What Happens to Property Owned By
a Dissolved Company in the UK?
Farida Hashim
Trainee Solicitor
When a company in the UK is dissolved, whether voluntarily by its members, struck off the Companies Register by Companies House, or as a result of liquidation, one major concern arises: what happens to its assets, particularly property registered under its name with HM Land Registry?
This article explores what occurs to property and other assets held by a dissolved company, the legal mechanism known as bona vacantia, and how such issues can be avoided or remedied. Whether you are a company director preparing to wind down operations or someone interested in a disclaimed asset, this guide provides a snapshot overview.
If you are considering dissolving your company or otherwise need help with managing your company’s assets, we are ready to assist you along the way. Please find more information on how to contact us here.
The Nature of Dissolution
Company dissolution means the company ceases to exist as a legal entity. It can no longer carry out business, hold bank accounts, or own property. There are typically three common paths that lead to dissolution:
- Voluntary Strike Off: where directors choose to dissolve the company if it is no longer needed.
- Compulsory Strike Off: where Companies House removes the company due to non-compliance (e.g., failure to file accounts or confirmation statements).
- Liquidation: where a company becomes insolvent and is wound up through formal processes, usually overseen by a liquidator.
Regardless of the method, once the company is removed from the register, its assets no longer belong to it. The principle here is simple: a non-existent legal entity cannot own property.
What Is Bona Vacantia?
When a company is dissolved, its property automatically passes to the Crown. This happens under the legal concept of bona vacantia, which means “ownerless goods.” The Crown becomes the default owner of any remaining property, assets, rights, or interests formerly held by the company.
These assets might include:
- Freehold or leasehold property
- Cash in bank accounts
- Shares or intellectual property
Importantly, bona vacantia is automatic. There’s no court hearing or formal transfer needed. Instead, it simply occurs by operation of law the moment the company is dissolved.
Who Handles Bona Vacantia Assets?
The body that manages bona vacantia property depends on the last registered office of the company and the location of the asset.
In England and Wales, most bona vacantia assets are dealt with by the Bona Vacantia Division (BVD) of the Government Legal Department. If the asset is located in the Duchy of Lancaster or the Duchy of Cornwall, the respective Duchy takes responsibility.
Note that if a foreign company owns property in England or Wales, the BVD may still be responsible for it, provided the property is located within its jurisdiction. Conversely, the BVD will not manage assets located outside England or Wales, even if the dissolved company was based there.
What Does the Crown Do with the Property?
Once property becomes bona vacantia, the Crown is under no obligation to retain, preserve, or manage it in any particular way. In practice, the Crown typically chooses one of two routes:
- Sell the asset at full market value. This could be to an unrelated third party, a former director or shareholder of the dissolved company, or even the current occupier, if applicable. The proceeds belong to the Crown, not to any former company stakeholders.
- Disclaim the asset. The Crown may choose to reject its interest in the asset. This often happens when the property is “onerous” (e.g., leasehold land with ongoing liabilities like rent or service charges). The disclaimer has the effect of removing the Crown from the chain of title.
If a disclaimer occurs, the property doesn’t revert to any prior owner.
Avoiding Bona Vacantia
For directors planning to voluntarily dissolve a company, it is recommended that all assets be transferred, sold, or otherwise dealt with before applying for strike off. Once the company is dissolved, the directors have no authority to manage the assets, and the process to retrieve them becomes more complex and costly.
The directors and shareholders must ensure that there are no residual assets when the company is dissolved. Even if the asset appears to be of little value (e.g., a dormant freehold), it should still be formally addressed before dissolution.
What If the Company Is in Liquidation?
If the company is insolvent and undergoing compulsory or voluntary liquidation, the liquidator or Official Receiver is responsible for selling off assets to repay creditors. Only after this process is complete and the company is dissolved do any remaining unsold assets become bona vacantia.
This means that creditors have a better chance of recovering debts during liquidation, as assets are first applied toward debts before they pass to the Crown.
Can a Dissolved Company Be Restored?
In some circumstances, a company can be restored to the Companies Register, effectively reviving it as if it had never been dissolved. Once restored, any assets that became bona vacantia are revested in the company.
However, there is a major caveat: if the Crown has already sold the asset, the company cannot get it back. Instead, it may be entitled to the proceeds of the sale, minus any costs incurred by the Crown. This is a poor substitute for a property that may have appreciated significantly in value or had strategic importance.
Can You Acquire Bona Vacantia Property?
If you’re interested in acquiring property that has fallen to the Crown, you may be able to buy it from the BVD.
If the asset has been disclaimed, it might be available to the freeholder, mortgage lender, or others with an interest, subject to legal advice.
Due diligence is essential. Disclaimed assets often carry complications, especially leasehold interests or land subject to environmental or financial liabilities. Legal advice is highly recommended before proceeding with such acquisitions.
Final Thoughts
Dissolving a company in the UK is not simply a matter of closing the doors and walking away. Especially when real estate or other valuable assets are involved, proper planning and legal advice can mean the difference between orderly closure and the unintended loss of significant property.
Key takeaways:
- Dissolved companies cannot own assets. Everything they owned becomes bona vacantia.
- Property typically passes to the Crown unless proactively sold or transferred before dissolution.
- Assets may be reclaimed, but restoration can be complex, time-limited, and costly.
- Disclaimed property creates legal uncertainty and should be handled carefully.
If you’re considering dissolving your company, or you’ve discovered that an asset you’re interested in has become bona vacantia, we strongly recommend speaking with a solicitor or corporate legal advisor. Understanding your rights and obligations can save you time, money, and unnecessary stress.
Need help with company dissolution or asset recovery? Contact us here for expert guidance tailored to your situation.
