Restoring a Ltd company which had been struck off

Restoring a Ltd company which had been struck off

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We have recently been approached by a Ltd company client. The company was dissolved in August 2014 by companies house as the company accounts were not filed for the year ending 30.04.13.

The client wants to restore the company as he had not claimed the CIS refunds and is still trading through the company. My query is if we restore the company, will companies house reissue the late filing penalties for the years 30.04.13 and 30.04.14? Will HMRC also issue late filing penalties?

We have had a few clients where we were able to restore the company without companies house or HMRC issuing late filing penalties. However, this was many years ago and I am not sure if the position has changed now.

Thank you in advance for your help

Replies (9)

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By johngroganjga
02nd Sep 2015 12:10

Are you sure he is still trading through the company?  If so, that must be without having a bank account in the company's name presumably?

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Replying to Anonymous.:
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By Maslins
02nd Sep 2015 12:43

Not always

johngroganjga wrote:

Are you sure he is still trading through the company?  If so, that must be without having a bank account in the company's name presumably?

As an aside, John I've seen a case where a company was struck off but evidently their bank missed that fact, as the business carried on using the same bank account for over a year with the director not even being aware (I'm sure they got letters, but ignored/didn't open).  We ended up treating it as though the income was sole trader income, didn't really know what else to do (as of course couldn't file statutory accounts/CT return as company no longer existed).

To the OP, restoration isn't an easy process, and like you suggest it will "awaken" many penalties and possibly other nasties.  Proceed with caution.

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Replying to Tax Dragon:
By johngroganjga
02nd Sep 2015 12:52

Bank account

Maslins wrote:

As an aside, John I've seen a case where a company was struck off but evidently their bank missed that fact, as the business carried on using the same bank account for over a year with the director not even being aware (I'm sure they got letters, but ignored/didn't open).

Interesting. I must have led a sheltered life as I can't ever remember seeing a live company struck off by the Registrar. So my comment was based on my understanding of what is supposed to happen to such a company's bank account in theory. If it doesn't always happen in practice so be it.

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By King_Maker
02nd Sep 2015 12:09

It is likely that CH will issue late filing penalties.

Even if the cheaper option of Administrative Restoration is available and used, I suspect legal fees and costs will exceed £1000+.

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Glenn Martin
By Glenn Martin
02nd Sep 2015 12:48

I did one last year.

The fees were about £300 to do it but they were charged £750 & £1500 for penalties for the 2 years accounts needed to bring record up to date. The penalties had to be paid on a debit card before they would restore it.

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By Tim Vane
02nd Sep 2015 13:17

I'm not sure exactly how it works but I always thought there is some sort of notification that goes to banks to close any accounts. I had a similar case where the account was not closed, and this was an account that was originally opened as a sole trader account. When the sole trader incorporated the same account was switched to the limited company, but probably something did not get adjusted correctly so the link to CH was not setup. This account also paid interest net instead of gross, so internally was probably still classed by the bank as a sole-trader account, despite being in the name of the Limited Company. Good job the account didn't get closed as the client forgot to withdraw the remaining cash before strike off.

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By Mr_awol
02nd Sep 2015 13:31

If the company has ceased trading and is no longer required, but has assets (such as CIS refunds due) then it is possible to have it restored, the assets distributed, and then the company stuck off again.  This costs c£2k and most company formation agents can deal with it.  This includes the treasury solicitor's fee, which you have to pay.  No late filing penalties will be payable.

 

Ive done two - bot in cases where freehold property was allowed o remain in companies which were subsequently struck off.

 

If, on the other hand, you want to keep the company,a similar process is involved - cheaper, but with the requirement to file accounts and pay the late filing penalties.

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By jonnieboy
02nd Sep 2015 13:45

I have seen an instance where a bank (Natwest) either didn't receive or failed to act on a dissolution notice and, as a result, an errant director continued trading as the limited company through the original bank account for over two years... needless to say, there were tears eventually when Natwest suspended the account freezing the funds therein.

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By bernard michael
02nd Sep 2015 16:49

My understanding is that the company is restored to the position it was when it was struck off as at the date of the striking off. Therefore any and all penalties recommence at the original date up to the date of document filing. Also HMRC penalties will  kick in on the same basis

Is the client convinced the total exercise is cost effective

 

Picking up an earlier point. If the directors carried on the business after the dissolution they will be deemed to be trading in their own right and personally liable for any debts incurred 

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