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Discretionary Payments

These notes only apply in the situation where the company was not put into liquidation, and if the company can be restored to the Register of Companies. There are separate guidelines for discretionary payments where the company was formerly in liquidation and for the situation where the company cannot be restored.

Where a company can still be restored, restoration to the Register is the appropriate remedy to enable its property and rights to be dealt with, and restoration is the only remedy possible if you wish to continue trading, because it is illegal to trade in the company's name after dissolution.

If the company has not traded since dissolution, it has been recognised that restoration is not always an economic proposition. The Treasury Solicitor has therefore been given discretion by the Treasury to deal with cash balances by way of discretionary payment to former shareholders. Only one payment will be made in respect of a dissolved company.

The maximum payment is £3,000. Payments will only be made in respect of cash balances. If the applicants wish to regain ownership of other property or rights they will have to apply for restoration of the company. No payment will be made out of the proceeds of sale after the Treasury Solicitor has sold an asset.

If a payment is made, the Treasury Solicitor's proper legal costs and disbursements will be deducted from the payment. The Treasury Solicitor's minimum costs are currently £150 although a higher figure may be deducted if the amount of work on a file makes this appropriate. No VAT is charged on these costs. Disbursements are an additional deduction and are made at cost.

Payments will only be made to shareholders who were shown as being members of the company at the date of dissolution in the “Register of Members” filed at Companies House. Former Directors of the company are not eligible for a payment unless they were also shareholders

If you wish to apply for a discretionary payment please supply the following:

A Statutory Declaration signed by all the former shareholders. The Statutory Declaration must include all the following statements (where appropriate).

  • that the applicants were the only shareholders of the company at the time of its dissolution
  • that at the date of dissolution there were no outstanding creditors of the company

or

  • that all such creditors have since been paid in full
  • that the applicants will not apply for the company to be restored to the Register
  • that the applicants will return on demand any payments made in the event that a creditor comes forward
  • that the applicants acknowledge that the Treasury Solicitor's proper legal costs plus disbursements and a five percent reservation (where the balance is over £750) will be deducted from any payment
  • who the payable order should be made payable to
  • that (if appropriate) the company was not registered for Value Added Tax

Please note that the declaration must be witnessed by a practicing Solicitor and the full name and address of the solicitors practice must be typed in the Statutory Declaration.

In addition to the Statutory Declaration you will be required to provide:

  • A letter from the Inland Revenue confirming that at the date of dissolution the company did not owe any sums in respect of corporation tax or National Insurance contributions
  • A letter from HM Customs & Excise confirming that at the date of dissolution the company did not owe any sums in respect of VAT (if appropriate)
  • Copies of the current passports or current UK driving licences of all the registered shareholders, certified as true copies by a solicitor
  • An original bill or bank statement (not more than three months old) addressed to each of the registered shareholders at his or her home address
  • If the Treasury Solicitor has not yet collected the account balance then please provide the account number, sort code and branch address, of the dissolved company's bank account.

If the company is restored to the Register the Treasury Solicitor must account to the company for money passing through his hands, notwithstanding that he has paid it away, hence the need for the undertaking not to apply for restoration of the company.

If an application for a payment is accepted whilst the company can still be restored to the Register, there is a risk the Treasury Solicitor might be called to account to the company on a subsequent restoration by a creditor of the company. For this reason the Treasury require the Treasury Solicitor to take a reservation of 5% of the value (after deducting costs) as an "insurance premium", which is not repayable.

Once the Statutory Declaration has been provided, consideration will be given to the making of a payment on the above terms and conditions.

It is stressed that these payments are entirely discretionary. If the Treasury Solicitor is not satisfied on any of the above aspects, then a payment will not be considered. These guidelines are for information only and each case will be decided on its own merits.

The Treasury Solicitor has been given a discretion by the Treasury to deal with bona vacantia assets by way of discretionary payments. Only one payment will be made in respect of a dissolved company.

The Treasury Solicitor will consider applications for payments in the following order of priority:

  • former liquidators
  • former shareholders, whether or not they have received back in full the amount of capital subscribed, provided that the company was solvent at the date of dissolution.

If the company was formerly in liquidation, any payment will only be made to the former liquidator, to distribute as if he were still the liquidator.

Payments will only be made in respect of cash balances. If the applicants wish to regain ownership of other property or rights they must be purchased for their open market value, and the applicants will have to compete with any other interested parties. No payments will be made out of the proceeds of sale of an asset that has been sold by the Treasury Solicitor.

In the case of an application:

  • by former shareholders the Treasury Solicitor requires a Statutory Declaration from them signed by all of the former shareholders. The Statutory Declaration must include all the following statements (where appropriate):-
  • that the applicants were the only shareholders of the company at the time of its dissolution
  • that at the date of dissolution there were no outstanding creditors of the company

or

  • that all such creditors have since been paid in full
  • that the applicants will return on demand any payment made in the event that creditors come forward
  • who the payable order should be made payable to
  • that the applicants acknowledge that the Treasury Solicitor's proper legal costs plus disbursements will be deducted from any payment
  • that (if appropriate) the company was not registered for Value Added Tax

In addition to the Statutory Declaration you will be required to provide:

  • A letter from the Inland Revenue confirming that at the date of dissolution the company did not owe any sums in respect of corporation tax or National Insurance contributions
  • A letter from HM Customs & Excise confirming that at the date of dissolution the company did not owe any sums in respect of VAT (if appropriate)
  • Copies of the current passports or current UK driving licences of all the registered shareholders, certified as true copies by a solicitor
  • An original bill or bank statement (not more than three months old) addressed to each of the registered shareholders at his or her home address
  • payments will only be made to shareholders who were registered as members of the company at the date of dissolution in the "Register of Members" filed at Companies House. Former Directors of the company are not eligible for a payment unless they were also shareholders.
  • by a former liquidator the Treasury Solicitor requires a Statutory Declaration signed by the former liquidator in the presence of a practicing solicitor;
  • that he was the liquidator of the company at the date of dissolution
  • that any payment will be distributed as if he were still the liquidator of the company
  • that the applicants acknowledge that the Treasury Solicitor's proper legal costs plus disbursements will be deducted from any payment
  • who the payable order should be made payable to

In the case of an application by either a former shareholder or a former liquidator, the Statutory Declaration in support of the application must be witnessed by a practicing solicitor, and the full name and address of the solicitor's practice must be typed in the Statutory Declaration.

Once the Statutory Declaration has been provided consideration will be given to the making of a discretionary payment on the above terms and conditions.

If the Treasury Solicitor has not yet collected the account balance then please provide the account number, sort code and branch address, of the dissolved company's bank account.

If a payment is made, the Treasury Solicitor’s proper legal costs and disbursements will be deducted from the payment. The Treasury Solicitor's minimum costs are currently £150 although a higher figure may be deducted if the amount of work on a file makes this appropriate. No VAT is charged on these costs. Disbursements are an additional deduction and are made at cost.

In the case of payments exceeding £50,000 the specific consent of the Treasury is required before any payment can be made. In those cases it is also possible that the Treasury may require a proportion of the fund to be retained as the "Crown's Share" (as it is called). In certain circumstances the Treasury may agree to waive the Crown's Share.

It is stressed that these payments are entirely discretionary. If the Treasury Solicitor is not satisfied on any of the above aspects, then a payment will not be considered. These Guidelines are for information only and each case will be decided on its own merits.

Please complete our company restoration form to enquire about restoring your company.