We are often asked about preventing a company from being dissolved.
What is company dissolution?
To understand about preventing a company from being dissolved, you first need to understand what does dissolving a company mean?
The dissolution of a company takes place at Companies House. The Registrar of Companies will dissolve the company, which means taking it off the companies Register so that it no longer exists. There can be many reasons for the dissolution of a company and preventing a company from being dissolved will depend on why the company is due to be dissolved.
Voluntary striking off
Any company can apply to the Registrar of Companies to be struck off the Register of Companies and be dissolved. If the criteria is met, then once the application has been made a notice of the proposed striking off is published to give interested parties an opportunity to object. If there are no objections the company will be struck off the register not less than two months from the date of the notice.
Striking off by the Registrar of Companies
The Registrar of Companies has the power to strike off a company if he has reasonable grounds to believe that a company is not carrying on a business or is not in operation. This is likely if for example a company has failed to make its annual statutory filings within a reasonable period.
After a series of letters to the company, notices and following the statutory notice period, a company will be dissolved once the Registrar has published a notice that the company has been struck off. For the owner of a business looking at preventing a company from being dissolved, that business owner will need to be in contact with the Registrar of Companies to discuss why the company should not be dissolved. If there is good reason, it is unlikely that the Registrar of Companies will strike off the company if it is a viable company that is meeting its statutory obligations.
A possible reason for preventing a company from being dissolved (albeit temporarily) may be that a company insolvency process has led to the sale of some of the assets of the company, and it is important that the sale happens while the company is still live, so that if there are any problems with the sale, the company remains live in order to deal with these. For example, if there is a receivership sale of property of a company that is dissolved or intending to be dissolved.
Restoration to the Register
When a company has been dissolved or struck off the Register it may be possible for the company to be restored to the Register if various criteria is met. This can be through a court order or by what is known as “the administrative restoration procedure”. An application to the court may be made by anyone with an interest in the restoration. The administrative restoration procedure only applies to companies that have been struck off by the Registrar of Companies (not voluntarily struck off). It can be made by a former director or shareholder of the company directly to the Registrar who will restore it if certain conditions are met.
If you require advice on preventing a company from being dissolved, contact our company rescue team at Francis Wilks & Jones to discuss methods of doing so and we can talk through the procedure with you and act on your instructions.