Collecting a debt from a dissolved company

Owed money from a dissolved company?

Collecting a debt from a dissolved company can be a complex process. Very often, a company is closed because it is unable to pay its debts. Very often, the company will go into liquidation but not always.

If a business owes you money and they have been dissolved, there may still be options to take action. Two options that are available are to have the administrative restoration of a company. The other is to obtain a ‘court order’.

If you are owed money from a dissolved company, there is no guarantee it will be paid. Neither of the two aforementioned actions come with any direct guarantees. However, they are both valid options. In this article, we look at the intricacies involved.

It is important to note that collecting a debt from a dissolved company can be a complex and time sapping challenge.

Administrative restoration of a Company

It is possible to have a dissolved company restored without a court order if you were a named director or shareholder at the time it was dissolved.

To apply for a administrative restoration, you must contact Companies House. This is effect means to undo the closing down process.

A person can do this providing the following conditions are applicable:

• The company was struck off the register under section 1000 or 1001 (‘Registrar’s power to strike off defunct company’) of the Companies Act 2006; for example, the company failed to deliver confirmation statements or accounts to Companies House.
• There is an existing application for administrative restoration is being made.
• The company was struck off the register and dissolved by Companies House within the last 6 years.
• The company was trading at the time it was dissolved/struck off.

The way to apply for an administrative restoration depends on what type of company it was/is. The option to restore a Limited Company is different than a Limited Liability Partnership (LLP).

To restore a Limited Company, a RT01 form needs to be completed. This is called an Application for administrative restoration to the register.

For restoring a LLP, the form LL RT01 needs to be completed. This form is titled, Apply for restoration of a Limited liability partnership.

A fee of £100 will need to be paid to Companies house. This is the fee they charge for the administration process of restoring the company. They will also expect any unfiled accounts or confirmation statement to be given also.

Court order for the Restoration of a company

You can apply for a court order to have the company restored if any of the following are true:

• you did business with the company
• you worked for the company
• the company owed you money when they were dissolved
• you’re responsible for the company’s employee pension fund
• you and the company have a shared or competing interest in land
• you were a shareholder or director of the company when it was dissolved

Restoring a company via a court order this way comes with more complexities than administrative restoration. It is always advisable to seek specialist legal advice before exercising this option.

This is not a service Federal Management offers as it requires a Legal expert with specialist knowledge of this particular area.

Strong Words of advice

Is is highly suggested you get specialist legal advice before attempting any of the above. If a company has been dissolved without your knowledge, there maybe something you can do. It is very different than having a customer go into liquidation.

Irrespective of what has gone on previously, expert advice from a Commercial Solicitor should be able to provide you with more relevant answers. If you have a personal guarantee from the director, then you are entitled to pursue them regardless.

Collecting a debt from a dissolved company is by no means an easy task. The chances of recovery of very slim but every case is dependent on the varying circumstances. If you need help with collecting a debt from a dissolved company, contact us today for advice and a frank appraisal of your problem.

Common FAQS about Collecting a Debt from a dissolved company in the UK

What is a dissolved company?

A dissolved company is one that has been closed down by the registrar of companies, either because it did not meet its filing obligations, or because it voluntarily wound up and gave notice to the registrar.

Once a company has been dissolved, all assets of the company are held in trust for the Crown until any liabilities of the company have been settled.

Are there lots of dissolved companies in the UK?

Yes, there are a lot of dissolved companies in the UK. The UK Government publishes monthly figures which show that the number of dissolved companies is rising each year.

Can I still collect debt from a dissolved company?

Yes, in certain situations you can still collect debt from a dissolved company in the UK. However, it is important to note that the process of collecting  debt from a dissolved company can be more time consuming and difficult than with an active company.

Is a company in liquidation the same as a company that has been dissolved?

No, a company in liquidation is different from a company that has been dissolved. A company in liquidation is still an active legal entity and can therefore continue to trade or enter into contracts with creditors.

However, when a company is dissolved it no longer exists as a legal entity and any assets of the company will have been distributed based on the wishes of the shareholders.