Back to Life: How to Reinstate a Company and Why

Back to Life: How to Reinstate a Company and Why

In countries like Cyprus, England and others whose legal system is based on common law, companies deactivated by the company registries for certain reasons can be reinstated.

A most common reason why a company may need to be reinstated is that an asset was inadvertently left behind in a company, and unless it is recovered it will pass to the country’s Government, or in England – to the Queen. By way of examples, such assets can be shares in other companies and (or) real estate.

Another reason is that a company was inactive for a prolonged period such as more than a year, and when the owner wants to use it, the company is deactivated.

Whether a company can be reinstated depends on a number of factors. These include, in particular:

  • How the company was wound up; and
  • When the company was wound up.

How the company was wound up is important because legislation allows for different methods of winding up. In addition to the commonly known liquidations, legislation enables the company registries to “strike off” certain companies. Usually these are the companies that fail to comply with certain statutory filing formalities such as the annual returns, the financial so the company registry has good reasons to believe that they ceased trading but did not undergo the formal liquidation. Company registries are deactivating non-compliant companies upon lapse of a certain period.

If the company is “struck off” by the company registry, the next question is when it was struck off. In different countries legislation provides for different time frames to reinstate a “struck off” company. In Cyprus, for example, a “struck off” company can be reinstated within 20 years from the strike off date.

The procedure for reinstatement of the companies differs between jurisdictions but most commonly it requires a number of steps. The main steps are:

  • Bringing the Financial Statements and the statutory filings up to date; and
  • Obtaining the court order approving the company’s reinstatement.

If a reinstated company is re-activated, it is deemed to have never been struck off. So its assets, officers, ownership and management structure, and the registered address are the same as at the date of strike off. Changes can be made after the company’s reinstatement.

We have extensive experience in reinstating for our clients companies in a number of common law jurisdictions including Cyprus, England, BVI, Seychelles, and others.