Sections 378 to 381 of the Companies Act 1997 provide two routes back onto the register.
Section 378 — restoration by the Registrar
(a) the company was still carrying on business or other reason existed for it to continue in existence; or
(b) the company was a party to legal proceedings; or
(c) the company was in receivership, or liquidation, or both; or
(d) the company should not have been removed from the register.
Any person who, at the time of removal, was (a) a shareholder or director; (b) a creditor; (c) a liquidator, or a receiver of the property, of the company; or (d) any aggrieved person.
Before restoration, the applicant — or, where there is none, the Registrar — shall give public notice in a format approved by the Registrar setting out (a) the name of the company; (b) the name and address of the applicant; (c) the section and grounds; (d) the date by which an objection shall be submitted, not less than one month after the notice; and (e) any other matter the Registrar requires.
The Registrar shall not restore a company where an objection is received within the period stated in the notice. There is no discretion to weigh the objection’s merits — compare section 369, where the Registrar may disregard an objection that is withdrawn, incorrect, unproved or frivolous.
An objection therefore forces the applicant to the Court under section 379, where the merits are examined.
Under section 378(5) the Registrar may also require compliance with provisions the company had failed to comply with before removal — typically outstanding annual returns and filings, which is often the reason the company was struck off in the first place.
Under section 378(6) the Court may, on the application of the Registrar or the applicant, give such directions or make such orders as are necessary or desirable to place the company and any other persons as nearly as possible in the same position as if the company had not been removed. Section 378(7) confirms that nothing in the section limits section 379.
Section 379 — restoration by the Court
The Court may order restoration where satisfied that, at the time of removal —
(i) the company was still carrying on business or other reason existed for it to continue; or
(ii) it was a party to legal proceedings; or
(iii) it was in receivership, or liquidation, or both; or
(iv) the applicant was a creditor, or a shareholder, or a person who had an undischarged claim against the company; or
(v) the applicant believed that a right of action existed, or intended to pursue a right of action, on behalf of the company under Part IX;
or (b) for any other reason it is just and equitable to restore the company.
Sub-paragraph (iv) looks at the applicant’s position rather than the company’s: being a creditor, a shareholder, or a person with an undischarged claim is enough. That covers the claimant who discovers, after the event, that the defendant company has been struck off.
Sub-paragraph (v) is for a shareholder who wants to bring a derivative action under Part IX in the company’s name. Removal would otherwise defeat the claim.
And paragraph (b) — just and equitable — is open-ended, which is why an objection under section 378(4) is not the end of the matter.
(a) any person who, at the time of removal, was a shareholder or director, a creditor, a party to legal proceedings against the company, a person with an undischarged claim, or the liquidator or a receiver; (b) the Registrar; (c) with the leave of the Court, any other person.
Before making the order, the Court shall require compliance with any provisions the company failed to comply with before removal (s 379(3)), and it may give such directions or make such orders as it thinks fit to restore the position of the company and others (s 379(4)). Note that section 379 contains no six-year limit — unlike section 378(1).
Section 380 — the effect of restoration
(1) A company is restored when a notice signed by the Registrar stating that it is restored is registered.
(2) A restored company is deemed to have continued in existence as if it had not been removed.
The deeming is complete. Contracts made in the company’s name during the gap, proceedings commenced against it, and acts done by its directors are treated as if the company had existed throughout.
Section 381 — revesting of property
(1) Property vested in the Registrar under section 373 revests in the company on restoration as if it had not been removed.
(2) Except where the Court has ordered payment of an amount to a person under section 373(8)(b) in respect of that property.
(3) And except land, or an estate or interest in land, where transmission to the Registrar has been registered under the Land Registration Act (Chapter 191).
Once transmission to the Registrar has been registered under the Land Registration Act, restoration does not undo it. The company must apply to the Court under section 381(4) for an order —
(a) for the transfer of the land or interest to the company; or
(b) for payment by the Registrar of (i) an amount not greater than the value of the company’s interest at the date of registration of the transmission, or (ii) where the land has been sold or contracted to be sold, an amount equal to the part of the net amount received or receivable representing the company’s interest.
On such an application the Court may decide any question of value (s 381(5)), and an amount ordered is paid out of the section 373(10) account without further appropriation (s 381(6)) — an account from which money is forfeited 12 months after payment in. Speed matters.
Choosing the route
| s 378 — Registrar | s 379 — Court | |
|---|---|---|
| Time limit | Six years from removal | None stated |
| Grounds | Four, all about the company’s position at removal | Five, including the applicant’s position and a derivative action — plus just and equitable |
| Applicants | Shareholder, director, creditor, liquidator, receiver, any aggrieved person | The same, plus a party to proceedings, the Registrar, and with leave any other person |
| Effect of objection | Fatal — s 378(4) | Argued on the merits |
| Cost and speed | Cheaper; one month’s public notice | Slower and more expensive |
Where the only object is to pursue the company’s own assets or to have it wound up, note the shortcut in section 377: the Court may appoint a liquidator without first restoring the company.
Sources
- Companies Act 1997 — ss 291, 369, 373, 377–381; Part IX
- Land Registration Act (Chapter 191)
Before relying on anything here, read the current text of the Companies Act 1997 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.