A Guide to Reinstating a Deregistered Company

In the realm of corporate law, a registered company possesses a distinct legal personality. This endows it with the ability to own property, engage in business activities, and participate in legal proceedings.

Conversely, a company can also face deregistration, a process that strips it of its legal identity and expels it from the Australian Securities and Investment Commission (ASIC) register.
In this blog post, we will delve into the process of reinstating a deregistered company.

Several circumstances can lead to a company’s deregistration, we outline the scenarios that result in an entity being de-registered.

  • Voluntary Deregistration: Companies can voluntarily apply for deregistration, but certain prerequisites must be met. These include unanimous agreement among all members for deregistration, the cessation of trading activities, company assets valued at less than $1,000, and the absence of outstanding debts or legal proceedings.
  • Deregistration of a Solvent Company: A solvent company not meeting the criteria for voluntary deregistration may still deregister by winding up the company.
  • Deregistration of an Insolvent Company: In the case of an insolvent company, voluntary administration or liquidation may be necessary to facilitate deregistration.
  • ASIC initiated deregistration: When a company ceases trading or accumulates unpaid fees and penalties, ASIC may initiate the deregistration process.

Following the deregistration of a company, the following would typically apply:

  • it ceases to exist as a legal entity and can no longer do anything in its own right
  • property the company owned (other than trust property) vests in ASIC
  • property held by the company on trust vests in the Commonwealth (represented by ASIC)
  • the former officeholders no longer have the right to deal with property registered in the company’s name
  • any legal proceedings in which the company is a party cannot be continued (in so far as they relate to the deregistered company)
  • you cannot start legal proceedings against the company.

Deregistered company property vests in ASIC or the Commonwealth and ASIC is generally the only party legally able to deal with company property after deregistration. However, there are some exceptions, e.g. secured parties and Land Titles Office Registrars (who have various powers in relation to land dealings under State/Territory Legislation) can deal with the company’s property despite deregistration.

Where deregistration is ASIC initiated, the problems are compounded for scenarios where the Company being deregistered acts as Trustee. In particular, where the company acts as a Superannuation Trustee company, the related Superannuation Fund would be deemed to be non-compliant, and its assets exposed in accordance with non-compliant provisions.

For a company that is no longer actively trading, deregistration is often the most prudent course of action. This is because deregistration effectively relieves the directors and officeholders of their obligations.

Reinstating a company effectively returns it to its pre-deregistration state. There are two primary methods for reinstating a company, via Application to ASIC; or Application to a Court.

If you are a company director, secretary, or member, certain conditions must be met to qualify for reinstating a company:

  • You must have held one of these positions at the time of the company’s deregistration.
  • You must not be disqualified from managing corporations.
  • You must provide evidence that the company could settle its debts if reinstated.

In certain cases, you might need to present evidence explaining why the company should not have been deregistered initially. For example, if voluntary deregistration was sought, you might need to demonstrate inaccuracies in the declaration. Conversely, if ASIC initiated the deregistration, you must prove that it was a mistake.

For third parties seeking to reinstate a company, you must have initiated legal proceedings against the company before its deregistration and possess sufficient evidence to support your claim.

Reinstatement of your de-registered company is possible under certain circumstances for:

  1. Former directors, secretaries, or members of the company.
  2. Third parties who initiated legal proceedings against the company before deregistration.
  3. Those aggrieved by the company’s deregistration.

Contact Prime Company Compliance for assistance with your Application to ASIC for Reinstatement.

Our Corporate Compliance Officers will assist with checking the availability of your company’s name and preparation of the required ASIC forms.

In the event you cannot meet the reinstatement criteria or ASIC has rejected your application, individuals aggrieved by a company’s deregistration or former liquidators can seek court intervention to order ASIC to reinstate the company.

Contact Prime to learn more or get assistance for the reinstatement of your deregistered company.