When a company is dissolved any assets owned by the company at the date of dissolution automatically pass to the Crown. This can happen in the following situations:
- A company is struck off the Register of Companies as a result of a failure to submit the periodic filings with Companies House.
- A company fails to dispose of all of its property before removing itself from the Register of Companies voluntarily.
- A liquidator disclaims company property (other than freehold land) as unprofitable or unsaleable property.
- A liquidator fails to dispose of company property.
The property which is passed to the Crown on dissolution is known as bona vacantia, which means “ownerless goods”. The Crown has two options; either to disclaim the property or sell the property at market value. The Crown usually disclaims property where it would be unprofitable for the Crown to sell it, examples include:
- A tenant’s interest in a commercial lease.
- Property subject to onerous covenants or other liabilities.
- Contaminated land.
- Property in negative equity.
- Property subject to disputes.
- Low value property (less than £1,000).
Upon the date of such disclaimer the rights, interests and liabilities of the dissolved company in the disclaimed property are terminated.
Any property which had become bona vacantia will automatically revert to the company if this is restored on the Register of Companies, but only if the property has not yet been sold by the Crown. There is uncertainty in the courts as to whether property which has been disclaimed would be reverted to the restored company.
It is always advisable to transfer any company property out of the company before dissolution occurs in order to avoid such property passing to the Crown.
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