I recently received an enquiry from a client who had allowed their company to be struck off the Register at Companies House as it was dormant and they had no need for it any more. The company had been set up as a special purpose vehicle for a one off project and when it became clear the project was not going to go ahead, the directors of the company decided that rather than deal with the administrative hassle of the Confirmation Statement and dormant company accounts with Companies House, they would allow the company to be struck off by the Registrar.
However, the company did in fact own some assets. Those assets included a cash balance in a bank account. The first the directors knew of any problem was when the bank wrote to the directors to explain that the money held in the account had been returned to the Treasury as assets of the Crown! This was because once the bank had been notified that their client company no longer existed, they had no right to hold the account balance on behalf of that non existent party. The client wanted to know what they could to recover that money as it was a substantial sum.
The Companies Act 2006 changed the rules on how a company can be restored to the Register at Companies House. It used be the case that you could only resurrect a company by application to Court – a costly process. There is however now a simpler (therefore quicker and cheaper) method of bringing a company back to life. This process, known as Administrative Restoration, requires certain forms, a fee and any necessary backdated Companies House filings to be submitted. There may also need to be consent to the restoration from the Government Legal Service (acting for the Treasury) or alternatively from a firm of Solicitors who act for the Duchies of Lancaster and Cornwall (depending on where in the country the company had been based). Once that consent has been obtained and the relevant forms submitted to Companies House, in most cases, the company will be restored to the Register. Once the company is back in existence, an application can be made for return of funds.
In a period of just a few weeks, I was able to deal with the various applications required on behalf of the directors of the company and reunite cash with company!
Having recovered the client’s money, I wondered what lessons could be learned from the unfortunate situation. I suppose a big one is to check whether your company owns anything before you allow it to be struck off the Register! The main lesson I learned though was that “lost” assets need not drop into the hands of the Crown too easily. The process for recovery is fairly swift and by no means costs prohibitive. Therefore, if you think you may have assets that have passed to the Crown and would like assistance in recovering them, please get in touch. There’s a good possibility that we can recover the assets and it might be quicker and cheaper than you think to do so!
If you have found yourself in a similar situation and would like legal advice tailored to you, please get in touch on 0845 287 0939 or email us.