for assisting companies of all sizes with navigating the complexities successfully.
