Quantifying Retrospective Statutory Personal Claims Following Court Restoration
Court restoration reactivates statutory personal claims against directors retroactively, requiring quantified escrow holdbacks and structured run-off indemnity caps.
Striking Off
Meaning
Administrative process by which the registrar of companies removes an entity from the official register and dissolves it. Striking off is often a low-cost alternative to formal liquidation for companies that have no assets and no liabilities. This can be initiated by the company itself or by the registrar if they have reason to believe the company is no longer carrying on business.
Voluntary Application
Directors choose to close down a redundant business entity by submitting a specific form and paying a small fee. Before proceeding with striking off, the company must have ceased trading for at least three months. They must also notify all interested parties, including creditors, employees, owners and shareholders, of the intention to dissolve.
This transparency prevents the use of the process to secretly dispose of a company with outstanding debts. A formal declaration ensures that no current or contingent liabilities remain unpaid at the time of the closure.
Compulsory Action
State intervention occurs when a company fails to file its accounts or annual returns, leading the registrar to assume it is defunct. The registrar will publish notices in the Gazette to warn the public of the impending striking off. If no objection is received, the entity is dissolved and any remaining property vests in the crown.
This serves as a clean-up mechanism for the public register to ensure it only contains active businesses.
Legal Consequence
Procedural finality involves the immediate cessation of the company’s power to enter into contracts or hold property. Any assets remaining at the point of striking off are considered bona vacantia and belong to the state. The act of removal from the register is the final step in the life cycle of the corporate body.