Dissolution Prior to Winding-up

Part 1 Dissolution prior to winding-up

March 2010

38.2 Introduction     

The registrar may dissolve a company because he/she believes it has ceased trading and is not in operation. [Note 1] He/she may also dissolve a company upon its own application. [Note 2].

 

38.3 Company not carrying on business       

Where the registrar has reason to believe that a company is not carrying on business nor in operation he/she may remove it from the register. This procedure takes approximately six months. The registrar sends two letters to the company and a notice of intention to strike the company off the register is published in the London Gazette (Gazette). A similar notice is also sent to the company. Three months after the date of the notice the registrar may strike the companys name off the register. Notice of the striking off is published in the Gazette. On the publication of the notice in the Gazette the company is dissolved. A final notice giving the dates the company was struck off the register and then dissolved is placed on the registrars file. If approached by a creditor the registrar may delay striking the companys name off the register to enable a claim to be pursued or winding-up proceedings brought [Note 3].

 

38.4 Company application for dissolution     

Under the provisions of the Companies Act 2006 both a private and public company may apply to the registrar to be struck off the register providing they satisfy the criteria for striking off [Note 4]. There are a number of circumstances in which an application should not be made, including when the company is being wound up [Note 5]. It may be an offence for a person to make an application in these circumstances [Note 6].

 

38.5 Who receives notice of the application?

Within 7 days of making the application the applicant must send a copy of the application to anyone who, on the day the application was made was, a member, creditor, employee, manager, or trustee of any employee pension fund and to any directors who have not signed the application form. The directors are also required to give a copy of the notice to anyone who becomes a member, creditor, employee, manager, director, or trustee of any employee pension fund and to any directors before the application for striking off is concluded or withdrawn. It may be an offence if a person fails to perform these duties [Note 7].

 

38.6  How the registrar dissolves the company

The registrar will publish a notice in the Gazette advertising the proposed striking off and inviting objections. If cause to the contrary is not shown and the application is not withdrawn, the registrar will strike the company off the register not less than three months thereafter. The registrar will publish a notice to that effect in the Gazette and the company is thereby dissolved [Note 8].

 

38.7 Oversea company    

An oversea company which has traded in Great Britain may be wound up in Great Britain as an unregistered company, notwithstanding that it has been dissolved or otherwise ceased to exist as a company under or by virtue of the laws of the country where it was incorporated. (See chapter 58 generally regarding unregistered companies). [Note 9]

 

38.8 Company struck off and dissolved prior to presentation of petition 

To wind-up a company which has been struck off and dissolved it is necessary to have it restored to the register. The petitioning creditor should become aware of the dissolution when he/she makes a search of the companys file at Companies House to obtain the current registered office address in order to serve the winding-up petition. On becoming aware of the dissolution the petitioning creditor should include an application to restore the company to the register in the petition for winding-up (see paragraph 38.12) [Note 10].

 

38.9 Company dissolved after the presentation of petition

A company may be dissolved after the presentation of the petition but prior to the making of the winding-up order. The response of the official receiver depends upon the court in which the petition is presented.

 

38.10 High Court petition            

If the petition is presented in the High Court of Justice or any of its District Registries, the Petitions and Transfers team will check the name of the company on the Companies House Index at least 15 days before the hearing. Where it is discovered that the Company has been dissolved Petitions and Transfers team will write to the petitioning creditor informing them of this.

 

38.11 County Court petition       

If the petition is presented in the County Court the official receiver may check the name of the company on the Companies House Index at least 15 days before the hearing. Where it is discovered that the company has been dissolved the official receiver should write to the petitioning creditor informing them that the company has been dissolved and asking them to seek leave of the court to amend the petition to include an application for the restoration of the company to the register. 

 

38.12  Double-barrelled order    

When the petitioning creditor discovers that the company has been dissolved he/she should seek leave of the court to amend the petition to include an application for the restoration of the company to the register. On hearing the amended petition the court will be able to make an order restoring the company to the register and then winding it up. The official receiver should ensure that Form 4.13  and the winding-up order reflect the making of that order. If the forms are not correctly drafted the official receiver will be unable to file the documents at Companies House and the company will not be restored to the register.

 

38.13 Winding-up order made after a company has been dissolved      

If a winding-up order is made after the company has been dissolved, the official receiver should not proceed with the winding-up until the company has been restored to the register. However it is necessary to ensure that the company has been dissolved, as a winding-up order may validly be made against a company which has merely been "struck off" as it is still in existence although its name has been removed from the Register. [Note 11]

 

38.14 Restoration to the register 

If notice has been given that the registrar intends to strike off the company or  the company has been “struck off” but not yet dissolved, steps need to be taken to "restore" the company to the register as dissolution will automatically follow.  The official receiver should inform the petitioner by telephone, and confirm in writing, that they should apply to the court to have the company restored to the register. [Note 12]

 

38.15 Procedure to follow on discovering that a company has been dissolved prior to the making of a winding-up order      

When it is discovered that a winding-up order has been made against a dissolved company (without restoration), the usual notices and any local advertisement of the winding-up order should not be issued. It may be that the discovery of the dissolution may occur after the Gazette notice has been generated on LOIS. In this instance the official receiver may e-mail gptgazettestays@insolvency.gsi.gov.uk, within 48 hours of the issue, requesting the notice be withheld for the time being.

If the company is restored to the register the official receiver should generate a Gazette notice advertising the making of the winding-up order, as he/she is legally required to do so. 

 

38.16 Contact with the petitioning creditors solicitor         

The official receiver must immediately contact the petitioners solicitors by telephone advising them of the dissolution and requesting that they make an application to the court for the restoration of the company to the register to enable the proceedings to continue [Note 13]. This telephone call should be followed the same day with a form PSCD First Letter [Annex 1] being sent to the petitioners solicitors. As a matter of policy creditors (other than the petitioner in the early stages of a case) should not be approached by the official receiver regarding restoration.  

 

38.17 Petitioning creditors application to restore the company  

To comply with the legislation the petitioning creditors solicitors should be referred to the Treasury Solicitors Guide to Company Restoration and Dissolution Void Applications [Note14].  Notice of the application must be given to the registrar and The Treasury Solicitor (BV) or the relevant Duchy Solicitor see paragraph 38.56. This can be effected by serving a copy of the application together with a covering letter. A letter from the Solicitor concerned will be required by the court to enable it to be satisfied that the bona vacantia rights to any assets have been waived (Government Department petitioners have a blanket authority to apply and therefore do not need to obtain such letters). For more information on bona vacantia see Part 7.

 

38.18 Petition in the High Court or District Registries         

If the order was made in the High Court or District Registries, immediate contact must also be made with an assistant official receiver in the Petitions and Transfers team, so that action to transfer the proceedings to another court is suspended until the resolution of the matter. However the official receiver retains full responsibility, including expedited audit, until the status of the company is resolved.

 

38.19 Failure of petitioning creditor to apply to restore the company to the register 

If an application for restoration is not made within fourteen days of the winding-up order Form PSCD Follow Up Letter [Annex 2] should be sent to the petitioning creditors solicitors.  If no response is received within ten days the official receiver should consider restoring the company to the register.

 

38.20 Official Receivers application to restore the company       

If the petitioning creditor is unwilling to restore the company to the register the official receiver should consider making an application to the court in certain circumstances, i.e.  where there are realisable assets above the grant limit set by The Treasury Solicitor (BV) (see paragraph 38.59) or where it is in the public interest to do so. If the official receiver decides not to restore the company he/she should inform the petitioning creditors solicitor and confirm that an application to rescind the winding-up order will be made (see paragraph 38.22).

 

38.21 Company restored to the register

Once a company has been restored to the register it is regarded as having continued in existence as if it had never been dissolved or struck off the register. As a consequence at the date of the winding-up order the company would not be considered dissolved and the order would be valid [Note 15]. The official receiver should then complete his duties and administer the estate as normal.

 

38.22 Where there is no application to restore the company to the register     

If neither the petitioning creditor or the official receiver applies to the court to restore the company to the register, the company will remain dissolved. In these circumstances an application to restore the company, which might be made a number of years after the winding up-order, would result in the order becoming valid and the official receiver becoming liquidator. To avoid this happening the official receiver should apply to the court for the winding-up order to be rescinded rather than for a stay of proceedings.

 

38.23 Application for rescission            

An application for rescission of a winding-up order should normally be made within seven days of the making of that order but the court does have discretion to extend the period (see paragraph 6.83) [Note 16]. It was held in Wilson v The Specter Partnership [2007] BPIR that the jurisdiction to set aside a winding-up order should be exercised cautiously and there needs to be a good explanation of any delay in presenting the application.

 

38.24 Official receivers application for rescission

As soon as it becomes apparent that there will be no attempt to restore the company and there is no benefit to seeking restoration (see paragraph 38.20) an application for rescission should be made. The application should set out clearly the circumstances leading up to the dissolution, the dates Forms PSCD were sent to the petitioning creditors solicitor and the date the official receiver decided that it was unlikely that the company would be restored to the register.

 

38.25 Application for rescission in the High Court  

The Petitions and Transfers team co-ordinates the attendance of an assistant official receiver to represent the official receiver at a rescission hearing in the High Court. The official receiver should follow the procedure set out in paragraph 6.85.

 

38.26 Action on rescission of the winding-up order

After the rescission of the winding-up order the official receiver should process the case as per Case Help Manual part Annulments, Rescissions and recalls, procedure point 15 The administration fee charged by the official receiver and the treatment of the deposit should be in line with Chapter 6, paragraph 6.88 to paragraph 6.91. 

 

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