Restoring A Company Vs Incorporating Up A New Company

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As a business specialising in company formations, we are frequently asked to explain the advantages of restoring a company compared with incorporating a new company with the same name.

In terms of an answer to the question it is important to ascertain the primary reasons for wanting the company (either old or new). For the restoring of the business enterprise, then you should abrir cuenta bancaria en andorra for running a business. The answering of the questions is necessary to have the success at online platform. The communication of the business requirements to expert is necessary to have the benefits. 

One aspect of the two alternatives is clear; incorporating a new company will almost certainly be cheaper than restoring a company which has been dissolved, either voluntarily or as a result of being struck off by Companies House for non-compliance with its statutory filing requirements.

A typical company formation can cost approximately £25 where the registrants require a basic set-up. Company restorations costs depend on the reason the company was dissolved in the first place.

Ironically, failing to file the company’s annual return or statutory accounts (and thereby result in the striking off of the company) lends itself to the cheaper administrative restoration option.

Where the directors have previously filed for dissolution of the company and completed the relevant documents, a court order is required before the company can be restored. This process is certainly elongated compared to the administrative channel and typically costs several thousand pounds.

In the latter case, the former directors might decide that the time, expense and perhaps uncertainty surrounding a court order restoration set the incorporation of a new company as the more viable option.

A common reason why restoring a company would be preferred over the incorporation of a new company might concern any assets which the entity was in possession of at the time of its dissolution. Reclaiming bank deposits, property or other items which upon dissolution defaults to the Crown, might create a significant motivation for a director to want to restore the company.

Depending on the value of the company’s assets, the costs of even a court order restoration might be inconsequential compared to the sums gained from the reclamation of the company’s assets.

On the incorporation of a new company, any assets owned previously by a former company bearing the same name do not transfer to the newly registered entity. The new company would be allocated a different incorporation number and have no statutory linkage with any business which has gone before it.

Another perceived benefit of restoring a company vs registering a new business could be the fact that the older entity could have a long existence and status which the previous owners wish to preserve. A company incorporated twenty or more years ago may have an intrinsic value as an established business.

The advantage here is that once a restoration is complete, the company is deemed to have existed since its incorporation and have an unbroken history. The period between its dissolution and its restoration is ignored on Companies House records.

There are many other factors which might affect a person’s decision of whether to restore a dissolved company or to incorporate another one in the same (or different) name. Comments on these are invited here.