A company I want to sue has been dissolved – can I still bring a claim?

Introduction

If a company has been struck off the register of companies at Companies House and dissolved, it no longer legally exists. This means that unless you take steps to achieve restoration of the name of the company to the register of companies, you cannot bring a claim against it.

When a company is dissolved, its assets pass to the Crown. These assets can include property, shares, cash in company bank accounts, rights of action and intellectual property rights.

As discussed in the first article in this series, if a company is pending strike off and dissolution, you should act quickly to object to the strike off to keep the company on the register.

However, if a company has already been struck off the register, all is not lost.

In this article we consider the circumstances in which you can apply for restoration of a company to the register, and thus restore your ability to pursue a claim. We also consider the process involved.

Restoration

In circumstances where you want to apply for restoration of a company, and you are not a director or member of the company[1], you must make an application to court for an order that the name of the company be restored to the register[2].

Any person with a potential legal claim against a company can apply for its restoration.

Conditions

The court can restore a company to the register of companies if it meets one of the three following conditions:

1. The company has been dissolved after winding up (under Chapter 9 of Part 4 of the Insolvency Act 1986 (IA 1986));
2. The company has been dissolved following administration (under paragraph 84(6) of Schedule B1 IA 1986); or
3. The company has been struck off the register, either through compulsory or voluntary strike off (under sections 1000, 1001 or 1003 of the Companies Act 2006).

In most circumstances, an applicant must apply to court for restoration within 6 years of a company’s dissolution.

Procedure

The procedure for applying to the court for a company restoration is by way of a Part 8 Claim Form, issued in the Companies Court, and a supporting witness statement.

The witness statement should identify, among other things:

• The reasons why the claimant has the right to make the application
• An explanation of when and why the company was struck off of the register of companies
• The reason for seeking restoration and what is intended for the company and its and liabilities once restored

The Registrar of Companies usually reviews the application swiftly, and indicates whether or not she consents.

The Companies Court has adopted a practice of, where possible, dealing with applications of this sort without a hearing:

• If the papers are in order and are accompanied by a signed consent order, the court will make the agreed order without a hearing
• If the papers are not in order, or the Court for some other reason directs, a hearing will be held where the Court will decide whether to make a restoration order

If the court does order the restoration of the name of a company to the register of companies, the restoration will take effect at the point at which the Registrar receives a copy of the court’s order.

Upon restoration, the company’s ownership of assets may depend on whether the Crown has disposed of them or any of them during the period of dissolution. If the Crown has not disposed of these assets, they will usually be re-vested in the company. Now the company is a legal entity once more, you have the ability to pursue a claim against them.

Considerations before making an application

Before spending the time and money applying to have the company restored, there are some key things to consider:

• Does the company have assets?
  • Will the company, once restored, have available assets to satisfy any judgment ultimately obtained against it in the contemplated legal action?
  • In Re Client Connection Ltd[3] the High Court noted that a creditor is entitled to apply for a company’s restoration for the purposes of investigating whether assets exist. There does not necessarily have to be obvious assets to realise for an application to be made, or for an order to be made.
• Are there any other actions you could take?
  • Is there any other defendant to the contemplated legal action, such as a director of the company?

Conclusion

If you are contemplating commencing legal action against a company, and discover that it has been struck off the register of companies and dissolved, it may be possible to apply to court for an order that the name of the company be restored to the register, enabling a claim to proceed.

We can assist you with your application to court, where you have grounds to make one, and consideration of alternative options. If you would like to discuss this further and understand what options are available to you, please contact Sophie Hay or Marie-Louise King in our Commercial and Regulatory Disputes team.

[1] Sections 1024 to 1028A of the Companies Act 2006 regulate the procedure for and effect of administrative restoration of a company to the register. Only directors and members of the company at the time of the dissolution can use this regime.

[2] Sections 1029 to 1034 of the Companies Act 2006 govern the procedure.

[3] Barclays Bank plc v The Registrar of Companies and others (Re Client Connection Ltd) [2015] EWHC 2806 (Ch)

Authors

Marie-Louise King

Sophie Hay