Practice Guide 35 – Corporate insolvency

Updated: September 2012

Update

This edition of the guide replaces the October 2011 edition. Amendments have been made to clarify the procedure following disclaimer.

Scope of this guide

This guide gives advice on the land registration aspects of transactions by liquidators of companies registered under the Companies Acts. It is aimed at liquidators of companies and conveyancers and you should interpret references to ‘you’ accordingly. Land Registry staff will also refer to it.

1 Abbreviations and terms used

In this guide:

‘CA 2006’ means the Companies Act 2006

‘conveyancer’ means an authorised person within the meaning of s.18, Legal Services Act 2007 who is entitled to provide the conveyancing services referred to in paragraphs 5(1)(a) and (b) of Schedule 2 to that Act, or a person carrying out those activities in the course of their duties as a public officer. It also includes an individual or body who employs or has among their managers such an authorised person who will undertake or supervise those conveyancing activities (r.217A, LRR 2003)

‘Fee Order’ means the current Land Registration Fee Order

‘IA 1986’ means the Insolvency Act 1986

‘LRA 2002’ means the Land Registration Act 2002

‘LRR 2003’ means the Land Registration Rules 2003.

2 Introduction

This guide gives advice on the land registration aspects of estate transactions by liquidators of companies registered under the Companies Acts. It describes the evidence that will be required by Land Registry when a company that is the proprietor of a registered estate is in liquidation. It explains how the appointment of a liquidator may be entered in the register. It gives guidance on the dispositions that may be made by liquidators, including distributions in specie. Finally, it considers the situations that will arise where a registered estate is disclaimed by the liquidator, and where a company remains in the register as proprietor of a registered estate after its dissolution.

3 Evidence of liquidation

3.1 Introduction

In order to establish that a company is in liquidation and that a liquidator has been appointed you will need to produce evidence to Land Registry. The later parts of this guide identify the occasions when you will need to do this. The nature of the evidence varies according to the type of liquidation, as explained in the following paragraphs.

3.2 Certification of copy documents

Any copy documents or orders of the court mentioned below will need to be certified as true copies before being sent to us¹. This may be done, for any document, by the liquidator or by their conveyancer. Copies of resolutions passed at company’s meetings may be certified by the company secretary or by its conveyancer.

¹ R.214, LRR 2003.

3.3 Members’ voluntary winding up

The evidence that we require in the case of a members’ voluntary winding up is:

• a certificate, by the secretary of the company or by the liquidator or by a conveyancer acting for the company or the liquidator, that a statutory declaration of solvency complying with the requirements of s.89, IA 1986 has been filed with the Registrar of Companies

• a certified copy of the resolution passed by the general meeting of the company appointing the liquidators².

² Under s.91(1), IA 1986.

3.4 Creditors’ voluntary winding up

The evidence that we require in the case of a creditors’ voluntary winding up is:

• a certified copy of the resolution passed at the company’s general meeting (sometimes called the ‘members’ meeting’) resolving that the company be wound up³ and appointing the liquidator, and either

• a certified copy of the resolution passed at the creditors’ meeting appointing the liquidator⁴, or

• a certificate by the liquidator appointed at the company’s general meeting, or by their conveyancer, that a meeting of the creditors was duly held in accordance with s.98(1), IA 1986 and that the creditors’ meeting either confirmed the appointment of the liquidator by the company’s meeting or did not pass a resolution nominating a liquidator⁵.

³ Under s.84(1), IA 1986.

⁴ Under s.100(1), IA 1986.

⁵ If the general meeting of the company and the creditors’ meeting nominate different liquidators, the person nominated by the creditors will act unless an order is made by the court on an application made within seven days of the creditors’ nomination – s.100(2) and (3), IA 1986.

It is possible for a company to move directly from administration into a creditors’ voluntary winding up^5A. In that case, instead of the evidence specified above, we require a certified copy of form 2.34B (Notice of move from administration to creditors’ voluntary liquidation)^5B. The copy must be of the form signed by the administrator and stamped as received by the Registrar of Companies – the company enters liquidation when the form is registered by the Registrar of Companies^5C.

^5A Paragraph 83 of Schedule B1, IA 1986.

^5B Prescribed by r.2.117, Insolvency Rules 1986.

^5C Paragraph 83(6) of Schedule B1, Insolvency Rules 1986 and r.2.117, Insolvency Rules 1986.

3.5 Liquidation by order of the court

We need a certified copy of the winding up order⁶ in every case. If the official receiver is the liquidator nothing more is required. For other liquidators, you must produce as evidence:

• a certified copy of the resolution passed at the creditors’ meeting appointing the liquidator⁷

• a certified copy of the resolution passed at the contributories’ meeting appointing the liquidator and a certificate by the liquidator, or by their conveyancer, that a meeting of the creditors was duly held and that the creditors’ meeting either confirmed the appointment of the liquidator or did not pass a resolution nominating a liquidator⁸

• a certified copy of the order of the court appointing the liquidator⁹, or

• a certified copy of the appointment of the liquidator by the Secretary of State¹⁰.

⁶ Under s.125, IA 1986.

⁷ Under s.139(2), IA 1986.

⁸ If the creditors’ and the contributories’ meetings nominate different liquidators, the person nominated by the creditors will act unless an order is made by the court on an application made within seven days of the creditors’ nomination – s.139(3) and (4), IA 1986.

⁹ Under ss.139(4) or 140, IA 1986. At any time after the presentation of a winding-up petition, the court may appoint a provisional liquidator to carry out such functions as it may confer. The powers of a provisional liquidator may be limited by the order making the appointment.

¹⁰ Under s.137, IA 1986.

4 Entry of appointment of liquidator in the register

4.1 Application required

We will only make the entries mentioned in this part of the guide if the liquidator lodges an application¹¹. There is no machinery for automatically making these entries when a company as proprietor of a registered estate or of a registered charge goes into liquidation.

¹¹ Under r.184(4) & (5), LRR 2003.

Your application must be made using a form AP1 and be accompanied by the evidence mentioned in section 3 Evidence of liquidation, together with the appropriate fee under the Fee Order.

If you are lodging an application for registration of a company as the proprietor of a registered estate or of a registered charge, you must also supply the evidence mentioned in section 3 Evidence of liquidation. You will not need to pay any additional fees in respect of the liquidation entries¹².

¹² The same evidence is required when a company in liquidation applies for first registration of its title to an estate. The certificate in the first registration application form as to the absence of any petition or resolution for winding up should be amended accordingly.

4.2 Company in liquidation as proprietor of a registered estate

Depending upon the method of appointment, we will make one of the following forms of entry in the proprietorship register.

“(Date) By a Resolution dated 11 May 2005 Arthur Brown of 2 Zeus Street, Kemptville, Cornshire KV3 3PH has been appointed liquidator of XYZ Limited.”

“(Date) By an Order of the court dated 20 August 2005 Clare Dunne of 4 Apollo Court, Poseidon Street, Kemptville, Cornshire KV3 5XJ has [become] [been appointed] the liquidator of XYZ PLC.”

“(Date) By an Appointment made by the Secretary of State for Trade and Industry dated 16 April 2005 John Stitch of 6 Xerxes Buildings, Darius Road, Kemptville, Cornshire KV3 7XY was appointed liquidator of XYZ Limited.”

We will also enter the following restriction in the proprietorship register (provided these circumstances apply) if you apply for it in form RX1 and complete panel 9 with the wording set out below.

“(Date) RESTRICTION: No disposition by the proprietor of the registered estate other than a transfer on sale is to be completed by registration unless made pursuant to powers granted by the Insolvency Act 1986.”

Where the winding up is by order of the court, we will enter any restriction which may be required to reflect the provisions of such an order. Where the court has ordered the liquidator to apply, or the liquidator decides to apply, for restrictions to be entered, such an application must be made in form RX1. Where the court has ordered the registrar to enter a restriction, using its powers under s.46, LRA 2002, a form AP1 should be completed and submitted together with a certified copy of the court order.

You will also need to supply the appropriate fee under the Fee Order for the entry of the restriction if it is applied for in form RX1. Where a restriction is required to be entered by a court order no fee is payable.

4.3 Company in liquidation as proprietor of a registered charge

Where the company in liquidation is, or is being registered as, the proprietor of a registered charge entries similar to those mentioned in section 4.2 Company in liquidation as proprietor of a registered estate will be made in the charges register as follows.

“(Date) By a Resolution dated 2 February 2006 Georgina Home of 54 Jupiter Lane, Kemptville, Cornshire KV3 8NR has been appointed liquidator of XYZ Limited.”

“(Date) By an Order of the court dated 15 January 2006 Ian Jones of 94 Mercury Crescent, Kemptville, Cornshire KV3 5XJ has [become] [been appointed] the liquidator of XYZ PLC.”

“(Date) By an Appointment made by the Secretary of State for Trade and Industry dated 22 October 2004 Katharine Lewis of 6 Juno Plaza, Kemptville, Cornshire KV3 7PR was appointed liquidator of XYZ Limited.”

We will also enter the following restriction in the charges register (provided these circumstances apply) if you apply for it in form RX1 and complete panel 9 with the wording set out below.

“(Date) RESTRICTION: No disposition by the proprietor of the Charge dated 25 March 1999 in favour of XYZ Limited referred to above is to be registered other than a discharge, a transfer of charge for value or a transfer in exercise of the power of sale, unless made pursuant to the powers granted by the Insolvency Act 1986.”

Where the winding up is by order of the court, we will enter any restriction that may be required to reflect the provisions of such an order. Where the court has ordered the liquidator to apply, or the liquidator decides to apply, for restrictions to be entered, such an application must be made in form RX1. Where the court has ordered the registrar to enter a restriction, using its powers under s.46, LRA 2002, a form AP1 should be completed and submitted together with a certified copy of the court order.

If the entry of the restriction is applied for in form RX1, you will also need to supply the appropriate fee under the Fee Order. Where a restriction is required to be entered by a court order no fee is payable.

4.4 Restricted powers to borrow

Sometimes the resolution or the court order appointing the liquidator will reveal that they have restricted powers to borrow money on behalf of the company.

If the power of the liquidator is restricted in the resolution, and you want to have this entered in the register as a restriction, we will require a completed form RX1. You must complete panel 9 of form RX1 with the exact wording that you require.

If the power of the liquidator is restricted by the court order we will enter any restriction that may be required to reflect the restriction on the liquidators power to borrow. Where the court has ordered the liquidator to apply, or the liquidator decides to apply, for restrictions to be entered such application must be made in form RX1. Where the court has ordered the registrar to enter a restriction, using its powers under s.46, LRA 2002, a form AP1 should be completed and submitted together with a certified copy of the court order.

If the entry of the restriction is applied for in form RX1, you will also need to supply the appropriate fee under the Fee Order. Where a restriction is required to be entered by a court order no fee is payable.

5 Dispositions by companies in liquidation

5.1 General considerations

Anyone dealing with a company acting by its liquidator must satisfy themselves that the transaction in question is within the liquidator’s powers, even if the restrictions mentioned in section 4.2 Company in liquidation as proprietor of a registered estate have been entered in the register. In practice, however, in view of the wide powers contained in Schedule 4, IA 1986, we are unlikely to raise any question in the case of a disposition, such as a transfer on sale, that is apparently made for the purpose of realising the company’s assets. Where the liquidation has not already been noted in the register, you must supply the evidence mentioned in section 3 Evidence of liquidation with any application to register a disposition by the company acting by its liquidator.

5.2 Distributions in specie

Any surplus of assets in a voluntary winding up, after all liabilities have been satisfied and costs have been paid, must be distributed by the liquidator among the members of the company according to their rights and interests therein¹³. If the memorandum and articles of association so provide, this distribution may be made in specie. We require that any such transfer by a company, acting by its liquidator to a member of the company, must, when lodged for registration, be accompanied by:

• the evidence mentioned in section 3 Evidence of liquidation (if we have not already noted the liquidation in the register)

• a certified copy of the memorandum and articles of association that confer the power to distribute in specie

• a certified copy of any resolution required by the memorandum and articles of association to authorise the distribution

• evidence (for example a certified copy resolution or liquidator’s certificate) that any provisions have been complied with

• a certificate as to the value of the estate transferred

• the fee assessed on that value under the Fee Order.

¹³ Under s.107, IA 1986.

5.3 Execution of documents

Any disposition made by a company in liquidation may be executed by the liquidator, either by affixing the company seal and signing the document to attest that the seal has been affixed in their presence¹⁴ or by signing the document as a deed in the name and on behalf of the company¹⁵.

¹⁴ Paragraph 7 of Schedule 4, IA 1986 confers on a liquidator the power to use, when necessary, the company’s seal.

¹⁵ Paragraph 7 of Schedule 4, IA 1986 gives a liquidator power to execute all deeds and other documents in the name and on behalf of the company. A person with such a statutory power is entitled to execute a deed by signing the name of the company in the presence of at least one witness – see s.74(3), Law of Property Act 1925.

Examples of attestation clauses that would be acceptable are as follows.

 

If the liquidator is not a party to the deed, execution in their own name is not considered to be essential.

The making of a winding up order puts an end to the powers of the directors and secretary to execute documents on behalf of the company. In the case of a voluntary winding up those powers cease on the appointment of the liquidator except to the extent that they are sanctioned by either:

• In a member’s voluntary winding up

the liquidator or the company in general meeting¹⁶, or

• In a creditor’s voluntary winding up

the liquidation committee, or the creditors (if there is no such committee)¹⁷.

¹⁶ S.91(2), IA 1986.

¹⁷ S.103, IA 1986.

You must support any document executed under such powers with evidence that the requisite sanction had been given.

6 Disclaimer by the liquidator

6.1 Power to disclaim onerous property

A liquidator can disclaim onerous property by giving the prescribed notice. The liquidator may do this even though they have already taken possession of the property, tried to dispose of it or otherwise exercised rights over it¹⁸. The notice operates to determine the rights, interests and liabilities of the company in respect of the property. It does not, however, otherwise affect the rights or liabilities of any other person¹⁹.

¹⁸ S.178(2), IA 1986.

¹⁹ S.178(4), IA 1986.

6.2 Notifying Land Registry without a formal application

Under r.4.187(3A), IR 1986, the liquidator must send Land Registry a copy of the notice of disclaimer of a registered estate or of a registered charge as soon as reasonably practicable after it has been authenticated (ie signed) and dated by the liquidator. This can be a plain copy. No formal application in form AP1 is required at this stage and no fee is payable. We will make a note in the register in the following terms.

“A notice dated [….] by the liquidator of […..] stated that the [registered estate in this title] [registered charge dated […] referred to above]  was being disclaimed under section 178 of the Insolvency Act 1986.

NOTE: Copy filed.”

Although a liquidator is not required to send us a copy of a notice of disclaimer of a noted or beneficial interest, we will make a similar note if the notice relates to a noted interest. However, we will not make any entry if the notice of disclaimer relates only to a beneficial interest.

6.3 Disclaimer of leaseholds

A disclaimer of a leasehold property does not take effect until:

• a copy of the disclaimer has been served on any underlessee or mortgagee (so far as the liquidator knows their addresses), and either

• no application for a vesting order is made to the court within a period of 14 days from the day on which the last copy notice was served, or

• the court has directed that the disclaimer is to take effect²⁰.

²⁰ S.179, IA 1986.

A liquidator who has disclaimed a registered lease may apply for formal notice of the disclaimer to be entered in the register with or without an application to close the title under r.79, LRR 2003 and/or to cancel notice of an unregistered lease in the landlord’s title.

6.3.1 Application to enter notice of disclaimer and/or to close the registered leasehold title under r.79, LRR 2003

The application must be made in form AP1 accompanied by:

• a copy of the notice of disclaimer unless there is already a notification entry in the property
• register as in section 6.2 Notifying Land Registry without a formal application
• the evidence of liquidation as mentioned in section 3 Evidence of liquidation
• the fee as prescribed under the current Fee Order.

If applying to close the registered leasehold title, you must also lodge:

• the original lease (or an adequate explanation of why it cannot be produced)
• evidence of devolution of title if the company is not the original lessee. We will serve notice of the application on the registered proprietor of the freehold or superior leasehold title on which the disclaimed lease is noted, on any chargee or underlessee and on any other party whose interest would be affected by closure of the title.

If there is no evidence of any registered or noted charge, sub-lease other third party rights affecting the disclaimed leasehold title, or satisfactory evidence is supplied that every such interest has also come to an end, we will close the leasehold title and cancel any notice of the lease on the landlord’s registered title.

However, as determination of a lease by disclaimer does not affect the rights and liabilities acquired before the disclaimer by persons other than the tenant, we will not close the registered leasehold title if there is a registered or noted charge in the disclaimed leasehold title, unless the application includes:

• an application to discharge the registered charge or to cancel the entry of the noted charge
• evidence that the chargee’s application for a vesting order has been dismissed (so that the charge is excluded from all interest in the property under s.182(4), IA 1985), or
• evidence of forfeiture of the lease.

If we cannot close the registered leasehold title because there is evidence of a continuing registered or noted charge, we will make the following entries in the title for the disclaimed lease:

• in the property register:

“This lease was disclaimed by the liquidator of the registered proprietor on [date] pursuant to section 178 of the Insolvency Act 1986.

NOTE: Copy disclaimer filed.”

• in the proprietorship register:

“RESTRICTION: No disposition of the registered estate is to be completed by registration.”

We will also add the following note to the notice of the disclaimed lease in the landlord’s freehold or superior leasehold title:

“This lease was disclaimed by the liquidator of the registered proprietor on [date]. The registered leasehold title has not been closed because there is a subsisting [registered] or [noted] charge in favour of [name] dated [date].

NOTE: Copy disclaimer filed under [leasehold title number].”

The leasehold title for a disclaimed lease may be closed if there is no registered or noted charge but there is a registered sub-lease or other third party rights noted in title, in which case the following entries will be made:

• in the property register of any noted registered sublease:

“The lessor’s title was registered but the lease was disclaimed by the liquidator of the registered    proprietor on [date].

NOTE: Copy disclaimer filed under [leasehold title number].”

• and in the charges register or L Schedule of the landlord’s title:

“This lease was disclaimed by the liquidator of the registered proprietor on [date]. The registered leasehold title has been closed. There [is a] or [are] subsisting [underleasehold or details of other surviving right(s)] interest under this lease.

NOTE: Copy disclaimer filed [under title number].”

6.3.2 Application to cancel notice of an unregistered lease

The application must be lodged in form CN1 accompanied by:

• a copy of the notice of disclaimer unless there is already a notification entry in the property register as in section 6.2 Notifying Land Registry without a formal application
• the evidence of liquidation as mentioned in section 3 Evidence of liquidation
• the original lease (or an adequate explanation if it cannot be produced)
• evidence of devolution of title if the company is not the original lessee
• the fee based as prescribed under the current Fee Order.

Where there is no evidence of any charge, sub-lease or of other third party rights affecting the disclaimed noted lease, then the notice of the lease in the landlord’s title may be cancelled.

Where there is evidence of a continuing charge, sub-lease or other third party rights affecting the disclaimed noted lease, the notice of the lease cannot be cancelled, but the following entries will be made:

• in the property register of any subsisting registered sub-lease granted out of the unregistered lease:

“The lessor’s lease was disclaimed by the liquidator on [date].

NOTE: Copy disclaimer filed under [freehold/superior leasehold title number].”

• and in the existing entry for the lease in the charges register or L Schedule of the landlord’s leasehold title:

“This lease was disclaimed by the liquidator on [date]. There [is a ] or [are] subsisting [underleasehold or details of other surviving right(s)] interest under this lease.

NOTE: Copy disclaimer filed.”

6.4 Disclaimer of freeholds

Disclaimer of a freehold estate in land is possible, but it is less common.

If no vesting order is made by the court, the freehold estate determines and the land escheats to the Crown or to one of the Royal Duchies of Cornwall or Lancaster. However, we do not close the registered title unless and until we register either a grant from the Crown of a new freehold estate or a transfer from one of the Royal Duchies.

6.4.1 Notifying Land Registry without a formal application

A liquidator must send Land Registry a copy of the notice of disclaimer of a freehold estate, as explained in section 6.2 Notifying Land Registry without a formal application.

6.4.2 Application for formal notice of the disclaimer to be entered in the register under rr.79 and 173, LRR 2003

The requirements are as stated in section 6.3.1 Application to enter notice of disclaimer and / or to close the registered leasehold title under r.79, LRR 2003.

We will make the following entry in the property register.

“The registered estate in this title has determined on disclaimer by the liquidator of the registered proprietor on [date] pursuant to section 178 of the Insolvency Act 1985.

NOTE: Copy disclaimer filed.”

If the escheated freehold title is subject to a registered lease or other inferior interest, we will also make the following entry in the property register for that title.

“The [lessor’s (or as the case may be)] registered estate has determined on disclaimer by the liquidator on [date] pursuant to section 178 of the Insolvency Act 1986 but the entries relating to the estate continue in the register.

NOTE: Copy disclaimer filed under [disclaimed freehold title number].”

We may qualify the above entries where there is some doubt as to whether escheat has taken place.

7 Vesting of registered estates on dissolution

7.1 Dissolution

A company that has been wound up voluntarily is deemed to be dissolved three months after the liquidator files the final account and return at the Companies Registry²¹. Where the winding up was by the court, automatic dissolution follows three months after filing at the Companies Registry of the notice of the result of the final meeting by the liquidator or of a notice from the Official Receiver that the winding up is complete²². The Official Receiver may apply to the Registrar of Companies for early dissolution if the assets would not cover the expenses of winding up and no further investigation of the company’s affairs seems to be necessary²³.

²¹ S.201(2), IA 1986.

²² S.205(2), IA 1986.

²³ S.202, IA 1986.

The Registrar of Companies has power to dissolve defunct companies by striking them off the register²⁴. This power applies where a company appears not to be operating and fails to respond to notices or where a company is being wound up and either no liquidator is acting or the affairs seem to have been fully wound up but the final returns have not been filed.

²⁴ S.1000, CA 2006.

When Land Registry is informed of the dissolution of a company that is proprietor of a registered estate or registered charge, we may enter notice of that fact in the register.

7.2 Property of a dissolved company

On dissolution, all the property and rights of a company (other than property held on trust for another) are deemed to be bona vacantia²⁵, and will belong to the Crown or to the Duchy of Lancaster or the Duke of Cornwall, as the case may be²⁶.

²⁵ S.1012, CA 2006.

²⁶ If the dissolved company had its registered office in either the Duchy of Lancaster or the Duchy of Cornwall, then that Duchy takes any estate of the company wherever it is situated. Estates lying within the area of the Duchy of Cornwall vest in the Duke on dissolution, wherever the registered office of the company may have been situated. The Duchy of Cornwall is broadly the same extent as the modern county. Enquiries as to the extent of the Duchy of Lancaster, which is considerably greater than the modern county of Lancashire, may be addressed to our Fylde Office.

On an application by the Crown, the Duchy of Lancaster or the Duke of Cornwall to be registered as proprietor of land that is bona vacantia after the dissolution of a company, the evidence that we require will depend upon the way in which the company was dissolved.

• Voluntary winding up

Evidence that the liquidator filed the final account and return at the Companies Registry three months earlier.

• Winding up by the court

Either:

• Defunct company

Evidence that the Registrar of Companies has struck the company off the register.

In all cases we will require the application to be made using form AP1. A fee is required based on the value of the estate, payable under the Fee Order.

The company will be cancelled from the proprietorship register and one of the following pairs of entries will be made as appropriate.

“(Date) Proprietor: THE SOLICITOR FOR THE AFFAIRS OF HER MAJESTY’S TREASURY of One Kemble Street, London WC2B 4TS.

(Date) The registration of the proprietor of the registered estate gives effect to section 1012 of the Companies Act 2006 and is subject to the provisions thereof.”

or

“(Date) Proprietor: THE SOLICITOR FOR THE AFFAIRS OF THE DUCHY OF LANCASTER of Duchy of Lancaster Office, Lancaster Place, Strand, London WC2E 7ED.

(Date) The registration of the proprietor of the registered estate gives effect to section 1012 of the Companies Act 2006 and is subject to the provisions thereof.”

or

“(Date) Proprietor: HIS ROYAL HIGHNESS CHARLES PHILIP ARTHUR GEORGE PRINCE OF WALES, DUKE OF CORNWALL AND ROTHESAY, EARL OF CHESTER AND CARRICK, BARON OF RENFREW, LORD OF THE ISLES AND GREAT STEWARD OF SCOTLAND of Property Services Manager of the Duchy of Cornwall, The Old Rectory, Newton St. Loe, Bath BA2 9BU and The Secretary and Keeper of the Records, Duchy of Cornwall Office, 10 Buckingham Gate, London SW1E 6LA in right of his Duchy of Cornwall.

(Date) The registration of the proprietor of the registered estate gives effect to section 1012 of the Companies Act 2006 and is subject to the provisions thereof.”

Where an estate that has so vested as bona vacantia is subsequently disposed of, a later order reviving the dissolved company will have no effect on the disposition²⁷. The revived company may be entitled to compensation.

²⁷ Under SS.1029-1032, CA 2006, the court may declare the dissolution of a company (whether wound-up or struck off) void on an application made within six years from the dissolution.

8 Crown disclaimer of bona vacantia

8.1 Power to disclaim onerous property

The Treasury Solicitor and the Solicitors to the Duchies of Lancaster and Cornwall have power to disclaim property that has vested as bona vacantia as mentioned in section 7.2 Property of a dissolved company²⁸. The disclaimer is effected by a notice in writing signed by the appropriate solicitor. A copy of such notice may be sent to the registrar by the appropriate solicitor.

²⁸ S.1013, CA 2006, or where the company was dissolved before 1 October 2006, s.656, CA 1985.

8.2 Notifying Land Registry of disclaimer without a formal application

Although they are not formally required to do so, the Treasury Solicitor or either of the Royal Duchies may sends us notice of disclaimer without making a formal application for closure of the relevant title or cancellation of an entry relating to the disclaimed estate or interest.

Provided the dissolved company named in the notice has the same name as the company registered as proprietor, or the solicitor  confirms that they are one and the same, and there is only one proprietor, we will make an entry as follows.

In the case of notice of disclaimer of a registered lease, profit a prendre in gross or charge:

“A notice dated [………] by [The Treasury Solicitor] [The Solicitor to the [Duchy of Lancaster or Cornwall] stated that the registered estate in this title] [registered charge dated […] referred to above] was being disclaimed under section [1013 of the Companies Act 2006][656 of the Companies Act 1985].

NOTE: Copy filed.”

We will make a similar note if the notice of disclaimer relates to a noted interest. In the case of notice of disclaimer of a freehold estate in land, please see section 8.5 Freehold estates in land.

No fee is payable. We will not serve notice on the company shown as registered proprietor and no entries will be made on any superior or inferior registered titles. It will be for any interested parties to make application in form AP1 accompanied by the appropriate fee for the closure of the disclaimed title, as explained in section 8.3 Application to close the registered title for a lease or profit a prendre in gross under r.79, LRR 2003.

8.3 Application to close the registered title for a lease or profit a prendre in gross under r.79, LRR 2003

The application must be made in form AP1 accompanied by:

• a certified copy of the notice of disclaimer by the appropriate solicitor unless there is a notification entry in the property register as in section 8.2 Notifying Land Registry of disclaimer without a formal application
• evidence that the company has been dissolved and that the lease or profit has passed as bona vacantia
• evidence of devolution of title if the company was not the original lessee or grantee
• the fee as prescribed under the current Fee Order.

We will deal with the application as explained in section 6.3.1 Application to enter notice of disclaimer and/or to close a registered leasehold title under r.79, LRR 2003, with any necessary modifications to the relevant entries to refer to the relevant solicitor and statutory provision.

8.4 Application to cancel notice of an unregistered lease or profit a prendre in gross

The application must be made in form CN1 accompanied by:

• the evidence as stated in section 8.3 Application to close the registered title for a lease or profit a prendre in gross under r.79, LRR 2003
• the original lease or grant (or an adequate explanation if it cannot be produced)
• the fee as prescribed under the current Fee Order.

We will deal with the application as explained in section 6.3.2 Application to cancel notice of an unregistered lease.

8.5 Disclaimer of freehold estates in land

If the relevant solicitor disclaims a freehold estate in land, it determines on escheat and reverts to the Crown as demesne land or to either the Duchy of Lancaster or the Duke of Cornwall. R.173, LRR 2003 provides that the registrar may make a note of the fact of determination of the freehold estate in the register. (It should be noted that r.173 does not apply to freehold profits a prendre or franchises.) Where the relevant solicitor sends us a copy of a notice of disclaimer of a freehold estate in land, a note will be made in the registered title of that estate. No application is necessary and no fee is payable.

It was held in the case of SCMLLA Properties Limited v Gesso Properties (BVI) Limited [1995] BCC 793 that upon a freehold estate in land escheating to the Crown, inferior interests such as tenancies and charges held under it do not determine.

Where there appear to be inferior interests that continue notwithstanding the disclaimer, notice will be served, so far as their addresses are ascertainable from the register, on the proprietors.
The entry made under r.173 will be in the following terms.

“The registered estate in this title has determined on disclaimer by  [The Treasury Solicitor][The Solicitor to the [Duchy of Lancaster][ Duke of Cornwall]] on –––––– pursuant to section [1013 of the Companies Act 2006] [656 of the Companies Act 1985].

Note: Copy disclaimer filed.”

By s.1013(2), CA 2006 the Crown may lose the ability to disclaim bona vacantia by express waiver, taking possession or any act clearly showing the intention to do so. If application was made to register the Treasury Solicitor, Solicitor to the Duchy of Lancaster or the Duke of Cornwall as proprietor, that could amount to such a waiver. Therefore if the vesting as bona vacantia has already been entered in the register, then the entry will be modified.

“[The Treasury Solicitor] [The Solicitor to the [Duchy of Lancaster[Duke of Cornwall]] gave notice that he disclaimed the registered estate on ––––– pursuant to section 1013 of the Companies Act 2006. The disclaimer was effective to determine the registered estate in this title only in so far as the right to disclaim had not been waived under section 1013(2) of that Act prior to that date.

Note: Copy notice filed.”

An entry will be made in the property register of any inferior registered title.

“(Date) The [lessor’s (or as the case may be)] registered estate has determined on disclaimer by [The Treasury Solicitor] [The Solicitor to the [Duchy of Lancaster or Duke of Cornwall] ]on ––––– pursuant to section [1013 of the Companies Act 2006] but the entries relating to the estate continue in the register.

Note: Copy disclaimer filed under ––––– .”

or

“(Date) [The Treasury Solicitor][The Solicitor to the [Duchy of Lancaster or Duke of Cornwall] gave notice that he disclaimed the [lessor’s (or as the case may be)] registered estate on ––––– pursuant to section 1013 of the Companies Act 2006. The disclaimer was effective to determine that registered estate in so far as the right to disclaim had not been waived under section 1013(2) of that Act prior to that date. The entries relating to that estate continue in the register.

Note: Copy notice filed under ––––– .”

If for any other reason there is doubt as to the efficacy of the disclaimer the registrar may make an appropriate entry in the register of the estate sought to be disclaimed and any inferior estate (r.173(2), LRR 2003). The wording of the entry will reflect the circumstances of the case.

8.6 Re-grant of a freehold estate on escheat 

You should apply to register the re-grant of a freehold estate following escheat using forms FR1 and DL. The grant or transfer by the Crown or Duchy will recite details of the escheat including the title number if the determined estate is registered.

Subject to the serving of notice on the registered proprietor of the determined estate, we will register the applicant as the proprietor of the new freehold estate and the title of the determined estate will close.

The new estate will be made subject to all the incumbrances that previously affected the determined estate, unless you are able to lodge evidence that they no longer affect, for example a court order, or evidence that they are unenforceable.

8.7 Restrictions in favour of dissolved companies

There are many leasehold developments where the registered leasehold titles to the flats or other units contain a restriction requiring the consent of a management company if a disposition by the proprietor is to be registered. It sometimes happens that such a company is struck off for failing to submit annual returns. Before dealing with the title, the registered proprietor will need to take action to ensure that the dealing may be registered.

8.7.1 Resurrection of the management company

Often the existence of the company is fundamental to the orderly management of the development. The most sensible course of action, in such a case, is for an application to be made to the court under s.1024, CA 2006, for the company to be restored to the Register of Companies. If, as is often the case, the proprietor was a member of the company they will be entitled to make the application. It may be that other lessees will be prepared to join in and share the costs since they will be faced with similar problems on their own titles.

8.7.2 Cancellation of the restriction

Where the restriction is no longer required and the proprietor can produce evidence to satisfy the registrar of this, they may apply to cancel the restriction.

This might be where the restriction was entered to protect an interest that no longer applies or to ensure compliance with obligations that have already been fulfilled. Alternatively, the proprietor may be able to show that the restriction was to protect an interest that is adequately protected by another entry in the register. The application must be made in form RX3 and be accompanied by evidence to satisfy the registrar that the restriction is no longer required²⁹. If the restriction relates to an interest that vested in the Crown on dissolution of the company, the application should be accompanied by evidence of the dissolution and may require the support of the Treasury Solicitor (or the Solicitor to the Duchy of Lancaster or Cornwall).

²⁹ R.97, LRR 2003.

8.7.3 Disapplication or modification of the restriction

In appropriate circumstances, the proprietor may be able to apply to the registrar for an order to disapply the effect of the restriction or to modify it³⁰.

³⁰ S.41(2), LRA 2002, r.96 LRR 2003.

The application must be made in form RX2 and must:

• state whether it is to disapply or modify the restriction (with details of any modification required)

• explain why the applicant has a sufficient interest in the restriction to make the application

• give details of the disposition or kind of disposition to be affected by the order applied for

• state why the applicant considers that the registrar should make the order.

Please note, the registrar is unlikely to consider the fact that a restriction is in favour of a company that has been struck off the Register of Companies as constituting sufficient grounds of itself for making an order.

8.7.4 Application to court

Where none of the above options are available, the proprietor may be able to apply to court for an order that the register be altered, perhaps by the cancellation of the restriction.

9 Liquidation of foreign companies

9.1 Overseas liquidation

The liquidation of a foreign company in its country of incorporation is recognised by English law. If you wish to make an application to register a disposition made by or on behalf of such a company then your application must be made in form AP1, and be accompanied by appropriate evidence of the liquidation and of its effect. This might include:

• certified copies of the court orders or other documents relied upon

• the written opinion of a lawyer qualified to practice company law in the country of incorporation as to the nature and effect of the proceedings on the company and as to the powers of the liquidator or other person representing the company, including the power to execute documents on behalf of the company.

Certified translations should be supplied of any documents not in English or Welsh.

9.2 Liquidation in the United Kingdom

A foreign company that has been carrying on business in the United Kingdom may be wound up as an unregistered company under the IA 1986 even though it may already have been dissolved, or otherwise ceased to exist, under the law of its country of incorporation³¹. The winding up will be by order of the court and we will require the evidence as mentioned in section 3.5 Liquidation by order of the court.

³¹ S.225, IA.

10 Enquiries and comments

If you have a particular concern that is not covered by this guide, please contact Customer Support in advance of the transaction – see Contact details. If the transaction is particularly complex, it may be better if you make your enquiry in writing at the Land Registry office that will process your application.

If you have any comments or suggestions about our guides, please send them to:

Central Operations Group
Land Registry
Trafalgar House
1 Bedford Park
Croydon
CR0 2AQ

(DX 8888 Croydon 3)

You can obtain further copies of this and all our guides free from Customer Support or you can download them from our website in English and Welsh at www.landregistry.gov.uk

Remember

• Have you supplied the relevant evidence of liquidation?

• If a restriction is required, have you enclosed form RX1?

• For disclaimers, have you enclosed the notice or evidence of disclaimer?

• Have you enclosed the correct fee (see the Fee Order)?

• Have you used form AP1?

• Important: please check clerical details in all forms and deeds (especially charges and mortgages) and pay particular attention to all dates, property descriptions, title numbers and full names of parties, especially where they appear in more than one deed.

Please note that Land Registry may be unable to process applications that are incomplete or defective and your application will risk losing its priority if we have to return it to you – see Practice Guide 49 – Return and rejection of applications for registration for more information.