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The law treats a registered company as its own legal personality. This means that a registered company can own property, operate a business and be a party to legal proceedings. Likewise, a company can also be deregistered, meaning it is stripped of its legal personality and is removed from the Australian Security and Investment Commission (ASIC) register. This article will take you through how to reinstate a deregistered company. 

Consequences of Deregistration

Once a company is deregistered, it loses its legal personality and can no longer trade. Accordingly, the company’s directors can no longer make decisions concerning the company or its property as the company ceases to exist. 

Consequently, legal proceedings involving the company will discontinue, and new proceedings cannot commence. In most cases, any property owned by the company will be vested in ASIC.

If a company is no longer trading, deregistering the company is the most appropriate course of action. This is because deregistering it will cease the obligations of the directors and officeholders.

How Companies Become Deregistered

There are certain circumstances in which companies will become deregistered. The table below outlines some of these circumstances and the relevant criteria.

Voluntary deregistration 

It is possible for a company to deregister voluntarily. However, your company must meet certain requirements to be eligible for this. Indeed, ensure that:

  • all members agree to the deregistration; 
  • the company is no longer trading;
  • company assets are worth less than $1,000; and 
  • the company has no outstanding debts or legal proceedings.

Deregistration of a solvent company

A solvent company that does not meet the relevant criteria for voluntary deregistration may still deregister by winding up the company.

Deregistration of an insolvent company

An insolvent company will need to consider voluntary administration or liquidation to deregister.

Deregistration initiated by ASIC

Where a company ceases trading or owes outstanding fees and penalties, ASIC may deregister a company.

How to Reinstate a Deregistered Company

When you reinstate your company, it will return to the state it was before the deregistration process. Indeed, there are two ways that you can reinstate a company. This includes by either:

  1. application to ASIC; or
  2. application to a court.

Each of these reinstatement methods has its own eligibility criteria. 

Who Can Apply to ASIC for Reinstatement

If you are a company director, secretary or member, there are certain circumstances under which you can reinstate a company. Additionally, you must:

  • have been a director, secretary or member of the company at the time the company deregistered; 
  • not be disqualified from managing corporations; and
  • provide evidence that the company would be able to pay its debts if reinstated.

In certain circumstances, you may also need to provide evidence as to why the company should not have been deregistered in the first place.

For example, if you applied for voluntary registration, you will need to demonstrate that the declaration made was incorrect. On the other hand, if your company was deregistered on ASIC initiation, you will need to prove that this was done by error.

Alternatively, suppose you are a third party wishing to reinstate a company. In that case, you must have commenced legal proceedings against the company before its deregistration and be able to provide sufficient evidence of this.

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How to Apply to ASIC for Reinstatement

If you are applying to ASIC for reinstatement as a company director, secretary or member, there are certain steps you must take.

1. Check the Company Name Is Still Available

First, you must use ASIC’s name availability search to ensure your company name is still available. If it is still available, you can lodge a Form 410 to reserve your name for two months while you undertake the reinstatement process.

If the company name is no longer available, the company will be reinstated as its original name, followed by its Australian Company Number (ACN).

2. Complete the Relevant Forms 

Next, you will need to prepare to reinstate the company by completing the relevant forms and paying the correct fees.

Likewise, you can send ASIC an enquiry requesting a detailed estimate of the fees you will need to pay. In preparation for this, you can calculate the costs to reinstate the company using ASIC’s reinstatement calculator. Further, once you submit your enquiry, ASIC will send you the fee statement and Form 581. Importantly, you to complete this form to reinstate the company.

On the other hand, if you are applying for company reinstatement as a third party, you will only need to check the company name is still available and complete the Form 581. Along with the Form 581, you must provide supporting evidence of your claim to reinstatement and payment of the reinstatement fee.

Currently, this fee is $42.

Applying to the Court for Reinstatement

Additioanlly, a person who is aggrieved by a company’s deregistration can apply to the court to order ASIC to reinstate the company. Similarly, a former liquidator can apply to deregister a company. This is an appropriate option only where you cannot meet the reinstatement criteria or ASIC has refused your reinstatement application.

Key Takeaways

A deregistered company is stripped of its legal personality and removed from the ASIC register of companies. You can apply to reinstate a company in certain circumstances if you are:

  • a former director, secretary or member of the company;
  • a third party who commenced legal proceedings against the company prior to its deregistration; or
  • aggrieved by the company’s deregistration.

If you need help with reinstating a deregistered company, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions

What is a deregistered company?

A deregistered company is stripped of its legal personality and removed from the ASIC register of companies. Once you deregister your company, it loses its legal personality and can no longer trade. This means that the company’s directors can no longer make decisions with respect to the company as its property, as the company ceases to exist.

How can I restore a deregistered company?

You can apply to reinstate a company in certain circumstances. First, you must check if the company name is still available. Next, if your name is available, you need to complete the relevant forms and provide any supporting evidence. Finally, you must pay any applicable fees.

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