New Zealand’s Registrar of Companies will take steps to remove companies from the Companies Register in a number of situations, including where they conclude that the company is no longer in business because it has failed to file an annual return or where there has been persistent failure by the company’s directors and shareholders to comply with their duties.
The Registrar will advertise the names of companies to be removed, and an objection can be raised to avoid removal at that time. However, sometimes an issue arises after the company has been removed, or we don’t see the advertisement and it is necessary to apply for restoration. An example of this might be where a company is a party to a property transaction, but has been removed from the Register before settlement.
Who can apply to restore a company?
An application to the Registrar of Companies to restore a company to the Register can only be made by someone who was, at the time it was removed, a company’s director or shareholder, liquidator or receiver, or a creditor.
What do I need to show?
The Registrar will restore a company if, at the time of its removal, the company was:
- carrying on business (and there is a proper reason for it to continue in existence);
- a party to legal proceedings; or
- in receivership or liquidation.
The Registrar will also restore a company if it is satisfied that the grounds for removal didn’t exist at the time the company was removed.
How do I apply?
Typically, when a company needs to be restored to the Register, an application directed to the Registrar of the Companies Office will suffice. The application, under section 328 of the Companies Act 1993, can be made online and the process can take up to eight weeks to complete.
Eight weeks is too long!
Sometimes an urgent application is required, for example if a transaction is to settle inside the eight-week timeframe. In these situations, it is possible to apply to the High Court for an order for restoration. These applications, made under s 329 of the Companies Act, can be completed much more quickly.
The High Court also has much broader powers than the Registrar, which can make an application under s 329 more appropriate, for example, if the person making the application does not fall into one of the categories of people who can apply to the Registrar, or the grounds for the application are not grounds upon which the Registrar can restore a company.
These applications are a lot more labour-intensive, and usually require the assistance of a lawyer. A lawyer will prepare an application with supporting documents, and serve it on the Registrar of Companies and Secretary of the Treasury as respondents. Once the application has been served, it will be set down for a hearing in the High Court. At this hearing, the Court will (usually) make an order that the company is to be restored. This order must then be sealed by the Court, and served upon the Registrar. Once the order is served on the Registrar, they will immediately restore the Company to the Register.
After restoration
Once a company has been restored, either by application to the Registrar or by the Court, the company must file a copy of its most recent annual return with the Companies Office.
Need advice or assistance?
We usually recommend applications for restoration are made to the Registrar of Companies, unless the matter is urgent or you are not authorised to file an application in that way. Either way, Fortune Manning’s experienced team of lawyers can provide advice and guidance on company restoration and other legal issues.
If you would like to discuss anything in this article further, or have another legal question, call us on 0800 4 FMLAW (0800 436 529).