Bona Vacantia – Guidelines
The Bona Vacantia Division
The Bona Vacantia Division deals with the property and rights which were beneficially owned by dissolved companies. When a company is dissolved, its assets pass to the Crown under Section 654 of the Companies Act 1985.
The Companies Group can deal with any assets that were held by a company at the date of dissolution, but most of their work is centred on cash balances, freehold and leasehold property, trademarks, copyright, internet domain names and mortgages.
It should be pointed out that the Treasury Solicitor is not responsible for the company’s debts or any other liabilities the company may have had under Section 656 of the Companies Act 1985, the Treasury Solicitor has the power to disclaim assets that are vested in the Crown.
A dissolved Company refers to a company that was previously registered to Companies House but has been struck off the Companies Registry or wound up by a liquidator. The assets of the company become property of the Crown and the company can no longer trade or own any assets.
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.
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 any assets owned by 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 assets were held by the company upon trust for another person, those assets do not pass to the Crown as bona vacantia.
In the case of land with a registered title, this can be proved by producing office copy entries of the title (obtainable from the relevant District Land Registry), showing the company as the registered proprietor. In the case of land with an unregistered title, it is necessary to trace all of the original title deed, culminating with the conveyance to the dissolved company (for freeholds) or the original lease, and all subsequent deeds of assignment and other assurances, culminating in an assignment to the dissolved company (for leaseholds).
Where there is a Standard Security over a dissolved company asset, the creditor can issue a Calling Up notice which allows the creditor to recover the amount of his loan from sale of the property.
If the company has not traded since the 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.
1. 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, and
- who makes the disclaimer
3. If a liquidator or trustee in bankruptcy disclaims leasehold property, the lease vests in the Crown as bona vacantia.
4. 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.
5. In the case of freehold property the effect of any disclaimer is that the freehold title is extinguished.
Please complete our company restoration form to inquire about restoring your company.