8 November 2006
1267.These Chapters restate sections 652 to 654 and sections 656 to 658 of the 1985 Act with no changes of effect, except as described below for sections 1003 and 1013.
1268.Section 652A of the 1985 Act currently provides that, in certain circumstances, a company may apply to the registrar to be struck off the register. The provision is limited to private companies. This section, in restating that provision, no longer includes the limitation, with the effect that public companies too may now apply for voluntary strike-off.
1269.Where a company is dissolved while still holding property, that property passes to the Crown. Section 656 of the 1985 Act provides that the Crown’s title to the property may be disclaimed by means of a notice signed by the Crown representative.
1270.At present this disclaimer must generally be executed within 12 months of the date on which vesting of the property came to the notice of the Crown representative or within three years of the Crown representative receiving an application from an interested party. This section, in restating the relevant provisions, extends the 12-month period to three years, and provides that, if the ownership of the property is not established when the Crown representative first has notice that the property may have vested, that period runs from the end of the period reasonably necessary for the Crown representative to establish ownership.
1271.Section 656 of the 1985 Act also provides that a disclaimer may be made within three years of the Crown representative receiving an application from an interested party. This section changes this to 12 months.
1272.Under the 1985 Act, where a company has been struck off the register, mechanisms are available (sections 651 and 653) by which the company may be restored to the register following a court order. The CLR (Final Report, pages 227 to 229) recommended that an alternative, administrative restoration procedure should be available in certain circumstances. Sections 1024 to 1028 make provision implementing that recommendation.
1273.This section provides that an application may be made to restore a company that has been struck off under sections 1000 or 1001; that it can be made whether or not the company has also been dissolved; that the application must be made by a former director or former member of the company, and that it must be made within six years of the date of dissolution.
1274.This section sets out the requirements for restoration, including the conditions that the company was carrying on business or in operation at the time of its striking off; that the Crown representative has given any consent that may be necessary; and that the applicant has delivered any documents necessary to bring the registrar’s records up to date and has paid any penalties due at the date of dissolution or striking off.
1275.This section provides that an application for restoration must be accompanied by a statement that the applicant has the necessary standing to make the application and that the requirements for administrative restoration have been met. The registrar may accept the statement of compliance as sufficient evidence of the matters stated in it.
1276.This section provides that the registrar must give notice of her decision, and that (if the decision is that the company is restored) the restoration takes effect from the date that notice is sent. The section also sets out the consequential actions the registrar must take.
1277.This section provides that the effect of restoration is that the company is deemed to have continued in existence as if it had not been struck off, and that application may be made to the court within three years of restoration for the court to make such directions as may be needed to place the company itself, and other persons, in the same position as they would have been had the company not been struck off.
1278.These sections bring together what are currently two separate procedures for a company to be restored to the register by court order (under sections 651 and 653 of the 1985 Act). The CLR recommended (Final report pages 227 to 229) that the two separate procedures be replaced by a single new procedure, which should largely be based on the precedent of the procedure under section 653 of the 1985 Act.
1279.The section sets out that an application may be made for the restoration of companies which have been dissolved, are deemed to be dissolved, or have been struck off under the various provisions set out in subsection (1). Subsection (2) sets out the persons who may make such an application.
1280.At the moment, applications to the court under section 651 of the 1985 Act must be made within two years, and under section 653 within twenty years. This new section provides that the time limit for the new single procedure will generally be six years, although special provision is made (subsection (5)) for situations where an application for administrative restoration has been made and refused.
1281.Subsection (1) makes clear that there is no time limit where the application is for the purpose of bringing proceedings against the company for damages for personal injury.
1282.This section sets out the circumstances in which the court may order restoration (including any case in which the court considers it just to do so) and provides that restoration takes effect when the court’s order is delivered to the registrar. It also requires the registrar to give appropriate public notice of the restoration.
1283.This section provides that the effect of restoration is that the company is deemed to have continued in existence as if it had not been struck off, and that the court may make such directions as are needed to place the company itself, and other persons, in the same position as they would have been had the company not been struck off. The court may also make directions as to the issues set out in subsection (4) to do with the company’s file at Companies House and costs.
1284.This section establishes the fundamental position that a company is restored to the register with the name it had before it was struck off, but also makes new provision for circumstances where restoration of a company would have the effect that two companies with the same or very similar names would appear in the registrar’s index. There is a procedure for the restored company to change its name.
1285.This section replaces section 655 of the 1985 Act with little change of substance. However, it makes new provision (subsection (3)) that, where a company’s property has passed to the Crown and been disposed of, the Crown, in reimbursing the newly restored company, may deduct the reasonable costs of sale which were incurred.