A long company history can be a valuable asset when seeking new investors and contracts. A restored company will have a full company history and will be deemed to have been in unbroken existence since the incorporation date. A well established company may be more appealing than a newly incorporated company for potential investors.
Reinstating a dissolved company
Companies are dissolved for many reasons and for all intents and purposes they no longer legally exist after being struck off the register.
The life of a company is not always indefinite and it is commonplace for companies to be dissolved. A prevalent cause of company dissolution is the failure to file documents with Companies House but this is not the only case in which this situation may arise.
Any assets held by the company at the time of dissolution are held by the Crown 'Bona Vacantia' and a company restoration is often pursued to reclaim these assets. Retaining a company history and continuing to trade as the previous company are also common motivations to apply for a company restoration.
The alternative option is to incorporate an entirely new entity and it is important to be aware of which may be the best option for you.
Why would a company be dissolved?
Voluntary dissolution
Correcting errors
Insolvency
Administrative error
Should you reinstate a company or form a new company?
Reinstating a company
Same company number
A company number is unique to every company whether they are active, dormant or dissolved. Each company number will relate to a legal entity in it's own right.
Companies House maintain a public register that includes a comprehensive history of each entity assigned a company number and this information is easily accessible even if a company has had several name changes.
Keeping the same number will allow a company to continue with any previous contracts or accounts they had before the company was dissolved.
Reclaiming assets
Any assets held at the time a company is struck off the register are passed to the crown and held 'Bona Vacantia'. If you wish to reclaim any property or assets the company held the company will need to be restored.
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Restoring a company can be a lengthy process. Depending on the circumstances of the dissolution this would be achieved by applying for an administrative restoration or gaining a court order. Any outstanding filing penalties issued to the original company must also be settled.
Forming a brand new company is quick, simple and more cost effective. It is important to stress that this is a new legal entity in its own right and this should not be passed of as the previous company.
Forming a new company
Cost effective
Reinstating a dissolved company can be a costly process where as the cost of forming a new company would be insignificant in comparison.
Same name*
* Subject to availability.
Once a company has been struck off the register the company name becomes available for use for a new incorporation.
If it is simply the company name that is of importance to you then a new incorporation would be the logical option.
Faster
The majority of new companies are formed the same working day as they are submitted subject to Companies House.
On the other hand, a company restoration can take several weeks or even months depending on the individual case to complete.
How do I restore a limited company?
The process for restoring a company depends on the reason this was originally dissolved.
If a company was voluntarily dissolved a court order will need to be obtained to proceed with reinstating this. All statutory forms need to be brought up to date and the relevant forms need to be lodged with the courts. This process can be costly and time consuming. We would advise contacting a company restoration specialist for further assistance with this.
If the company was simply dissolved due to the failure to file documents the process is relatively stress free. Again, all statutory forms should be brought up to date and an application can be made with Companies House for the administrative restoration of the company using form RT01.