Company Strike off

Bank Account frozen

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Hello

A careless client did not get the money out from his business account (£40K) before  DIY strike off application. 

He has come back to me asking how he can get his money. 

What do I need to do to get his £40k back?

Would this work https://www.gov.uk/restore-dissolved-company

Thanks

 

 

Replies (42)

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By Paul Crowley
19th Oct 2020 12:48

Why the rush to strike off?
The trading at time of strike off a bit of an issue.
Never come across this. Usually it is struck off for failure to file

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paddle steamer
By DJKL
19th Oct 2020 12:54

FirstTab wrote:

Hello

A careless client did not get the money out from his business account (£40K) before  DIY strike off application. 

 

Surely both careless and possibly an idiot if he had managed to get the £40k out before strike off (given it is over £25k). Maybe an ill wind that........

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Replying to DJKL:
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By NewACA
21st Oct 2020 11:35

I think you only need a liquidator if you want a capital distribution tax treatment of the funds of more than >£25k. Some tax payers may not be entitled to that, eg: they are going to be involved with a similar trade within two years, or entrepreneur's relief isn't available and the funds are solely within basic rate band dividend tax so its more tax efficient to take dividends or a variety of other reasons.

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By carnmores
19th Oct 2020 13:08

whats the problem restoring the company is straight forward?

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By ireallyshouldknowthisbut
19th Oct 2020 13:44

Just restore it, its really not a big deal.

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FT
By FirstTab
19th Oct 2020 14:19

Thank you for the helpful response.

I have found a few formation companies, who can help with company restoration. I will probably use them:

https://www.eformations.co.uk/company-restoration?gclid=Cj0KCQjw8rT8BRCb...

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Replying to FirstTab:
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By carnmores
19th Oct 2020 14:34

why not do it yourself. the only thing to have to wory about is whether you need a court order which is usually required when a request is made to restore after a request from the directors to strike off.

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Replying to carnmores:
Ivor Windybottom
By Ivor Windybottom
19th Oct 2020 14:57

carnmores wrote:

why not do it yourself. the only thing to have to wory about is whether you need a court order which is usually required when a request is made to restore after a request from the directors to strike off.

Surely better to leave it to solicitors or company agents than dabble in something you are not experienced to handle?
It's what you don't know that matters in this job!

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Replying to Ivor Windybottom:
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By Paul Crowley
19th Oct 2020 15:22

Concur
For £40,000, put risk on people who do this stuff every week

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Replying to Paul Crowley:
RLI
By lionofludesch
19th Oct 2020 16:29

Paul Crowley wrote:

Concur
For £40,000, put risk on people who do this stuff every week

Me too.

I know my limits.

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Replying to Ivor Windybottom:
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By carnmores
19th Oct 2020 21:15

Very few things are best left toa solicitor, they charge much more for learning on the job than accountants. Why are there so many levels of legal appeals because the system is flawed and promotes bias

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Replying to carnmores:
paddle steamer
By DJKL
20th Oct 2020 09:54

No, it is merely because private school fees are very expensive.

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Replying to DJKL:
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By carnmores
20th Oct 2020 12:14

thats a non sequitor

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By Sarah Z
19th Oct 2020 15:09

If they sent in a DS01 form, then they need to do a court restore - which is possible but can take a while

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Oaklea
By Chris.Mann
19th Oct 2020 15:20

"A careless client did not get the money out from his business account (£40K) before DIY strike off application".

Let that be a lesson to all those, out there, who think they know best! Professional advice, is usually the best advice.

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Replying to Chris.Mann:
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By Paul Crowley
19th Oct 2020 15:24

I get requests to cease company straight away quite regularly
Clients just do not understand

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Replying to Paul Crowley:
Oaklea
By Chris.Mann
19th Oct 2020 16:23
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Replying to Chris.Mann:
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By Paul Crowley
19th Oct 2020 17:35

"How a company asset becomes bona vacantia
Property, cash and any other assets owned by a company when it is dissolved automatically pass to the Crown. This is because the law says this happens. You can find the main provisions of this law in the Companies Act 2006.

Liabilities of a company do not pass to the Crown on dissolution: they are normally extinguished.

A company is dissolved in two ways. The Registrar of Companies can strike off a company for failure to comply with its legal obligations. Alternatively, a company can be dissolved after a formal liquidation by its members or creditors.

The Treasury Solicitor collects some bona vacantia assets for the Crown. The Bona Vacantia division (BVD) of the Government Legal Department is responsible for this function."

The two ways does not mention DS 01

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Replying to Paul Crowley:
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By Wanderer
19th Oct 2020 18:07

Paul Crowley wrote:

The two ways does not mention DS 01

That quote is just some dumbed down .gov.uk text from:-
https://www.gov.uk/government/publications/bona-vacantia-dissolved-compa...

Section 1003 specifically states:-

1003 Striking off on application by company
(5)On the publication of the notice in the Gazette the company is dissolved.

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Replying to Paul Crowley:
Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
20th Oct 2020 09:50

The third way is the Directors file the DS01 to voluntarily strike it off without first washing it through Liquidation.

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Replying to Insolvency Practitioner:
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By carnmores
20th Oct 2020 12:16

thats pretty much taken as read

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By Martin B
19th Oct 2020 17:49

Is the directors name Chris Grayling ?

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Replying to Martin B:
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By DavidProcter
21st Oct 2020 09:43

Obviously not if the dissolution was successful

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By petestar1969
21st Oct 2020 09:44

Restoring a company is relatively easy, I've done it a few times for clients. One had his company struck off for non-filed accounts with a £25k CIS debtor (at30%) in it.

The costly bit was all the late filing penalties he had to pay to Companies House when we field the missing accounts after the restoration.

He got his money though and was going to go after the idiot accountant who prepared but didn't file his accounts to recover the fines.

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Replying to petestar1969:
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By Paul Crowley
21st Oct 2020 13:35

Some firms work on a pay before file basis
I am considering that for the 5% that are recurrently late payers

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By johnjenkins
21st Oct 2020 10:08

Check with the bank to see if the money has already been sent to the Crown. If not ask the bank to hold off, as the company was inadvertently struck off and will be restored. Then no problem.
The reason why I say this is because we have had a couple of cases where the bank were very slow to re-act.

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By John R
21st Oct 2020 10:27

Presumably, once restored, the £40,000 will be distributed and a further DS01 will then be filed. Assuming the £40,000 represents the net assets rather than e.g. the repayment of a director's loan, as they are greater than £25,000, the distribution would then be taxed as a dividend. Is that what the shareholders want? If they want it to be a capital gain covered by business asset disposal relief, they will have to do a member's voluntary liquidation.

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Replying to John R:
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By ShayaG
21st Oct 2020 13:16

Possibly for a higher rate tax payer

Here in London I cannot find a liquidator willing to work for less than £5k. Add on ER on 37,500 @ 10% = £3,750 for total costs of £8,750. If you just tax it as a basic rate dividend, the cost is 7.5% x £40k = £3,000 and a lot less faff.

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Replying to ShayaG:
RLI
By lionofludesch
21st Oct 2020 13:32

ShayaG wrote:

Here in London I cannot find a liquidator willing to work for less than £5k.

One of the compensations of having to travel to Wembley is telling your mates about how you were ripped off by Southerners in pubs, restaurants, burger bars and when appointing liquidators.

Why don't you just appoint a liquidator from Ooop North ? Or anywhere outside the South East for that matter ? Why does the liquidator need to be within walking distance of your office ? It's like London hasn't heard of tInterweb. Or even Royal Mail.

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Replying to ShayaG:
Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
21st Oct 2020 14:04

Should not pay more than £1.5-£2k plus VAT and outlays for assets this small. That's what I would charge but I'm not in London!

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Replying to Insolvency Practitioner:
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By ShayaG
21st Oct 2020 14:47

Interesting... they tell me that the insurance they have to take out on each file alone costs £2k.

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Replying to Insolvency Practitioner:
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By ShayaG
21st Oct 2020 14:47

Interesting... they tell me that the insurance they have to take out on each file alone costs £2k.

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Replying to ShayaG:
Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
21st Oct 2020 15:02

For assets under £50k like this scenario my insurance bond is £57.50!

Thanks (1)
Replying to ShayaG:
RLI
By lionofludesch
21st Oct 2020 15:21

ShayaG wrote:

Interesting... they tell me that the insurance they have to take out on each file alone costs £2k.

Have you ever sought alternative quotations ?

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Replying to lionofludesch:
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By ShayaG
22nd Oct 2020 19:58

Only one. I will definitely spread my net wider!

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By ShayaG
21st Oct 2020 12:27

Applying for a court order is arguably a reserved legal service under Section 12 (1) (c) of Legal Services Act 2007.

12 Meaning of “reserved legal activity” and “legal activity”

(1)In this Act “reserved legal activity” means—
....
(c)reserved instrument activities;

However, if you have a careful read of this case

https://www.bailii.org/ew/cases/EWFC/HCJ/2020/2.html

You can see the judge was minded to be permissive.

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Replying to ShayaG:
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By carnmores
21st Oct 2020 13:52

Way over the top any shareholder or creditor will be applying in person online it will go through on the nod.

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By carnmores
21st Oct 2020 13:49

Its marvellous how this thread has wandered thru a myriad of interesting but dare i say irrelevant scenarios. It simply a matter of getting the company restored, all company and tax compliance will doubtless follow. It may have been better if the OP said the company rather than the individual wants his money back

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By David Gordon FCCA
21st Oct 2020 14:41

if you are in practice but do not know the procedures for this. Go buy one of the many excellent text books, with information from Co Hse.
You may do it yourself, but it is a lengthy detailed process.
You may get an Insolvency practitioner or lawyer to do it for you, but it will cost anything from £3,000 upwards.
Depending on the facts the company Court may refuse to reinstate the company.
In any event the court will not reinstate except and unless acceptable provision for all filing and taxes are brought up to date.
The court must have regard to objection from creditors over the limit, and it is not the company court's remit to assess whether the creditor's claim has any merit.

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By David Gordon FCCA
21st Oct 2020 14:46

When doing a DIY dissolution the proposer signs that the company has no known creditors.
if your person did sign the form in such circumstances, it is a criminal offense.

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Replying to David Gordon FCCA:
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By Paul Crowley
23rd Oct 2020 15:33

But co House REALLY not interested

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By David Gordon FCCA
23rd Oct 2020 14:37

I have sincerely believed, for years now, that it ought to be a compulsory part of our training that students spend time attending at a court.
1)
to learn how evidence should be given
2)
To see how ordinary persons, in financial and or company cases usually make themselves look stupid when they open their mouths.
3)
Especially in the Company court.
Once one has sat in the gallery for a couple of hours and watched what goes on, your professional outlook on life will be changed.

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