A company that has ceased trading can be struck off the register under section 1003 Companies Act 2006 or sometimes just by the Register of Companies. Striking off a company in this way formally dissolves the company and it ceases to exist but it is not a liquidation procedure so the assets of the company will not be returned to the shareholders by the administrator/liquidator. So what happens to them?
Under section 1012 of the Companies Act 2006, all property, and rights whatsoever vested in or held on trust for the company immediately before its dissolution (including leasehold property, but not including property held by the company on trust for another person) are deemed to be bona vancantia. They therefore belong to the Crown, or to the Duchy of Lancaster or to the Duke of Cornwall (as the case may be).
It is therefore vitally important that all assets and property of a company are extracted from the company prior to it being struck off. If the company does not have enough distributable reserves to distribute all of the relevant assets, there may need to be a reduction of capital in order to remove the final funds. This does add an extra layer of administration, but otherwise the share capital will revert to the crown.
If your company has already been dissolved and you’ve discovered that there was an unclaimed asset still owned by the company, all is not lost. There is the ability for the government’s Bona Vacantia Division to make a discretionary award to former members of a dissolved company in certain circumstances so you may still get the property back!
This article was provided by Elemental CoSec, experts in providing company secretarial services. If you would like any information about striking off a company or the bona vacantia process, please get in touch with them.
