What happens if my Management Company gets struck off by company house?

Where a Company with Limited liability does not comply with Company Law in the making of the requisite Annual Return to Companies House, Companies House will in due course and after several warning letters and Final Notices eventually strike off the Company from the Register of Companies and announce the dissolution of the Company.

In the event of such an occurrence all of the assets of the Company are transferable to the Crown, including their Freehold where Management Companies own their own Freehold.

The existence of the management Company is critical for both flats and houses, where they are members of the management Company within the terms of the Lease or Transfer.  Certainly so far as flats are concerned those flats may then become difficult to sell (lending sources will not advance a mortgage under such circumstances and some Leases/Transfers have an requirement for the "approval of the Management Company" before a sale may be registered with Land Registry). It should also be noted that existing mortgages may be at risk and possibly subject to a request for repayment.  Generally speaking, the effect of the dissolving of the Management Company is likely to be less severe so far as houses are concerned, although still liable to give rise to problems at the time of the sale.

Companies that have been dissolved can usually be reinstated, although this is by no means a formality and neither is it certain. The process will require and will involve:

  • The appointment of a solicitor (Cost: approximately £800 - £1,200 plus disbursements).
  • The appointment of a Chartered Accountant for the purpose of Auditing and making the Annual Returns to Companies House; (Cost: Probably not exceeding £350 per year).
  • An application to the High Court. (Court Costs: Somewhere in the order of £400)
  • Affidavits from the Directors of the Company providing good reason as to why the Company should be reinstated, and why it was permitted that the Company should have been struck off.
  • Treasury Solicitor acting for the Crown (Cost: approximately £300 - £350

The charge made by Merlin Estates Ltd for making all the necessary arrangements on behalf of the Management Company will be £150 plus vat

Management Companies under the administration of Merlin Estates Ltd would not be allowed to reach an administrative situation whereby the Management Company would be dissolved by Companies House, unless Directors are not co-operating with the signing of Audited Accounts and Annual Returns to Companies House, or fail to maintain Directors.

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