How do company assets become bona vacantia?
Under the Companies Act 2006, when a company is dissolved - due to being struck off by the Registrar of Companies for failure to comply with its legal obligations, or following a formal liquidation - its property, cash and other assets automatically pass to the Crown (or the Duchies of Cornwall or Lancaster if the company's registered office is in Cornwall or Lancashire). The Bona Vacantia Division of the Government Legal Department (BVD) is responsible for collecting these assets.
What assets can be bona vacantia?
Most types of assets can become bona vacantia including:
property and land in England and Wales
cash held in bank accounts and elsewhere
intellectual property (eg copyrights, trade marks and patents
shares held in another company that is still active
other contractual rights held by the company
It should be noted that the liabilities and debts of a dissolved company do not become bona vacantia. These are generally extinguished.
What is the role of jurisdiction in bona vacantia?
The relevant body for dealing with the assets of dissolved companies will be determined by (i) the last registered office address and (ii) where the assets are situated:
England and Wales - Bona Vacantia division of the Government Legal Department (except where (i) and (ii) are Duchies of Cornwall or Lancaster)
Duchies of Cornwall or Lancaster - Duchies' solicitors
Scotland - Kings’ and Lord Treasurer's Remembrancer (KLTR)
Northern Ireland - Crown Solicitor of Northern Ireland
In the case where the last registered office and the asset are in different jurisdictions, the location of the last registered office will take precedence.
The BVD does not normally deal with foreign assets. However, it may deal with assets based in the UK which are owned by foreign companies.
How can bona vacantia be avoided?
Company directors and shareholders are responsible for transferring or disposing of company assets before it is dissolved. Doing so effectively will avoid bona vacantia.
Once assets have been classed as bona vacantia, they may be reclaimed by restoring the company or buying them back from the BVD for an 'open market' value.
Personal estates and bona vacantia
It is also possible for personal estates to be classed as bona vacantia and pass to the Crown. This generally happens where there is no will (ie a person dies intestate) and no obvious heirs. It is possible for certain relatives to make a claim on an estate that will otherwise pass to the Crown. For more information, see the Government’s guidance on personal estates and bona vacantia.
Bona vacantia in Scotland
In Scotland, ownerless goods fall to the Crown, whose representative is the KLTR. The expression ‘bona vacantia’ is applied to things such as the assets of dissolved companies, the assets of missing persons and lost or abandoned property. If the value of these assets is realised (ie they are sold), the proceeds are paid into the Scottish Consolidated Fund for use by the Scottish Government on behalf of the people of Scotland.
For a current list of unclaimed advertised estates fallen to the Crown in Scotland, see the Scottish Government’s guidance on ownerless goods.
Assets of dissolved companies in Scotland
When a company is dissolved, but at the date of dissolution continues to own assets, these assets fall to the KLTR. The KLTR has 3 years from the date on which they discover they own the assets (ie when they are approached by someone to buy an asset) to disclaim them.
The KLTR has no liability for any of the outstanding debts of the company at the date of dissolution. If the asset is heritable property (land or a building in Scotland), the KLTR takes ownership subject to any fixed charge that may exist over it.