There are situations in which companies that have been struck off the official register of companies still have assets. In situations like this, company owners are interested in getting those assets before the company is completely removed from the register. This is where company restoration comes into play.
If you want to recover any blocked assets in cases like the ones mentioned above, you will have to restore your company to the official Register of Companies and submit an application to the Crown’s representative. By restoring your company you can save those assets or even continue trading if you want to.
There are actually two different types of restoration available to company owners. First of all, there is administrative restoration.
If you want to submit an application for administrative restoration your company must meet certain requirements. For starters, it has to be officially struck off by the Registrar of Companies because it was wound up and the liquidator couldn’t act or it failed to file annual return/accounts. Furthermore, the company must be dissolved in less than six years before you’ve submitted the application. Finally, you must take care of all the paperwork and file paid penalties too.
The other type of application for company restoration is Court Application to Restore. This restoration requires two things. The company must meet the criteria of the first requirement related to administrative restoration or it was dissolved after a winding up or if the directors have filed a voluntary application to dissolve it. Once again, there is a timeframe that you have to respect – you can submit the application for company restoration in less than six years after the official dissolution.
In order to determine which type of company restoration your company needs, you have to pay closer attention to the reasons behind the dissolution and the reason why you want to restore the company.
Company demergers are a seemingly similar procedure, but they have their own characteristics. Generally speaking, a company demerger represents a separation of various business activities that were conducted by a single company or business group into independent companies or business groups. Of course, the ownership of these newly-formed companies/groups remains the same. In other words, the same shareholders will still own these companies.
It turns out that there is more than one good reason why companies are choosing demergers. First of all, in cases of disputes, it’s better for shareholders to separate the business activities. In other cases, only specific sections of a company or group are providing profit while others are experiencing losses. In this way, you can separate the successful ones. Company demergers are often used as a tool for unleashing the complete value of primary businesses. Many people use them for dividing a group with joint ownership. In the end, company demergers are used when the owners can’t sell the entire business or when they want to separate different business activities depending on the industry.
Just like in the case of company restorations, there are few different kinds of company demergers too. To be more precise, these are different methods related to the demerger structuring.
First and foremost, there is direct dividend where the parent company announces a dividend in specie of all the shares of their subsidiaries to be demerged. This will transfer the parent company ownership to the shareholders. Furthermore, there is an indirect dividend where the formation of a new company is involved. The other types of demergers include indirect/three-cornered reduction of capital, a scheme of arrangement and a liquidation scheme. You should choose the demerger that suits your company’s needs.
Using professional help for company restorations and demergers
In order to finish these processes quickly and without any problems, it is the best idea to use professional help. Experienced solicitors and other experts from our company can help you with every type of restoration and demerger. We have years of experience in this field and we are familiar with all the laws and regulations related to these activities. Our company can help both small and big companies overcome any problem related to this process. With our help, you can restore or demerge any UK-based company.