The Registrar of Companies has power under Section 652 of the Companies Act 1985 to strike a company off the Companies Register if he has reasonable cause to believe that a company is not carrying on business or in operation.
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The Registrar may consider a company to be defunct if annual returns and accounts are not filed on time. If this is the case, he may invoke the strike off procedure which consists of sending a series of warnings to the company’s registered office. If no reply is received within a specified time limit a notice will be published in the London Gazette stating that at the expiration of three months, unless cause is shown to the contrary, the name of the company will be struck off the Companies Register and the company will be dissolved. Very often, companies do not notify the Registrar of a change of registered office resulting in companies being struck off without their knowledge.
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Alternatively, a company may be struck off the Companies Register on an application for voluntary striking-off by the directors pursuant to Section 652a of the Companies Act 1985.
Once a company is dissolved, its bank account will be frozen and its assets are deemed to be bona vacantia and will belong to the Crown, the Duchy of Lancaster or the Duchy of Cornwall depending on the location of the company’s registered office. The Crown or the Duchy of Lancaster or Cornwall (as the case may be) may then dispose of the company’s assets.
To recover its assets and continue trading, the company must be restored to the Companies Register. Upon restoration, if the company’s assets have been disposed of, the company is entitled to an amount equal to the value of the assets as at the date of the disposition.
The company or any member or creditor may apply to the court for restoration if the company was struck off at the instigation of the Registrar of Companies. If the company was struck off on an application for voluntary striking-off by the directors, any of the parties who must be notified of the application for voluntary striking- off, e.g. the members, existing and prospective creditors, employees, managers or trustees of any employee pension fund and any directors who did not sign the application form for striking- off, may apply to the court for restoration.
An application for restoration must be made within twenty years of the date of dissolution. The court will require affidavit evidence explaining how the company came to be struck off the Companies Register.
The Registrar of Companies will normally ask for the delivery prior to restoration of any annual returns, accounts or other statutory documents necessary to bring the public file of the company up to date. The rectification of any irregularities in the company’s structure, e.g. the appointment of a director and/or a Company Secretary will also be required.
Subject to the court being satisfied with the affidavit evidence and the production of a letter from the Treasury Solicitor or the solicitor to the relevant Duchy stating that no objection would be raised to the Order being made, the court will normally make an Order restoring the company to the Companies Register.
Upon delivery for registration of an office copy of the Order to the Registrar of Companies, the company will be deemed to have continued in existence as if its name had not been struck off the Companies Register and dissolved.
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These notes are intended for general guidance only and individual advice should be sought as appropriate.
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