Sometimes things go wrong and Isle of Man Companies which still own assets are dissolved. Usually this happens when the Company’s annual returns are left outstanding. In such cases the Registry typically uses its powers to dissolve the Company under Section 273.
In the old days, it would take several years for the Company to be struck off by the Registry for not meeting its filing obligations; these days however the Registrar is likely to start proceedings to dissolve the Company after just a few months if its filings are in arrears.
Technically assets belonging to dissolved Isle of Man companies fall Bona Vacantia – which means they become the property of the Crown or in the case of the Isle of Man – the Isle of Man Treasury in trust for the Crown (oh dear).
However, don’t panic…there is an administrative procedure (Section 273(B)) which allows Companies to be restored to the Register so that they can regain control and ownership of their assets.
The key elements are …
(i) The Company must have been struck off or dissolved less than 12 years ago.
(ii) It’s usual for the application to be made by the directors who were in office when the Company was dissolved or the registered shareholder. Note that beneficial owners cannot make an application; this must be the registered shareholder.
(iii) Creditors can also make an application for restoration but it’s usually more problematic as they have no power to complete the outstanding filings on the Company’s behalf and they can only take control of company assets via a liquidator. (Avoid if possible).
(iv) Before making an application, the applicant, being a director, creditor or member, must have sent a notice to each director, secretary and member of the company and published such notice in one newspaper circulating in the Isle of Man stating that the applicant proposes to apply to the Department of Economic Development for a direction to restore the company and that, unless written objection is made to the Department within one month of the date the notice was posted or published, the Department may make a direction to restore the company.
(v) The applicant must write to the Assessor of Income tax, the Attorney General and the VAT office asking for their written consent.
(vi) The applicant must complete, sign and lodge the form 273B form at the Registry together with the prescribed fee (currently £1185), copies of the letters and notice in (iv) & the original Government consents (v). Additionally it is possible to file outstanding forms, fees and late penalties at this point which will serve to speed up the application.
(vii) Once the application has been received, the Registry will publish a notice on its website stating an application has been lodged.
(viii) Assuming no objections are received within the 30 day notice period. the Department may issue a Direction that the Company may be restored; a certified copy of this will be sent by post, to the applicant.
(ix) Where the outstanding returns, fees and penalties have not yet been submitted, more often than not, as part of the Direction to Restore the Company the Applicant will be required to bring outstanding annual returns and other corporate filings up to date. These will be required to be submitted to the Registry with the certified copy of the Direction to Restore.
(x) Upon receipt of certified copy of the Direction to Restore and, if required, the outstanding corporate filings; the Companies Registry will restore the Company and the Company will be deemed to have continued in existence as though it had not been struck off or dissolved.