Visit us at www.wildercoe.co.uk The Striking off and Restoration of Companies Striking-Off The striking–off of a company is undertaken where the business or trade of a company has ceased, the purpose for which it was incorporated has ended or not materialised, or it is otherwise considered appropriate to remove it from the index of companies. In order to effect a striking-off, the company must have not carried out its normal trading activity for a period of at least three months. It can, however, settle its affairs, collect debts and pay creditors during that period. The striking-off will only really be appropriate if a company has paid its creditors in full or they have accepted that the company does not have any remaining funds and nothing is to be achieved by enforcing a liquidation. Any remaining creditors must be sent a copy of the application for striking- off within seven days of its completion and each can object to the process to Companies House. It is also not appropriate if the Company has remaining profits/share capital in excess of £25,000. If this the case, then an income tax charge will be imposed and a formal members’ voluntary winding up should be undertaken. A company may also be struck-off by action of Companies House. If annual returns or accounts are not filed on time and if reminders for such late documents go unanswered, then Companies House may take unilateral action for its striking- off. Bona Vacantia Great care needs to be taken when considering the striking-off of a company, even a long-dormant one. The directors considering this route should ensure that the company does not hold any assets or rights in its name. Upon dissolution any such rights or assets would become ‘Bona Vacantia’. This term means ‘vacant goods’ and is applied to ownerless property, which by law, passes to the Crown. Such rights or assets could include bank accounts in the company’s name, holdings of real or personal property, shares in other trading companies in the UK or loverseas or trademarks, patents or other intellectual property and pension schemes. The only way to recover such property is to restore the Company to the index of companies and to apply to the Treasury Solicitor to release the asset. The available methods of restoration will be dependent on the circumstances of the dissolution, and what, if any, are the future plans. Administrative Restoration If a company has been struck-off against its wishes, for example, by action of Companies House, and if such company was trading at the time of dissolution, then an administrative restoration may be considered. This is a more cost effective method than going through the courts. Such restoration can be applied for by the former director or shareholder of a company within six years of its dissolution. The other considerations are that the company did not itself apply for striking-off, that it was trading at the time of dissolution, and that it makes good all outstanding annual returns and accounts, including those for the years where the compa- ny did not actually exist. Upon restoration it will be treated as having existed in the intervening years. Companies House fee for the restoration is £100 and a waiver letter necessary from the treasury solicitor will be charged by him at £64. Companies House will also apply late filing penalties on all accounts that were already overdue at the time of dissolution. They will not apply late-filing penalties for any subsequent years’ accounts if the company has been dissolved for a number of years. Continued overleaf... www.wildercoe.co.uk