Dissolved Company Assets
Bona vacantia is property which was owned by a registered company which has been dissolved. In this situation, the property is transferred to the Crown as bona vacantia. In order to establish that the property in question is bona vacantia, it must be shown in accordance with normal practice and procedure that the property was owned by the company at the time it was dissolved. These Guidelines only apply to property of companies registered under the Companies Acts 1929 to 1985.
Companies are usually formed by a number of individuals who wish collectively to form a business association. Once incorporated, a company is in law regarded as being an artificial legal 'person' with rights and obligations distinct and separate from those of the persons who formed the company. The majority of such companies are now created and formed under the Companies Act 1985, or under earlier legislation now superseded by that Act. During the period of its existence, a company can own in its own name any property, money, or other assets which a person can own. Unlike a person, a company cannot die, but its existence can be terminated by its name being struck off the Companies' Register or by being wound up by a liquidator. When a company ceases to exist in this way, it is usually referred to as having been 'dissolved'.
Dissolved Companies' Assets
Before a company is dissolved, the members should ensure that any assets owned by the company are transferred out of the company's name. If this is not properly attended to, any assets which were owned by the company at the date of dissolution will then pass into the ownership of the Crown. Such assets are then known as 'bona vacantia', which is a Latin expression meaning 'ownerless goods'.
It is only assets which pass to the Crown as bona vacantia. When a company is dissolved, any liabilities which the company had are extinguished. If therefore the company owed money to a creditor, that debt is extinguished by the dissolution of the company. The only remedy that the creditor has is to restore the company to the Register, and then bring legal proceedings against the restored company, to enforce the debt against the company.
Property held on Trust
It is only assets that were beneficially owned by a company at the time it was dissolved which pass to the Crown as bona vacantia. If the company upon trust held assets for another person, those assets do not pass to the Crown as bona vacantia. If you believe that a company was holding assets upon trust for you, you should take your own independent legal advice on the matter.
The Government Office which is responsible for dealing with the assets of dissolved companies depends upon where the last registered office of the company was situated, and where the asset is situated.
If the company's last registered office was situated in Scotland its assets are dealt with by the Queen's and Lord Treasurer's Remembrancer, of 25 Chambers Street, Edinburgh EH1 1LA.
If the company's last registered office was in Northern Ireland its assets are dealt with by the Crown Solicitor of PO Box 410, Royal Courts of Justice, Belfast.
If the company's last registered office was in the Republic of Ireland its assets are dealt with by The Chief State Solicitor, Osmond House, Little Ship Street, Dublin 8.
If the company's last registered office was in England or Wales (other than in the Duchies of Cornwall or Lancashire) its assets are dealt with by the Treasury Solicitor. The Duchy of Cornwall comprises the County of Cornwall. The Duchy of Lancaster comprises the Counties of Lancashire, Merseyside and parts of Greater Manchester, Cheshire and Cumbria.
If the last registered office of the dissolved company was in the Duchies of Cornwall or Lancashire) its assets fall to be dealt with by Messrs Farrer & Co, Solicitors, of 66 Lincolns Inn Fields, London WC2A 3LH.
The jurisdiction of the Treasury Solicitor is territorial. If the asset in question is situated outside England or Wales the Treasury Solicitor has no jurisdiction to deal with the asset.
If a Bank account is held in the name of a dissolved company, and the company is still trading, the members should restore the company to the Register if that is possible. If the company is not trading, it has been recognised that restoration is not always an economic proposition. The Treasury Solicitor has therefore been given a limited discretion to make payments to former members and liquidators of the dissolved company out of any money held in the company's Bank account.
Flat Management Companies
If the dissolved company was your landlord, it probably owned either the freehold or the master lease for the building. If the company is dissolved you could find that you cannot sell your flat. In that situation the usual practice of the Treasury Solicitor is to offer to sell the freehold or the master lease to the tenants jointly, or to a new management company set up by them for that purpose upon which they are represented. In the case of leases with a period of at least 60 years to run, the price is ten times the total of the annual ground rents, subject to a minimum of £500 plus costs.
The Treasury Solicitor, liquidators and trustees in bankruptcy all have a statutory power of disclaimer.The provisions relating to disclaimers by the Treasury Solicitor, liquidators, and trustee's in bankruptcy are complex, and depend on:
- Whether the interest disclaimed is freehold or leasehold.
- Where the land is situated.
- Where the last registered office of the company was situated.
- Who makes the disclaimer.
If a liquidator or trustee in bankruptcy disclaims leasehold property, the lease vests in the Crown as bona vacantia. If the company's last registered office was in England or Wales (excluding the Duchies) it is dealt with by the Treasury Solicitor. If the last registered office was in the Duchies, it is dealt with by Messrs Farrer & Co.
If the Treasury Solicitor disclaims leasehold property, the lease comes to an end, but without prejudice to any antecedent liability a former tenant or surety may owe to the landlord for previous breaches of covenant.
In the case of freehold property the effect of any disclaimer is that the freehold title is extinguished. In the case of property situated in the Duchies, it is then dealt with by Messrs Farrer & Co. If it is situated elsewhere in England or Wales it is dealt with by the Crown Estate. Any enquiries then need to be addressed to The Solicitor, The Crown Estate, 16 Carlton House Terrace, London SW1Y 5AH.
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