Striking Off a Company From ROC (Registrar of Companies)

Can a company that has been struck off from the Registrar of Companies be brought back to live?

Companies usually seek to restore the company for several reasons such as to realise assets for shareholders or to continue the business or to pursue an action in contract or tort.

In a civil case, Asia Petan Organization had 2 directors and shareholders Song and Tan. Song informed Tan that he intended to commence proceedings against Tan for various breaches.  Tan then lodged an application to strike off the company and succeed. Song claimed that he was not aware that the company had been struck off. Song sought to reinstate the company in the Register in order to be able to bring a claim against Tan.

The law in this area, as reflected in s344(5) of the Companies Act, provides that any aggrieved person may apply to court to have the company’s name reinstated if it can show that at the time the company was struck off, it was carrying on business or in operation or that it is just to do so. The courts adopted a broad interpretation when applying s344(5) to determine whether companies, which have been struck off the ROC, should be restored on the Register.

In deciding for Song, the courts analysed s344(5) and made the following insightful findings:

  1. Firstly, ‘aggrieved persons’ have been interpreted to include any person who could demonstrate some proprietary or pecuniary interest rising from the company’s restoration. Interestingly, this includes the company’s creditors.
  1. Secondly, the section does not limit an application to reinstate to only situations where the company was struck off at the Registrar’s initiation but also includes situations where the company applies to the Registrar to strike itself off. This means that even if the company chose to “kill” itself off, it could still be brought back to live.  Therefore, it seems that striking off a company is not a permanent measure especially if creditors are lurking to claim against the company.
  1. Thirdly, the courts sought to interpret the word ‘just’. When assessing whether it would be “just” to restore a company to the Register, the following factors will be taken into consideration:
    • Purpose of restoring the company;
    • Practical benefit arising from the restoration; and
    • Prejudice to any persons.

If the Court is satisfied of the above, it should order to reinstate unless there are exceptional countervailing circumstances.  The facts will have to point to these factors and on a practical note, they do not appear to be very difficult to satisfy.

If you intend to strike off a company but you are unsure if you have legal basis to do so, feel free to contact us to put all your doubts to rest.

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Disclaimer: The information contained in this article is provided for general information only. Nothing contained in this article is intended to constitute or substitute legal advice, nor does it create a solicitor-client relationship.  We urge you to always seek professional legal advice even if the information in our article appears to address your queries and questions.  If in doubt, seek professional legal advice at the earliest.

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