Removal from the register ends a company’s existence, so sections 367 to 371 of the Companies Act 1997 require warning and allow objection.
Section 367 — where the company has ceased to carry on business
(a) give notice to the company;
(b) give notice to any person entitled to a charge registered under Part XIII; and
(c) give public notice.
(a) the section under, and the grounds on which, removal is intended;
(b) that the company will be removed unless, by a date specified — not less than one month after the date of the notice — the company satisfies the Registrar by notice in writing that it is still carrying on business or there is other reason for it to continue in existence;
(c) the date on which the Registrar intends to remove the company.
The notices to chargeholders and to the public must specify the company’s name and registered office, the section and grounds, and the intended date of removal (s 367(3)).
Section 368 — the other grounds
| Ground | Public notice given by | Also notified |
|---|---|---|
| 366(1)(c) stalled liquidation, (f) late annual return, (g) overdue documents | The Registrar, by notice in the National Gazette | The company and every registered chargeholder |
| 366(1)(d) removal on request | The applicant, by public notice | The company and every registered chargeholder |
| 366(1)(e) completed liquidation | The liquidator, by public notice | — |
(a) the name of the company; (b) the section under, and grounds on which, removal is intended; (c) that the company will be removed unless, by a date not less than one month after the notice, the Registrar is satisfied by notice in writing that the ground is not applicable; and (d) the intended date of removal.
Both procedures give at least one month from the date of the notice. The person who must be satisfied differs: under section 367 the company must satisfy the Registrar that it is still trading or that reason exists to continue; under section 368 the Registrar must be satisfied that the ground relied on does not apply.
Note that a liquidator’s final report under section 307(1)(a)(iii) must itself tell every creditor and shareholder that they may apply to the Registrar or the Court objecting to removal under section 370 or 371.
Sections 369 and 370 — the effect of an objection
Where a written notice referred to in section 367(2)(b) or 368(4)(c) is submitted, the Registrar shall not proceed to remove the company unless —
(a) the notice has been withdrawn; or
(b) the facts on which it is based are not, or are no longer, correct, or have not been proved to the satisfaction of the Registrar; or
(c) the Registrar is of the opinion that the notice is frivolous.
The Registrar shall not register a removal notice where —
(a) a certified copy of a Court order under section 371(2) is submitted; or
(b) it is proved to the satisfaction of the Registrar that reasonable grounds exist for the company not to be removed.
Section 369 reverses the default. Once a written notice is submitted, removal stops unless one of three things is shown. A creditor, a chargeholder, a landlord, or a litigant with a claim against the company can preserve the company’s existence with a letter.
Paragraph (b) of section 370 is wider still: anyone may prove to the Registrar that reasonable grounds exist for the company not to be removed, whether or not they received a notice.
Section 371 — the Court’s power
(1) A person who objects to the removal of a company from the register may apply to the Court for an order that the company not be removed.
(2) The Court may, if satisfied that it is just and equitable that the company should not be removed, make an order that it is not to be removed, and such other orders as it thinks fit.
Standing is open — “a person who objects”. And the words “such other orders as it thinks fit” allow the Court to deal with the underlying problem at the same time: directing that documents be filed, that assets be preserved, or that a liquidator be appointed under section 291(2)(c) so the company’s affairs are properly wound up rather than simply abandoned.
Section 372 — the Registrar as representative of a defunct company
(1) Where, after a company has been removed, it is proved to the Registrar’s satisfaction that (a) the company, if it still existed, would be legally or equitably bound to carry out, complete, or give effect to some dealing, transaction or matter; and (b) to do so, some purely administrative act, not being of a discretionary kind, should have been done by or on behalf of the company, or would need to be done if it still existed —
the Registrar may, as representing the company or its liquidator, do or cause to be done any such act.
(2) The Registrar may execute or sign any relevant instrument or document, adding a memorandum stating that it was done under this section, and it has the same force, validity and effect as if the company, if it still existed, had duly executed it.
Section 372 solves the conveyancing problem of the company that was struck off before signing a transfer, a discharge of mortgage, or a consent. Rather than restoring the company to sign one document, the Registrar signs it.
The limits are strict. The act must be purely administrative and not of a discretionary kind, and the company must have been legally or equitably bound to do it. Where a real decision is required — whether to sell, whether to sue, whether to settle — section 372 cannot be used and restoration under section 374 is the route.
Sources
- Companies Act 1997 — ss 291, 307, 365–373; Part XIII
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.