Bringing forward a dissolution

Published on
2 min read

In a rare case, the court has allowed an appeal against a decision of the Secretary of State under Section 205(3) Insolvency Act 1986 to defer the dissolution of a company.

The company concerned provided border management services to the government but, following Brexit, it lost it's backers and was wound up on 31 January 2018.

The sole director co-operated with the Official Receiver and on 2 November 2020, a notice under section 205(1)(b) Insolvency Act 1986 was filed confirming that the winding up was complete. Ordinarily this would mean that the company would be dissolved after three months, but on the same day, the Secretary of State also deferred the dissolution to 13 May 2025 under section 205(3). 

This was purely an administrative step taken in line with internal guidance which recommended a deferral of 5–6 years in any case in which more time was required to consider possible disqualification or civil recovery proceedings. The same individual signed both notices. The director was not involved nor aware of this at the time. 

He subsequently received confirmation in March 2021 that all investigations were complete, and no disqualification proceedings were proposed and he sought to have the dissolution brought forward. The Official Receiver confirmed that dissolution could not be brought forward without the assistance of the court (which it would not oppose).

The court observed that there was no case law on bringing forward a dissolution, but it was content to order that here given the deferral served no purpose at all. The power to do so existed under section 205(4) which allowed an appeal to the decision to defer dissolution.

In Re Border Control Solutions Ltd [2021] EWHC 2965 (Ch)

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