The revival of companies : a comparative approach

Abstract

When a company is registered on the register of companies this is akin to the birth of a physical person. When it is struck off the register, this is the corporate equivalent of death. However, ‘death’ is not always the end of the road for a company. Articles 300A, 300B and 325(4) of the Companies Act, provide for resurrection of a company which has been struck off the register. These are powerful clauses, seeking to protect those persons who have a vested interest in a company, which no longer exists at law. It may be necessary or desirable to revive a ‘deceased’ company if the company was struck off by the Registrar who believed it to be defunct yet it has continued to trade or when a company has been put to rest along with an asset or title only discovered postliquidation and striking off. Moreover, those creditors who have unfinished business with a struck off company may wish to bring a legal action against it but cannot do so unless that company is returned to a state of existence by the court. The author shall touch upon Article 300A as it does not deal with a full revival per se and a detailed analysis of Article 300B and Article 325(4) shall follow. A comparative analysis mainly focusing on two countries shall be given to conclude whether any amendments to local legislation are necessary. Subsequently, a short overview of the court’s duty to strike a balance between the applicant’s interest and that of the defendant Registrar as well as the public interest at large will be given. The author shall also delve into the lacuna in the articles of the Companies Act dealing with revival as they only mention companies; posing the question whether other commercial partnerships have been purposely excluded from the revival provisions.