Dissolved Company - Debt Appears after disolution

[molly8928]

Hi there, we wound up our business via the voluntary strike off method, disolved by Companies House. No outstanding debts & followed the rules etc.

Subsequently we've received a bill through dated before the process.

But one which we had no knowledge of....



Just want to make sure we don't fall foul of the dissolution rules because of course we did not write to that creditor or acknowledge the debt, we had no idea of it.

The date of the creditor bill is just before we filed to strike off at companies house but we have now (2 months after dissolution) received the first written communication of such. I strongly imagine that given the date on the invoice they'll argue it was sent in advance etc (but we definitely hadn't received or signed for anything at all)


Thank you, Mols

[efpom]

If a company is dissolved using the strike off procedure then creditors can apply to have the company restored. Once it has been restored, they can then take enforcement action against it for repayment of the debt.

You say that you had no knowledge of the debt.

That is a matter of evidence and whilst the date on the invoice is prima facie evidence of the opposite, the time when the subject of the invoice was performed is the date that you knew, or should have known, that the debt existed.

[molly8928]

Thanks for your help and quick reply. Yes if the company is restored as a result then I can understand that - then would go down the liquidation route rather than dissolution.

The nature of the invoice is actually for something which we dispute - it's to do with an IP infringement which we don't consider to have infringed and at very least has the incorrect figures and dates.

At dissolution we had only ever had very sparse email contact requesting further information - absolutely no mention of a bill (i.e. our knowledge of a creditor).

So there was not a date when the invoice was performed etc (wasn't like we had a supplier with a supply date and unpaid invoice for example)


Just want to make sure that I deal with it correctly now - maybe speak with Companies House to show that we're not hiding anything etc, proof of director conduct?



Might be that I'm worrying about nothing and it's just somebody trying it on. But I always try and deal with these things as best I can

[efpom]

Got it - its a claim not a "classic" debt, for want of a better term. Same process applies. First apply for the company to be restored them issue proceedings against it.

If a letter accompanied the invoice, you might wish to reply saying the company no longer exists, but as a courtesy you are replying, and direct them to companies house for all further enquiries.

No need for you to do anything with companies house.

What is the amount on the invoice?

[molly8928]

That's exactly it, not a 'classic' debt. I appreciate your advice, it's for just short of £7000.

My worry is that with the date preceding the dissolution could we as directors be in breach of director duty on dissolution, as you say with the date on the invoice being prima facie.

That was my logic for contemplating getting in touch with Companies House, to show that the moment that we've been made aware of this we're acting diligently, not shying away from anything etc.

I read quite in depth on director duties on dissolution etc & we tried to follow it all to the letter - this is rather a curveball that's been thrown out there!

[efpom]

With respect, you are getting ahead of yourself

Your directorship ceased when the company ceased to exist.

Companies House will not deal with you. In any event it has no power to investigate. That investigatory function is that of the Insolvency Service.

As the company when it existed, disputed to the asserted creditor that the asserted debt exists, it then falls to that entity to prove the debt exists, by obtaining an Order from the court. It cannot do that until the company is restored to the register.

One purpose of the strike out process, which at every stage is published in the Gazette, is to give anyone who says that it is a creditor, time to oppose the strike off.

[molly8928]

I agree that I'm largely over-thinking it - just considering the scenarios and the most prudent course of action.

Would we have chance to defend ourselves (dispute the claim) during the court application for restoration? Or not with the company no longer being in existence

Thank You

[R0b]

Company restoration is a formality and at the discretion of the court, so you wouldn't have grounds to object to it being restored, at least I've never heard of someone attempting to do that and if they did, the grounds for challenging a restoration is likely to be exceptionally rare.

The company would need to be restored to the register and then a further claim issued for the debt so there are two separate applications. Unless one is making a claim against a company for the purpose of claiming against the company's insurer e.g. personal injury claims, it is not usually worth restoring a company because it is generally expensive to do (you normally have to agree to paying the treasury solicitor's costs for starters) and secondly, the company likely doesn't have any assets to claim against so would be a waste of time.

As suggested, it would be sensible to inform them that the company has wound up and dissolved. Otherwise they might issue a claim, seek default judgment and send in the bailiffs, and if the company's registered office is your home address, they will come after you there and becomes a lot more hassle.

[efpom]

Your mind working overtime - think of mine! - I jest, I am happy to help.

1. Legal proceedings cannot be served on a company that does not exist.
2. A company can be raised from the dead.
3. The process of raising it from the dead is to apply to the court for an order that the entity that has the power to raise it from the dead exercises that power, i.e. restore it to the register.
4. The court to apply to is the one that has the exclusive jurisdiction to make such an order, which is in one of the three jurisdictions in the UK.
5. In the UK there is a trinity of entities that have that power. Depending on where in the UK the company lived before it died, the entity will be Companies House in England &Wales or Scotland or Northern Ireland.
6. If the company is, in fact, raised from the dead i.e. restored to the register, then and only then, can it be served with legal proceedings.
7. By virtue of sections 1028(1) and 1032(1) of the Companies Act 2006, the effect of restoration to the register is that the company is deemed to continue in existence as if it had not been dissolved or struck off the register. This means that the directors and shareholders of the restored company will be the same as at the time that the company was dissolved. A director can thus resign, and new directors can be appointed, change its registered address, and the company can defend any proceedings against it.
8. The residence of the claimant is irrelevant.

Companies Act 2006
Section 1000 - Power to strike off company not carrying on business or in operation
Section 1029 - Application to court for restoration to the register
Section 1030 - When application to the court may be made
Section 1031 - Decision on application for restoration by the court
Section 1032 - Effect of court order for restoration to the register

[obscure]

Even if the company is raised from the dead there still wouldn't be a valid debt because claiming infringement doesn't create a valid debt and payment can't be enforced. For a debt to exist you either have to agree to pay in order to settle the claim or a court must find you guilty of infringement.

So, not only do they have to resurrect the company but they have to get the company to agree to a settlement or sue for infringement and win before an enforceable debt would exist.