How to Restore a Dissolved Company in the UK

Are you considering reopening your company that was recently closed down for good? Although it seems uncommon, you can reopen your company in the UK. But can you revive it and pick it up from where you dissolved? It's possible to revive your dissolved company, although several requirements and restrictions could make the reopening process complex.

In this blog, you'll learn ways you can revive your company and the protocol for using the dissolved business name.

What's a Dissolved Company in the UK?

A dissolved company is a company that underwent a formal process of closing down. This is achieved by striking off the company's house register. A company in the UK can be dissolved voluntarily or involuntarily. This is the most straightforward way of closing down a company.

There are two terms used in dissolving a company.

• Solvent liquidation: this refers to when the company comes up with a closing down decision. The decision is made when directors wish to retire, no longer see the benefit of the business running or want to start a new venture.
• Insolvent liquidation: this occurs when a business can longer operate due to pressures like financial commitments or debts. During liquidation, the company is struck off, the assets are sold to repay the creditors.

Is it Hard to Reopen a Dissolved Company in the UK?

You can reopen your dissolved company either through administrative restoration or through a court order. Administrative restoration is a process you will follow if your company is dissolved through non-compliance. Conversely, if your business was struck off through voluntary dissolution, only a court order can restore it to business.

Why is a Dissolved Company Restored?

There are three reasons why a dissolved company can be restored

1. To trade again: after a clear thought, the company director may decide to restore their business and start trading again.
2. To give directors and shareholders the ability to reclaim Bona Vacantia assets: before dissolving a company, shareholders and directors should remove any assets belonging to the company. If the company fails to remove the assets and property, they are passed to the crown automatically, a process known as Bona Vacantia. Fortunately, if this happens, the directors or shareholders can complete business restoration and bring back the company's assets.
3. To allow third parties to retrieve their debts to the company: in case a company was closed because of a debt, creditors can request the court to restore the company to enable them to collect their debt.

Types of Company Restorations

The company can be restored through two methods: a court order and administration restorations. The method used in restoring the company depends on how it was closed.

Administrative Restorations

You can use an administrative restoration to restore your business within six years from the date of dissolution. You will be able to restore the company through administrative methods if

• The business was involved in trading transactions at its dissolution time
• The business was dissolved involuntarily due to late filing or not filing the annual accounts
• If the person who is completing the application is a shareholder or a director

This process may be expensive and time-consuming, so be prepared. It involves moving parts, forms to fill and steps you must complete. You should send the following to the Companies House

• Fill out the RT01 form:  this is the application for the administrative restoration form, which you must fill offline since there is no online equivalent and a cheque of £100, which you will pay at the company house.
• If your intention to restore the business is to retrieve company assets, you will send the company's house a waiver letter. The letter includes the location of the business registered office and the location of the property. To know more information about waiver letters, check UK waiver letter instructions.
• You should also prepare annual reports confirming statements and other statutory forms that could have been submitted if the company wasn't dissolved. Be prepared to pay other filing fees. For example, suppose the dissolution process depends on submitting two years' worth of confirmation statements, each of which has a filing fee of £40. In that case, you'll also need to include an additional payment of £80.

How Long will it take for Administrative Restoration to take Place?

It takes about a month to restore your business if your application gets accepted. You get a confirmation letter from the registrar, and your company will be visible on the register of the company's house. However, the notice of your company's previous dissolution will still be visible.

If your administrative restoration is rejected, check the reason behind the rejection and try a court-order restoration method.

Court Order Company Restoration

Suppose you cannot meet the administrative restoration criteria, like the company was closed voluntarily, or you aren't a shareholder or director. In that case, you can restore the business through a court order. Just like in administrative restoration, the company must be dissolved not more than six years.

This avenue is used by third parties who want to retrieve a debt, although directors and shareholders can also use it to restore a dissolved company. For example, if you're a company creditor, and you have an unfulfilled contract with the company, and they owe you money during dissolution, you may apply for a court order. A court-mandated restoration is not as intensive and time-sensitive as administrative restoration. This is because you don't need to file annual returns or accounts, and there's no penalty for overdue accounts.

The court restoration process requires you to create a witness statement for the court. You also need to pay a £280 administration fee. After receiving the application, the court should issue a claim to the treasury solicitor and registrar of companies before a Bona Vacantia letter is required.

If the court accepts your application, it will make an order which will be served to the registrar of companies, and your company will be restored officially. However, you should note court restoration is only temporary. This process is used to restore the company for a short time to allow creditors to recover debts and pursue claims. A successful restoration will enable applicants to

• Issue statutory demands
• Get a judgment for the money owed by the company with interest and cost
• Apply for a compulsory liquidation if the business can't afford to pay its debts.

How Long will a Court Order take to Restore a Dissolved Company?

In most cases, it depends on the company's case, although the restoration can take up to four months.

Do You Need Help Forming Your Company in the UK?

Incorpuk offers a range of fast and efficient online company formation services that makes it easiest and cost effective way to take your business global quickly. Kindly contact incorpuk if you need any help on company formation services today.

Discretionary Grant is a Process of Restoring a Dissolved Company in the UK.

If you wish to restore a company to recover assets, you may look into a discretionary grant, which Bona Vacantia Division manages. This is a process that allows liquidators, former shareholders administrators and voluntary company supervisors to recover up to £3,000 without restoring the company. Former directors of the company cannot use this process. To qualify for a discretionary grant, the claimant must have no intention of restoring the business.

Can I Use the Name of a Dissolved Company?

You can use the name of a dissolved company and use it for your new company. However, some rules prevent directors of recently liquidated companies from doing so to avoid abusing the system. These rules include not using the name of a recently liquidated company which was in business in the last 12 months. If these rules do not hinder you, there are no more restrictions, but consider the old business reputation.

For example, if the business was dishonest, your new business may be associated with that. Conversely, if the dissolved company had a good reputation, your new business could benefit from that positive connection.

Conclusion

You can restore a dissolved company in the United Kingdom, a process that is costly and time-consuming. Before you think about restoring your dissolved company, ensure you weigh the pros and cons, considering your application may not be successful. If you want to trade again, opening a new company may be a more appealing option than restoring the dissolved one and recovering old debts. If you're still unsure of which path to take, you may always seek professional advice.