Monday, 11 January 2016

What is the Law in Your Life?

5 things you should know about Company Striking Off and Dissolution:

1.  If a company is no longer needed it can apply to the registrar of companies to be struck off and dissolved.  This procedure is called “voluntary striking off”. An application for voluntary striking off can only be made by the company’s directors on the company’s behalf.

2.  To apply for strike off a company must complete and sign a Form DS01 and send this to Companies House with the required fee. Within 7 days of sending the form, the directors who signed the form must send a copy to all members, existing and likely creditors, employees, managers or trustees of any employee pension fund and to any directors who have not signed the form; failure to do so is an offence. Upon receipt of the Form, Companies House will, if it is acceptable, register the information and put it on the company’s public record, publish notice of the proposed striking off in the Gazette to allow interested parties the opportunity to object and place a copy of the Gazette notice on the company’s public record. If there is no reason to delay, the registrar will strike the company off the register not less than 2 months after the date of the notice. The company will be dissolved on publication of another notice in the relevant Gazette.

3.  From the date of dissolution, any assets of a dissolved company will belong to the Crown.

4.   Creditors and other interested parties can apply for a company that has been struck off and dissolved to be restored to the register. Any company which is restored to the register is deemed to have continued in existence as if it had not been struck off and dissolved.

5.   A recent decision of the Inner House of the Court of Session on appeal from the Sheriff Principal has confirmed the effect a company’s striking off and subsequent restoration to the register has on a lease when the lease is disclaimed by the Crown prior to restoration. The argument by the tenant that their restoration to the register meant that the lease continued as if there had been no interruption caused by its striking off was successful before the initial sheriff hearing the case, but lost on appeal to the Sheriff Principal. The tenant (and one of its directors) appealed to the Court of Session. The Inner House considered the effect of the disclaimer and the proper construction of the relevant provisions of the Companies Act 2006. The Inner House held that on the date the tenant was dissolved and struck off, its rights vested in the Queen’s and the Lord Treasurer’s Remembrance (“QLTR”) as ownerless property. However, the QLTR’s subsequent disclaimer of the lease meant that: (1) the tenant’s rights in the lease terminated on that date; and (2) any rights in the lease were deemed not to have vested in the QLTR as ownerless property. As a result the tenant’s rights, interests and liabilities in the lease had come to an end