One Strike – “You’re Out!”

15 Jun 2022
If you are intending to strike off a company - stop and consider things carefully before you do. Think about whether the company has assets you may want to transfer out? If you don’t, you risk losing them.

In situations where a decision has been made to strike a company off the register, most likely by voluntary strike off, there is often little or no attention paid to whether the company has assets worth saving. Often that’s the result of disappointment, in many cases because the company has failed, or sometimes disinterest because the company is not part of future plans. No matter what the reason, if no steps are taken to transfer assets out of the company prior to strike off, they will become the property of the Crown (known as ‘bona vacantia’).

We have had many examples of this happening, only for those involved in the dissolved company to later regret not taking action to secure assets of value. Examples include a software development company which failed to assign rights in software out of the company prior to strike off, preventing those involved in the company from continuing the development of that software after the failure of their first enterprise. Trade marks are also often affected by this failure, as it’s so easy to forget that the company has registered its trade marks – preventing the onward use and dealing in the trade marks, or even their potential sale.

It’s true that there are some situations in which the company can be reinstated for certain purposes but there’s no certainty to that and it’s also a slow and costly process to go through, if it’s available at all.

The solution is pretty simple – (i) identify if the company has any useful assets, (ii) if it has, transfer them out prior to strike off. It’s easy and inexpensive. That way, you preserve assets of value and keep options open down the line, when those assets may come into their own and be of benefit in sometimes unforeseen ways.