Company Law Reform Bill [HL] (470-475)

House of Commons

Session 2005 - 06
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Company Law Reform Bill [HL] (470-475)

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 2 — Property of dissolved company
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(b)
on summary conviction, to a fine not exceeding the statutory
maximum.
976
Withdrawal of application
An application under section 969 is withdrawn by notice to the registrar.
977
Meaning of “creditor”
5
In this Chapter “creditor” includes a contingent or prospective creditor.
Chapter 2
Property of dissolved company
Property vesting as bona vacantia
978
Property of dissolved company to be bona vacantia
10
(1)
When a company is dissolved, all property and rights whatsoever vested in or
held on trust for the company immediately before its dissolution (including
leasehold property, but not including property held by the company on trust
for another person) are deemed to be bona vacantia and—
(a)
accordingly belong to the Crown, or to the Duchy of Lancaster or to the
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Duke of Cornwall for the time being (as the case may be), and
(b)
vest and may be dealt with in the same manner as other bona vacantia
accruing to the Crown, to the Duchy of Lancaster or to the Duke of
Cornwall.
(2)
Subsection (1) has effect subject to the possible restoration of the company to
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the register under Chapter 3 of this Part (see section 1000).
979
Crown disclaimer of property vesting as bona vacantia
(1)
Where property vests in the Crown under section 978, the Crown’s title to it
under that section may be disclaimed by a notice signed by the Crown
representative, that is to say the Treasury Solicitor, or, in relation to property
25
in Scotland, the Queen’s and Lord Treasurer’s Remembrancer.
(2)
The right to execute a notice of disclaimer under this section may be waived by
or on behalf of the Crown either expressly or by taking possession or other act
evincing that intention.
(3)
A notice of disclaimer must be executed within three years after—
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(a)
the date on which the fact that the property may have vested in the
Crown under section 978 first comes to the notice of the Crown
representative, or
(b)
if ownership of the property is not established at that date, the end of
the period reasonably necessary for the Crown representative to
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establish the ownership of the property.
(4)
If an application in writing is made to the Crown representative by a person
interested in the property requiring him to decide whether he will or will not
disclaim, any notice of disclaimer must be executed within twelve months after

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 2 — Property of dissolved company
471

the making of the application or such further period as may be allowed by the
court.
(5)
A notice of disclaimer under this section is of no effect if it is shown to have
been executed after the end of the period specified by subsection (3) or (4).
(6)
A notice of disclaimer under this section must be delivered to the registrar and
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retained and registered by him.
(7)
Copies of it must be published in the Gazette and sent to any persons who have
given the Crown representative notice that they claim to be interested in the
property.
(8)
This section applies to property vested in the Duchy of Lancaster or the Duke
10
of Cornwall under section 978 as if for references to the Crown and the Crown
representative there were respectively substituted references to the Duchy of
Lancaster and to the Solicitor to that Duchy, or to the Duke of Cornwall and to
the Solicitor to the Duchy of Cornwall, as the case may be
980
Effect of Crown disclaimer
15
(1)
Where notice of disclaimer is executed under section 979 as respects any
property, that property is deemed not to have vested in the Crown under
section 978.
(2)
The following sections contain provisions as to the effect of the Crown
disclaimer—
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sections 981 to 985 apply in relation to property in England and Wales or
Northern Ireland;
sections 986 to 988 apply in relation to property in Scotland.
Effect of Crown disclaimer: England and Wales and Northern Ireland
981
General effect of disclaimer
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(1)
The Crown’s disclaimer operates so as to determine, as from the date of the
disclaimer, the rights, interests and liabilities of the company in or in respect of
the property disclaimed.
(2)
It does not, except so far as is necessary for the purpose of releasing the
company from any liability, affect the rights or liabilities of any other person.
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982
Disclaimer of leaseholds
(1)
The disclaimer of any property of a leasehold character does not take effect
unless a copy of the disclaimer has been served (so far as the Crown
representative is aware of their addresses) on every person claiming under the
company as underlessee or mortgagee, and either—
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(a)
no application under section 983 below is made with respect to that
property before the end of the period of 14 days beginning with the day
on which the last notice under this paragraph was served, or
(b)
where such an application has been made, the court directs that the
disclaimer shall take effect.
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(2)
Where the court gives a direction under subsection (1)(b) it may also, instead
of or in addition to any order it makes under section 984, make such order as it

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 2 — Property of dissolved company
472

thinks fit with respect to fixtures, tenant’s improvements and other matters
arising out of the lease.
(3)
In this section the “Crown representative” means—
(a)
in relation to property vested in the Duchy of Lancaster, the Solicitor to
that Duchy;
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(b)
in relation to property vested in the Duke of Cornwall, the Solicitor to
the Duchy of Cornwall;
(c)
in relation to property in Scotland, the Queen’s and Lord Treasurer’s
Remembrancer;
(d)
in relation to other property, the Treasury Solicitor.
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983
Power of court to make vesting order
(1)
The court may on application by a person who—
(a)
claims an interest in the disclaimed property, or
(b)
is under a liability in respect of the disclaimed property that is not
discharged by the disclaimer,
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make an order under this section in respect of the property.
(2)
An order under this section is an order for the vesting of the disclaimed
property in, or its delivery to—
(a)
a person entitled to it (or a trustee for such a person), or
(b)
a person subject to such a liability as is mentioned in subsection (1)(b)
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(or a trustee for such a person).
(3)
An order under subsection (2)(b) may only be made where it appears to the
court that it would be just to do so for the purpose of compensating the person
subject to the liability in respect of the disclaimer.
(4)
An order under this section may be made on such terms as the court thinks fit.
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(5)
On a vesting order being made under this section, the property comprised in it
vests in the person named in that behalf in the order without conveyance,
assignment or transfer.
984
Protection of persons holding under a lease
(1)
The court must not make an order under section 983 vesting property of a
30
leasehold nature in a person claiming under the company as underlessee or
mortgagee except on terms making that person—
(a)
subject to the same liabilities and obligations as those to which the
company was subject under the lease, or
(b)
if the court thinks fit, subject to the same liabilities and obligations as if
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the lease had been assigned to him.
(2)
Where the order relates to only part of the property comprised in the lease,
subsection (1) applies as if the lease had comprised only the property
comprised in the vesting order.
(3)
A person claiming under the company as underlessee or mortgagee who
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declines to accept a vesting order on such terms is excluded from all interest in
the property.
(4)
If there is no person claiming under the company who is willing to accept an
order on such terms, the court has power to vest the company’s estate and

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 2 — Property of dissolved company
473

interest in the property in any person who is liable (whether personally or in a
representative character, and whether alone or jointly with the company) to
perform the lessee’s covenants in the lease.
(5)
The court may vest that estate and interest in such a person freed and
discharged from all estates, incumbrances and interests created by the
5
company.
985
Land subject to rentcharge
Where in consequence of the disclaimer land vests in any person, neither he
nor his successors in title are subject to any personal liability in respect of sums
becoming due under the rentcharge, except sums becoming due after he, or
10
some person claiming under or through him, has taken possession or control
of the land or has entered into occupation of it.
Effect of Crown disclaimer: Scotland
986
General effect of disclaimer
(1)
The Crown’s disclaimer operates to determine, as from the date of the
15
disclaimer, the rights, interests and liabilities of the company, and the property
of the company, in or in respect of the property disclaimed.
(2)
It does not (except so far as is necessary for the purpose of releasing the
company and its property from liability) affect the rights or liabilities of any
other person.
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987
Power of court to make vesting order
(1)
The court may—
(a)
on application by a person who either claims an interest in disclaimed
property or is under a liability not discharged by this Act in respect of
disclaimed property, and
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(b)
on hearing such persons as it thinks fit,

make an order for the vesting of the property in or its delivery to any persons
entitled to it, or to whom it may seem just that the property should be delivered
by way of compensation for such liability, or a trustee for him.
(2)
The order may be made on such terms as the court thinks fit.
30
(3)
On a vesting order being made under this section, the property comprised in it
vests accordingly in the person named in that behalf in the order, without
conveyance or assignation for that purpose.
988
Protection of persons holding under a lease
(1)
Where the property disclaimed is held under a lease in favour of a person
35
claiming under the company, whether—
(a)
as sub-lessee, or
(b)
as creditor in a duly registered or (as the case may be) recorded
heritable security over a lease,

the court must not make a vesting order except on the following terms.
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(2)
The person must by the order be made subject—

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 3 — Restoration to the register
474

(a)
to the same liabilities and obligations as those to which the company
was subject under the lease in respect of the property, or
(b)
if the court thinks fit, to the same liabilities and obligations as if the
lease had been assigned to him.

In either event (if the case so requires) the liabilities and obligations must be as
5
if the lease had comprised only the property comprised in the vesting order.
(3)
A sub-lessee or creditor declining to accept a vesting order on such terms is
excluded from all interest in and security over the property.
(4)
If there is no person claiming under the company who is willing to accept an
order on such terms, the court has power to vest the company’s estate and
10
interest in the property in any person liable (either personally or in a
representative character, and either alone or jointly with the company) to
perform the lessee’s obligations under the lease.
(5)
The court may vest that estate and interest in such a person freed and
discharged from all interests, rights and obligations created by the company in
15
the lease or in relation to the lease.
(6)
For the purposes of this section a heritable security—
(a)
is duly recorded if it is recorded in the Register of Sasines, and
(b)
is duly registered if registered in accordance with the Land Registration
(Scotland) Act 1979 (c. 33).
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Supplementary provisions
989
Liability for rentcharge on company’s land after dissolution
(1)
This section applies where on the dissolution of a company land in England
and Wales or Northern Ireland that is subject to a rentcharge vests by operation
of law in the Crown or any other person (“the proprietor”).
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(2)
Neither the proprietor nor his successors in title are subject to any personal
liability in respect of sums becoming due under the rentcharge, except sums
becoming due after the proprietor, or some person claiming under or through
him, has taken possession or control of the land or has entered into occupation
of it.
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(3)
In this section “company” includes any body corporate.
Chapter 3
Restoration to the register
Administrative restoration to the register
990
Application for administrative restoration to the register
35
(1)
An application may be made to the registrar to restore to the register a
company that has been struck off the register under section 966 or 967 (power
of registrar to strike off defunct company).
(2)
An application under this section may be made whether or not the company
has in consequence been dissolved.
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Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 3 — Restoration to the register
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(3)
An application under this section may only be made by a former director or
former member of the company.
(4)
An application under this section may not be made after the end of the period
of six years from the date of the dissolution of the company.

For this purpose an application is made when it is received by the registrar.
5
991
Requirements for administrative restoration
(1)
On an application under section 990 the registrar shall restore the company to
the register if, and only if, the following conditions are met.
(2)
The first condition is that the company was carrying on business or in
operation at the time of its striking off.
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(3)
The second condition is that, if any property or right previously vested in or
held on trust for the company has vested as bona vacantia, the Crown
representative has signified to the registrar in writing consent to the
company’s restoration to the register.
(4)
It is the applicant’s responsibility to obtain that consent and to pay any costs
15
(in Scotland, expenses) of the Crown representative—
(a)
in dealing with the property during the period of dissolution, or
(b)
in connection with the proceedings on the application,

that may be demanded as a condition of giving consent.
(5)
The third condition is that the applicant has—
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(a)
delivered to the registrar such documents relating to the company as
are necessary to bring up to date the records kept by the registrar, and
(b)
paid any penalties under section 461 or corresponding earlier
provisions (civil penalty for failure to deliver accounts) that were
outstanding at the date of dissolution or striking off.
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(6)
In this section the “Crown representative” means—
(a)
in relation to property vested in the Duchy of Lancaster, the Solicitor to
that Duchy;
(b)
in relation to property vested in the Duke of Cornwall, the Solicitor to
the Duchy of Cornwall;
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(c)
in relation to property in Scotland, the Queen’s and Lord Treasurer’s
Remembrancer;
(d)
in relation to other property, the Treasury Solicitor.
992
Application to be accompanied by statement of compliance
(1)
An application under section 990 (application for administrative restoration to
35
the register) must be accompanied by a statement of compliance.
(2)
The statement of compliance required is a statement—
(a)
that the person making the application has standing to apply (see
subsection (3) of that section), and
(b)
that the requirements for administrative restoration (see section 991)
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are met.
(3)
The registrar may accept the statement of compliance as sufficient evidence of
those matters.