May 10, 2022

Bona Vacantia: what happens to assets left in a dissolved company?

Trainee commercial solicitor, Sophie Perry discusses what to do if you leave assets in a liquidated company and the options available to you to first dissolve the company, and then how to restore a company from these dissolutions if assets have been left behind.

There are many reasons that directors may decide to dissolve (essentially close down) a company, including; retirement of the directors/shareholders; no longer required for the purpose it was originally incorporated for; financial concerns, or insolvency.

Dissolving a company. What you need to know.

When a company is dissolved it is known as being ‘struck off’ the register at Companies House, which is essentially removing the name of the company from the official Register of Companies at Companies House.

There are two routes to dissolve a company: voluntary strike-off or compulsory strike-off.

What is voluntary strike-off?

To voluntarily strike a company off the register, the directors of the company decide (for whatever reason) to close the company and apply themselves (using a DS01 form) to Companies House to dissolve.

What is compulsory strike-off?

Whereas, a compulsory strike-off is where the Registrar of Companies at Companies House instructs that your company is struck off the register. This usually occurs due to the company no longer trading, failing to conform to legal requirements, or failing to file correct documentation (e.g., accounts, confirmation statements) within the timescales at Companies House. 

What is Bona Vacantia in relation to companies?

During the process of dissolving a company (whether voluntary or compulsory), many directors are unaware of exactly how the assets in the company will be treated. Under section 1012 of the Companies Act 2006, assets still owned by the company at its dissolution will automatically pass to the Crown, this is known as Bona Vacantia (which translates to ‘vacant goods’ and is the name given to ownerless property).

Assets include all types of property (e.g., land, property, money/cash in accounts, intellectual property rights, etc.), essentially all assets held in the name of the company. Unfortunately, a client recently mistakenly thought that money in the company account, which the directors were authorised to access (through a bank mandate), would still be able to be transferred after the company was dissolved – this was not the case.

Can you restore a company?

Depending on how a company is ‘struck off’, there are two routes to restore a company. If the company was voluntarily struck off then to restore it, the Court Order procedure is required, and if the company was dissolved through compulsory strike-off then Administrative Restoration would be applicable. 

Firstly, there are certain circumstances that are required to be met to restore your company, including:

  • Were you a director or shareholder? (i.e., do you have the authority to restore?)
  • Was the company struck off and dissolved within the last six years?
  • Was the company trading at the time it was dissolved?

Both restoration procedures involve obtaining the consent and waiver from the Treasury Solicitor (who acts on behalf of the Crown), to effectively request permission to restore your company and reclaim the assets within. Also, Companies House will require certain documentation to bring the company’s filings up to date, and there will be disbursements payable such as filling fees and if applicable, late filing penalties.

How long does it take to restore a company?

The Administrative Restoration procedure takes approximately two to three months, however, this does depend on the timescales of The Treasury Solicitor, Companies House, and the company’s accountant to produce any missed accounts.

The Court Order procedure takes approximately three to six months, as this not only involves The Treasury Solicitor and Companies House, but also the Courts and the process of serving a claim form and awaiting a paper hearing date once all documentation is in order.

Next steps

This is where the Corporate and Commercial Team at Holmes & Hills LLP can help if you leave assets in a liquated company. Holmes & Hills’ have specialist commercial solicitors who can prepare all the necessary legal documentation and liaise on your behalf with The Treasury Solicitor, Companies House, and (if applicable) the Court. So, if you require any advice or assistance please get in touch.

Get Expert Commercial Law Advice

Call 01206 593933 to speak to a specialist Commercial Law solicitor.
Or send an email.

Key Contact

Sophie Perry

Trainee Solicitor

svp@holmes-hills.co.uk

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