What is Company Restoration?
Company restoration is a process set out under the UK Companies Act 2006, specifically under sections 1024 to 1034, which allows for a dissolved company to be reinstated on the Companies House register.
When a company is dissolved, it ceases to exist legally; this affects not just the company’s ability to trade but also freezes its assets and stops all its legal relationships. Restoration to the register reactivates the company’s legal status, allowing it to manage and dispose of assets, settle debts, complete contracts, and continue or resume its business operations. This is particularly vital in where a company may have been dissolved while still holding valuable assets or in the middle of legal proceedings.
For example, a company might have been struck off due to an administrative oversight, such as failing to file annual returns, while it owns commercial property or is involved in ongoing contractual relationships. The only legal method to manage or regain control over these assets and interests is to restore the company to the register.
Restoration also serves justice and commercial fairness. It ensures that parties who were wrongfully deprived of their assets or who need to resolve outstanding legal disputes due to the company’s dissolution have a legal pathway to rectify the situation through company restoration.
Who Can Apply for Company Restoration?
Under the Companies Act 2006, particularly sections 1024 to 1034, the following parties are typically eligible to apply for company restoration:
- Former Directors and Members: Individuals who were directors or shareholders (members) at the time the company was dissolved have the right to apply for restoration.
- Creditors: Any person or entity to whom the company owes money may apply for restoration. This is especially relevant if the dissolution has left the creditor unable to recover the owed money. Creditors include trade creditors, loan providers, or bondholders among others.
- Other Interested Parties: In certain cases, others with a compelling interest might be able to apply. This could include former employees with outstanding claims, parties to incomplete contracts, or other individuals or entities directly affected by the company’s dissolution.
The process and eligibility may differ slightly between administrative restoration (usually applied for by former directors or members) and restoration by Court order (which may have a broader set of applicants including creditors and others).
Administrative restoration is typically more straightforward, available directly through Companies House for companies struck off due to administrative reasons, while Court-ordered restoration is a more comprehensive process involving a formal application to the Court.
For example, a company that was struck off due to non-filing of accounts but still holds valuable assets or has unresolved legal claims may be restored administratively by a former director who acts promptly within the 6-year limit. In contrast, a creditor seeking to recover debts from a voluntarily dissolved company may need to apply for a Court-ordered restoration, especially if the dissolution occurred more than 6 years ago.
Before applying for restoration, eligible parties should carefully consider the reasons for the company’s dissolution, the potential outcomes of restoration, and the responsibilities they will assume once the company is restored.
Our expert lawyers can advise on specific circumstances of the case and navigate the complexities of the application process. Call us for a Free Consultation today on 0207 459 4037.
How to Restore a Company to Companies House?
There are two ways to apply for company restoration, each with its own set of procedures, eligibility criteria, and implications.
Option 1: Administrative Restoration (sections 1024 to 1028 of the Companies Act 2006)
This route is generally available to former directors or members of the company and can be used if the company was struck off the register by the Registrar of Companies, typically due to administrative failures like not filing annual returns or accounts.
The applicant must apply to Companies House directly and must have been a director or member at the time the company was dissolved. The process involves submitting an application form (RT01), paying the prescribed fee (£100), and providing any outstanding documents or filings that the company owes. Additionally, any penalties or fees that were due at the time of dissolution must be settled.
The application for administrative restoration must be made within 6 years of the company’s dissolution.
Option 2: Court-Ordered Restoration (sections 1029 to 1032 of the Companies Act 2006)
A wider range of parties can apply for this route, including former directors, members, creditors, or any other parties with a potential interest in the company. This method is used when administrative restoration is not available — for example if the company was voluntarily dissolved or the 6-year time limit for administrative restoration has passed.
The applicant must file a claim in the High Court or a district registry. The process involves detailed legal procedures including serving the claim form on the Registrar of Companies and potentially other interested parties, providing evidence of the legitimate interest in restoring the company, and possibly attending a Court hearing.
If the company does not wish to trade, the Court will require an undertaking to be provided to the Court. This can occur when a company is being restored for a specific purpose i.e. to sell an asset.
What are the Key Steps in the Restoration Process?
Whether pursuing administrative restoration or a Court-ordered restoration, several crucial steps must be followed:
Step 1: Gather Necessary Documents and Information:
- For administrative restoration: Obtain a completed RT01 form, any outstanding documents or annual accounts, and evidence of your eligibility.
- For Court-ordered restoration: Prepare a detailed witness statement outlining your relationship to the company and the reasons for restoration, along with any other supporting documents.
Step 2: Submit the Application
- For administrative restoration: Submit the application form, documents, and the prescribed fee to Companies House.
- For Court-ordered restoration: File a claim form in the High Court or a district registry, and serve the necessary parties, including the Registrar of Companies.
Step 3: Address Any Objections or Complications:
- Be prepared to respond to any objections or undertakings requested by the Registrar of Companies or third parties.
- If there are complications, such as claims of outstanding debts or disputes over the company’s assets, you may need additional evidence and undertakings.
Step 4: Await the Decision
- For administrative restoration: If all criteria are met and the application is complete, Companies House will usually restore the company to the register without a hearing.
- For Court-ordered restoration: Attend the Court hearing if necessary, and await the judge’s decision. If successful, the Court will issue an order for the company’s restoration.
Step 5: Post-Restoration Actions
- Once the company is restored, take immediate steps to update company records, resolve any outstanding legal or financial issues, and if necessary, resume business operations.
- Ensure all future filings and legal obligations are met to avoid future dissolution.
It is important to obtain legal advice from our expert company restoration lawyers to ensure that you are not opening yourself up to additional liabilities by restoring the company. Our lawyers will be able to advise you on the best route and prepare all the necessary documents. We will also represent you at a hearing, if necessary, although administrative restorations can often be dealt with on paper with the consent of Companies House and the Treasury Solicitors.
Please call us for a Free Consultation on 0207 459 4037 today to discuss how your company can be restored.
What Evidence and Documentation are Required to Restore Company?
When applying for the restoration of a company, both administrative and Court-ordered processes require specific evidence and documentation including:
Administrative Restoration
- Application Form (RT01): You will need to complete this form to apply for administrative restoration to the register.
- Outstanding Documents: This includes any annual returns or accounts that were not filed before the company was struck off.
- Evidence of Eligibility: Proof that you were a director or shareholder of the company at the time it was dissolved.
- Fee Payment: Ensure you have the means to pay the prescribed fee to Companies House.
- Indemnity Bond (if necessary): If the Crown has disclaimed any of the company’s property as bona vacantia, you may need to provide an indemnity bond.
Court-Ordered Restoration
- Claim Form: Starting a Court claim for restoration requires a claim form detailing the request for restoration.
- Witness Statement: A comprehensive statement supporting the claim, explaining the relationship to the company, reasons for restoration, and any relevant circumstances surrounding the dissolution.
- Evidence of Company’s Operations and Dissolution: Details about the company’s trading history, financial status before dissolution, and the events leading to its striking off.
- Consent from Necessary Parties: Depending on the circumstances, you may need consent from Treasury Solicitors (if the company’s assets have passed to the Crown) or any liquidator that had been appointed.
Any errors or omissions can lead to delays or rejection of the application. For instance, a company that was dissolved with outstanding debt or legal claims would need to provide evidence that these issues are being addressed as part of the restoration process.
What are the Limitation Periods and Deadlines for Restoration?
Understanding the limitation periods and deadlines for restoring a company is crucial to ensure that you act within the legal timeframes. The limitation period differs depending on which route you choose to follow.
Administrative Restoration
Generally, you have up to six years from the date of dissolution to apply for administrative restoration. This period is set under section 1024 of the Companies Act 2006. It is important to note that if this period lapses, administrative restoration is no longer an option, and you may need to consider Court-ordered restoration.
Court-Ordered Restoration
While there is no specific statutory time limit for applying for Court-ordered restoration, it is generally advisable to apply as soon as possible after you become aware of the need for restoration. The Court has discretion in these matters and will consider the reasons for the delay in applying, the prejudice suffered by interested parties, and the overall justice of the case.
How Much Does Company Restoration Cost?
The cost of company restoration in the UK can vary based on several factors, including the type of restoration process chosen, any outstanding penalties or fees, and legal costs.
Administrative Restoration Costs
- Filing Fee: The standard fee for filing an administrative restoration application with Companies House is currently £100. This fee is required alongside the submission of the RT01 form.
- Outstanding Penalties and Fees: If the company was dissolved due to non-compliance, such as not filing annual returns or accounts, you might need to settle any outstanding penalties and fees before restoration can occur. These costs can vary depending on the length of non-compliance and the nature of the penalties. There may also be costs for Treasury Solicitors but these will be minimal.
- Indemnity Costs: If the Crown has disclaimed any of the company’s property as bona vacantia, you may need to provide an indemnity bond, which could incur additional costs.
Court-Ordered Restoration Costs
- Court Fees: Initiating a Court claim for company restoration involves Court fees, which can vary based on the Court and the specific circumstances of the case. As of the latest guidance, the fee for filing a claim form can be several hundred pounds.
- Legal Representation Costs: Given the complexity of Court-ordered restoration, legal representation is highly recommended. The costs for legal services can vary but our lawyers can act on a fixed fee basis. There may also be costs for Treasury Solicitors but these will be minimal.
While administrative restoration is generally less costly than Court-ordered restoration, the specific costs for each case can vary significantly based on individual circumstances.
What Happens After a Company is Restored?
Understanding what happens after a company is restored is critical for planning and ensuring compliance with legal obligations going forward. It will also depend on whether the applicant wishes for the company to continue to trade after dissolution or simply to restore for a purpose other than to continue the business as a going concern.
- Company Status – Once restored, the company is deemed to have continued in existence as if it had not been dissolved or struck off. This means it regains its legal personality and can continue trading, hold assets, enter contracts, and undertake other corporate activities.
- Updating Company Records – You should immediately update the company’s records with Companies House. This includes filing any outstanding documents and confirming the status of directors and shareholders. You should also ensure that you comply with annual filing requirements, such as confirmation statements and accounts, to avoid future dissolution. We have a network of accountants who will be able to manage this process for you.
- Asset Recovery – Any assets that were bona vacantia (ownerless property passed to the Crown) because of the dissolution can generally be reclaimed. This might include money, property, or other assets. The process for reclaiming these assets should begin as soon as possible after restoration.
- Resolving Outstanding Liabilities – Assess and address any outstanding liabilities or legal issues. This might include unpaid taxes, creditor debts, or unresolved legal disputes. Engage with creditors, tax authorities, or legal parties to settle any claims or disputes.
- Re-establishing Business Operations – If the company intends to resume or continue trading, take steps to re-establish its business operations. This might include notifying clients, suppliers, and other relevant parties of the company’s restored status. Review and renew any necessary licenses, insurance, or other regulatory requirements for conducting business.
Illustrative Examples of Company Restorations
Company restorations can be applicable in various scenarios and it will often be fact specific, but some common examples that our lawyers have seen include:
Recovery of Valuable Assets
A company is dissolved while it still owned valuable real estate. The former directors, unaware of the dissolution due to administrative oversight, seek to restore the company to reclaim the property. Through administrative restoration, the company can be reinstated, and the property successfully reclaimed. The company then either resumed its business operations or liquidated the asset as part of a strategic business decision.
Settlement of Legal Claims
A company was involved in ongoing litigation when it was dissolved. The opposing party in the claim can seek restoration to continue the legal proceedings and claim damages.
The company can be restored by Court order, allowing the legal proceedings to conclude. The restoration facilitates a fair trial and settlement of claims, ensuring justice and closure for all parties involved.
Continuation of Business
A profitable business was mistakenly struck off the register due to failing to file annual returns. The shareholders and employees, keen on continuing can apply for restoration. The company can be restored administratively, and business operations resumed with minimal disruption.
Revival for Merger or Acquisition
A company with potential patents and intellectual property was dissolved, but an interested party saw value in these assets for a merger or acquisition. They can applied for restoration to facilitate the business deal.
Free Consultation with Expert Company Restoration Lawyers
If you believe that company restoration is the right step for your situation, please call us for a Free Consultation today on 0207 459 4037.
Our expert lawyers will be able to guide you on which route is best for your circumstances, and ensure that you are not exposed to any additional liabilities.
