Property of Dissolved Companies
Vesting of property
Section 274 of the Companies Act 1931 and section 193 of the Companies Act 2006 provide that any property belonging to a dissolved company which was incorporated under the respective Act shall be deemed to be bona vacantia and shall accordingly vest in the Treasury in trust for the Crown.
Where the asset/property of a dissolved Manx company is situated outside the Isle of Man, whether the Treasury does have an interest in it will depend on whether alternative provision is made by the laws of the jurisdiction concerned.
In the case of assets/property situated in the other domestic jurisdictions of the British Isles (e.g. the United Kingdom and the Channel Islands), the accepted position is that the common law operates to trump any bona vacantia provisions under the “home” jurisdiction’s legislation.
Thus, an interest held by a Manx company prior to its dissolution in land in England or Wales, will usually vest bona vacantia in the Treasury Solicitor (unless the land in question is located in the Duchies of Lancaster or Cornwall) in trust for the Crown and enquiry should be made, in the first instance, of the Bona Vacantia Division of the Government Legal Department
In the case of property located in Scotland, it vests bona vacantia in the Queen's and Lord Treasurer's Remembrancer and, in Northern Ireland, in the Crown Solicitor, and enquiry should be made, in the first instance, of the relevant body. Contact details for enquiries in relation to property located in Scotland, Northern Ireland or the Duchies of Cornwall or Lancaster are available.
In the case of property located in the Channel Islands, enquiries should be made, in the first instance, of HM Receiver General in Jersey by email or HM Receiver General in Guernsey by email as appropriate.
In the case of property in the Isle of Man belonging to a dissolved foreign company (ie one which was incorporated elsewhere than in the Isle of Man) the Treasury may deal with it. Decisions will be made on a case by case basis, depending on whether the law of the jurisdiction in which the company was incorporated makes any provision which would mean that the property would not be deemed to be bona vacantia in the Island through the operation of the common law.
Asset disposal and disclaimer
The Treasury does not have to deal with a bona vacantia asset in any particular way. Normally it will be disclaimed or sold for full market value.
If the Treasury disclaims an asset it means that it is treated as never having passed to the Crown as bona vacantia.
The Treasury will usually disclaim onerous property, example of which may include:
- land used in common, such as private roads, service yards, amenity land or the common parts of an estate or block of flats,
- property subject to onerous covenants or other potential liabilities,
- property which is contaminated or has buildings, trees, or other items which are in a dangerous state and condition,
- property in negative equity,
- property subject to a dispute or competing claims,
- low value property and
- commercial leases.
Restoration of a dissolved company
It may be possible to restore the company. If this happens, the company comes back to life, bona vacantia no longer exists and the asset belongs to the company again. However, if while the company has been dissolved the Treasury has disposed of the asset, the company will not be entitled to receive the asset back but the Treasury will pay to the company whatever consideration it received from the sale, less any costs it had in dealing with the asset.
If a company can be restored then the Treasury will generally expect that mechanism to be followed. However, this does not prevent the Treasury from disclaiming the property or making a discretionary grant in cases where it considers that it is reasonable for it to do so as an alternative to the restoration of the company.
