Corporate life after death – Reinstating a company and how to do it
Companies are in some ways like individuals, they are born, they thrive for a time and then they die. Whilst alive, a company can own property, borrow money, open a bank account, enter into a contract, and sue or be sued. However, in order to sue a company, or for a company to commence legal action, it must be registered.
A company may be deregistered for various reasons. It may be voluntary by the members (shareholders) of a company, it may follow a company winding up, or it may be initiated by ASIC if, among other things, they believe that the company is no longer carrying on a business. Upon deregistration of a company, it ceases to exist and the company’s property vests in ASIC.
There may be reasons to sue a deregistered company, it may be to pursue a claim under a contract (typically an insurance policy) or to pursue assets held by the company.
Unlike an individual, a company can be brought back to life. An application can be made to the Court to have the company reinstated. If satisfied that it is just to do so, the Court may make an order that ASIC reinstate the company’s registration.
Once reinstated, the company exists as if it had not been deregistered and any company property held by ASIC revests in the company. Legal proceedings can then be commenced against or by the company. If proceedings have been commenced against a deregistered company prior to checking its registration status, the Court may make an order that the company be reinstated and that the proceeding (already brought) be commenced from that point.
If you have any queries about corporate insolvency or if you ever need to bring a company back from the dead, speak to our litigation team.
