There are two ways to reinstate a deregistered company. You can apply to:
- the Australian Securities and Investments Commission (ASIC) to reverse your company’s deregistration; or
- the court to order ASIC to reinstate your company.
This article outlines the two ways to reinstate a deregistered company and how to navigate each process.
What Happens When You Reinstate a Deregistered Company?
Upon deregistration, a company ceases to exist as a legal entity. Reinstating a company returns it to its original status as a registered company. Accordingly, it once again becomes subject to the requirements of the Corporations Act 2001 (Cth). Upon reinstatement, any directors of a company immediately before the deregistration become directors again. Further, any property vested in the Commonwealth or ASIC revests in the company at the time of reinstatement. However, if at the time of deregistration the company was in liquidation, it will typically continue in liquidation upon reinstatement.
Apply to ASIC for Reinstatement
ASIC may reinstate a company if there was an error in initially deregistering the company. Either a director, secretary or member of the company at the time of deregistration may apply to reinstate a company. A third party may also apply to reinstate a deregistered company if they started legal proceedings against the company before its deregistration. For example, a liquidator may apply for reinstatement. Additionally, if a company had outstanding debts payable to an aggrieved party at the time of deregistration, the third party can also apply for reinstatement.
ASIC may reinstate a company’s registration where:
- there was a procedural error or oversight in the procedure that consequently led to ASIC initiating deregistration;
- all members did not agree to the voluntary deregistration of the company; or
- at the time of voluntary deregistration, the company:
- had assets of more than $1,000;
- had outstanding liabilities;
- was carrying on a business; or
- had legal proceedings underway.
To apply to ASIC for a company’s reinstatement, you should complete the following steps:
- lodge a form 581 application for ASIC reinstatement;
- enclose with the application:
- reasons and supporting documentation for why deregistration should not have taken place; and
- evidence that the directors are aware of the application;
- pay the reinstatement application fee to ASIC; and
- pay any money owing to ASIC at the time of deregistration, including:
- any outstanding penalties or legal costs a court orders you to pay to ASIC by the company; and
- annual review fees since the date of deregistration.
Court Ordered Reinstatement
ASIC does not ordinarily reinstate a company if it was wound up before deregistration or if no directors want to be reinstated. In such circumstances, you can apply to the court for the reinstatement of the company. In deciding whether to reinstate a deregistered company, the court may consider:
- the circumstances of the dissolution of the company;
- whether good use could be made of the order, if granted i.e. whether reinstating the company would be beneficial;
- whether any person was likely to be prejudiced by the reinstatement; and
- the public interest.
Your application should include the grounds for the reinstatement of the company and material supporting the grounds. You should also include any information that proves the company will be solvent if reinstatement occurs. Further, your application should include evidence that all directors at the time of deregistration of the company are aware of the application and in the event of a successful reinstatement, their roles as officeholders will continue.
If the court orders ASIC to reinstate the company, you must provide ASIC with a copy of the order to arrange the reinstatement. Consequently, ASIC will publish a notice of the reinstatement.
Depending on the circumstances of deregistration, you may be able to reinstate your company. You can do so in two ways:
- by applying for reinstatement through ASIC; or
- by applying to the court to order ASIC to reinstate the company.
If you have any questions or need assistance with reinstating your company, get in touch with one of LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.
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