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 Treasury Solicitor’s department is responsible for this function.
Jurisdiction and its importance in bona vacantia
Who deals with dissolved companies’ assets depends on
the last registered office address
where the asset is situated
If the company’s last registered office and the asset was in England or Wales, but not in the Duchies of Lancaster or Cornwall, its assets are dealt with by the Treasury Solicitor.
If the company’s last registered office and the asset was in Scotland its assets are dealt with by the Queen’s and Lord Treasurer’s Remembrancer
If the company’s last registered office and the asset was in Northern Ireland its assets are dealt with by the Crown Solicitor’s Office
If the company’s last registered office and the asset was in the Duchies of Cornwall or Lancaster, its assets fall to be dealt with by the Duchies’ solicitors, Messrs Farrer & Co
Farrer & Co.
66 Lincolns Inn Fields
London WC2A 3LH
The Duchy of Cornwall comprises the County of Cornwall. The Duchy of Lancaster comprises the county of Lancashire, most of Merseyside (except the Wirral peninsula) and parts of the counties of Greater Manchester, Cheshire and Cumbria. Further details as to the precise boundaries of the Duchy can be obtained from the Duchy Office.
Duchy Office
1 Lancaster Place
Strand
London WC2E 7ED
If the last registered office and the asset are in different jurisdictions, the location of the last registered office will usually determine who deals with the asset.
BVD do not deal with foreign assets but may deal with assets in England and Wales which are owned by a foreign company. If you are unsure please contact BVD and they will discuss the situation with you.
Asset types
Any asset can become bona vacantia including:
land and interests in land in England and Wales
bank accounts
other forms of cash (such as insurance policies, tax refunds or sums paid into court)
copyrights
trademarks
patents and other intellectual property
the benefit of mortgages where sums are owed to a dissolved company
the benefit of other assets or agreements that the company entered into
BVD do not deal with assets which are held by a dissolved company as a trustee for someone else.
Asset disposal
If an asset becomes bona vacantia it belongs to the Crown. The Crown does not have to deal with it in any particular way.
Normally an asset will either be disclaimed or sold for full market value.
What the Treasury Solicitor cannot do for you
pay the liabilities of dissolved companies
manage or insure property or assets
take formal possession of assets before selling them
sell assets for less than market value
sell where it is not cost effective to do so
give any form of title guarantee when selling – the risk of buying a bona vacantia asset is with the purchaser
give you legal advice
help resolve problems where there is no value for the Crown or where it would not be cost effective to do so
Avoid bona vacantia
It is the responsibility of the directors and shareholders to deal with the property and assets of a company before it is dissolved. Bona vacantia can be avoided by ensuring assets or property are transferred or dealt with before a company is dissolved.
You should ensure this happens as the role of the Treasury Solicitor is not to correct mistakes or negligence.
If you are a former member, shareholder or liquidator of a company and you want to get an asset back from the Crown you will need to restore the company or buy it from BVD for open market value.
There is no guarantee that BVD will sell it back to you or at all – they may want to sell it on the open market if that would get better value for the Crown.
Company restoration
It may be possible to restore the company. If this happens, the company comes back to life, bona vacantia no longer exists and the asset belongs to the company again. However, if while the company has been dissolved the Crown has disposed of the asset, you will not be entitled to the asset back but BVD will pay you whatever consideration they received from the sale (less whatever costs they had in dealing with the asset).
Refer an asset to the Treasury Solicitor
You don’t have to be a former director or shareholder of a company: anyone can refer an asset.
There are many types of common assets each requiring different information to be provided when being referred to the Treasury Solicitor.
Guidance specific to various types of asset is detailed below: