How are assets dealt with in a liquidation and in a dissolution for a corporation?


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Charlotte St. Aubyn Profile
When a company is dissolved, by law, its assets, but not its liabilities, pass to the control of the Crown. The Treasury Solicitor represents the Crown in dealing with the collection of assets from dissolved companies. These assets are known as ownerless property, or 'bona vacantia'. The Treasury Solicitor has the right to sell such properties.

However, if you owned a company that was dissolved, you could potentially recover assets from it that have become bona vacantia. A company is dissolved when its existence is terminated either by being struck off the Companies Register, or by being wound up by a liquidator and dissolved.

Before a company is dissolved, its members should ensure that any assets owned by the company are dealt with and transferred out of the company's ownership. If this is not done, all remaining assets, but not the liabilities, at the date of dissolution will pass into the ownership of the Crown (under Section 654 of the Companies Act 1985 or Section 1012 of the Companies Act 2006) as ownerless property or 'bona vacantia'.

The assets of a dissolved company that the Treasury Solicitor will take responsibility for include cash balances, freehold and leasehold property, share capital, intellectual property, including trademarks and copyrights and mortgages.

The Treasury Solicitor has the power to disclaim, i.e. Give up the rights to the assets of a dissolved company. As a matter of policy, the Treasury Solicitor will disclaim onerous property, such as commercial leases at a rack rent any land used in common, for example private roads, amenity land, or common parts of an estate or flats and contaminated property.

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