Reconstitution of a Company

Put simply this process allows you to bring back a company that has been dissolved either voluntarily or involuntarily. 

The term dissolving a company (or dissolution) refers to the process of: closing down a company, removing the company from the Companies House register, formally ceasing trading and losing its legal personality. There are many reasons as to why a company may have been (voluntarily or involuntarily) dissolved, however, when it comes to discussing the reconstitution of a company the reasons can include or be because of any of the following:

• Company has been struck off for failing to file annual returns and accounts, but its business continues to trade.
• A company has dissolved but another party has an unresolved claim against the company and wants to take some action against it to obtain compensation or redress.
• The company had title to an asset when it was dissolved that is of value or importance – this relates to where the property has vested as bona vacantia (goods without an apparent owner) because the company has lost it legal personality.
• The want or need to make significant changes to the operations, management and finances of the company. 

Worked example 1:

Before ABC Ltd had completely dissolved they agreed to transfer Westview Estate (containing six units and a roadway) to XYZ Ltd.

Thinking that they had transferred all of Westview Estate to XYZ Ltd, ABC Ltd sold their remaining assets of value and importance and dissolved the company.

Four years later, XYZ Ltd sought to sell Westview Estate to EFG Ltd. However, during the pre-contract stage they found that the roadway was mistakenly never transferred and that ABC Ltd were still the registered owners. 

As ABC Ltd is no longer a legal entity, the company’s title will be vested as “bona vacantia” (goods without an apparent owner). Therefore, in order to transfer the land to XYZ Ltd, ABC Ltd will need to be reconstituted. 

There are two ways in which a company can be restored: administrative restoration and a court ordered restoration. Please note that the route you take will depend on your particular circumstances and how the company dissolved.  

Based on our example, as ABC Ltd were not trading at the time the company was dissolved, in order to reconstitute the company, they will need to apply for a court ordered restoration. 

To apply for this court order, you must meet one of the following:

• Conducted business with the company;
• Worked for the company;
• The company owed you money when they were dissolved;
• You were responsible for their employee pension fund;
• You have a shared or competing interest in land; or
• You were a shareholder or director when the company was dissolved.

For our example, Eleanor Griffin (a current director of XYZ Ltd and a former director of ABC Ltd) has decided to apply to the courts. 

As Eleanor is a former director of ABC Ltd, she will be able to apply to the courts to restore the company, following from which she will then be able to transfer the roadway to XYZ Ltd.

To apply Eleanor will need to complete the following:

• Form N208 (a claim form to restore by court order); and
• Pay a court fee of £365; and
• Provide a witness statement in support of the claim (this will contain the supporting information outlined in section 4 of the Treasury Solicitor’s guide to company restoration). 

If the claim is successful, the court will issue Eleanor with an order to restore the Company, which she must then send to the Registrar of Companies. Following this the Registrar of Companies will restore the company. The applicant may be Ordered to pay the Registrar’s costs, these are usually in the region of £300. 

Alternatively, if ABC Ltd owed money to another individual or company, you would then need to take further action to receive either: a judgment from court for the amount of the money that is owed together with interest and costs, a statutory demand (a request for payment of debt) or a winding up petition (compulsory liquidation process).

Worked example 2:

Eleanor Griffin (a director at ABC Ltd) decided to extend her holiday in Paris, thinking Jerry (another director at ABC Ltd) would cover her workload and submit the company’s confirmation statement and accounts to Companies House. 

By reason of increased workload pressures, Jerry forgot to file the company’s paperwork, resulting in ABC Ltd accidentally failing to file their confirmation statement and accounts. This caused Companies House to start the process of dissolving ABC Ltd.

Due to further administrative error, ABC Ltd were unaware of their dissolved status and continued to trade. On her return Eleanor realised the error that had been made and wants to apply for administrative restoration to restore the company. 

Administrative restoration is where you would apply to Companies House to restore your company, as opposed to applying to the courts. 

In order for Eleanor to use administrative restoration, she would need to meet the following criteria:

• Make the application within six years of the company being dissolved; and
• The application must be made by either a former director or member of the limited company; and
• The company was trading at the time it was dissolved.

From the above facts, we can see that this criteria is met meaning she is able to submit the application. 

To apply Eleanor will need to complete and submit the following to Companies House:

• Form RT01(application form); and
• Pay a fee of £468 to Companies House; and
• Complete any outstanding documents (such as previous annual returns, company accounts or confirmation statements); and
• Pay any filing fees or penalties; and 
• If your company had any assets, you will need to apply for a waiver letter from the Treasury Solicitor, which costs £64 (this is a letter outlining the Crown representative’s consent to administratively restore the dissolved company). 

If the application is successful, the company will be restored as soon as the registrar sends you a confirmation letter. However, if you are unsuccessful, you would then need to apply to the courts for a court ordered restoration. 

Please note, the information in this article does not constitute legal advice and only acts as a guide to enable you to determine if you require our assistance. The fees mentioned in this article are correct at the date of publishing and are subject to change.

What we can do for you

Prior to commencing proceedings to dissolve your company, we can assist you with establishing, if there is any land on the property register in the company’s name at HM Land Registry, and we can assist you with any sales or transfers of the land. 

If you have dissolved your company and discovered that there is still land or property in the company’s name, we can assist with the reconstitution of the company and transfer the land or property. If we can assist you, or if you have any questions about this article, please do not hesitate to get in touch.

This article has been written by Cora Hunter and Alexandra Ronketti. 

Cora Hunter is a Paralegal in our Commercial Property Department and is based out of our offices at 8 – 10 Tuesday Market Place, King’s Lynn, Norfolk PE30 1JT. Cora can assist you with any of the land or property elements discussed in this article. If you have any questions regarding the transfer of land or property, please contact Cora on 01553 667285or at cora.hunter@wga.co.uk.

Alexandra Ronketti is a Trainee Solicitor in our Litigation Department and is based out of our offices at Market Place, Ely CB7 4QN. Alexandra can assist you if you wish to proceed with court ordered restoration discussed in this article. If you have any questions regarding court ordered restoration, or would like any assistance with this process, please contact Alexandra on 01353 646129 or at alexandra.ronketti@wga.co.uk.