Why the Crown owns Pink Floyd legend’s house—and proves the need for good company secretarial support

Originally purchased through his former company, that company was then struck off but ownership was not transferred - leading to it becoming 'vacant goods', and the property of the Crown. In this article, legal assistant Oliver Ward explores this phenomenon, outlining how a strike off should be approached and the potential pitfalls. 

A company can apply to be struck from the Register of Companies through a voluntary strike off procedure. A company may make that application for a number of reasons, but generally if its business has run its course; it is a cheap way of getting rid of the company.

The Registrar of Companies also has the power to strike off a company which it believes is not carrying on a business or in operation. The Registrar of Companies will send a notice to the company asking whether it is carrying on a business. If it does not receive a reply within 14 days from the company, a second notice will be sent and then notice will be published in the Gazette to strike off the company. If no response is received, the company will be struck off from the register.

Due care and consideration is required before deciding to voluntarily strike a company from the register. The same applies for deciding to actively not to respond to the notices received by the Registrar of Companies. 

A key focus is ensuring that all the company’s assets have been dealt with in the appropriate manner prior to the strike-off.  If the company still has assets at the time of strike off, a future desire to deal with these assets can prove problematic and costly.

Pink Floyd legend Dave Gilmour has experienced the pitfalls of a company being struck off which still has assets. When attempting to sell his £10 million mansion, Gilmour discovered that he does not actually legally own his house. The mansion in East Sussex was purchased in 2011 by Gilmour through his former company Hoveco Ltd, a company of which Gilmour was the sole director. On the 14th October 2014, the company was struck off from the register.

At the time of strike off, the title to the mansion had not been transferred from Hoveco Ltd to the Pink Floyd star due to a mere administration oversight. Therefore, the legal title to the asset remained owned by Hoveco Ltd at the critical moment, and is therefore now owned by the Crown.

Assets remaining in a company at the point it is struck off automatically pass to the Crown under the legal doctrine of “Bona Vacantia” (property without owner). For companies which were registered in England and Wales, the assets are either dealt with by the Duchy of Lancaster, the Duchy of Cornwall or the Treasury Solicitor, depending on the location of the company’s registered office before dissolution. 

Gilmour discovered that the title to the property does not belong to him but instead to the Crown – despite him having the property for years. Following the revelation, Gilmour has been unable to sell the property and has had to turn to bringing a claim in the High Court.

A director or shareholder of a company struck off from the register can apply to the Registrar of Companies to restore the company to the register provided that the company was trading at the time it was struck off and the application for restoration is made within 6 years of strike off. Once the company is restored to the register, the asset is once again owned by the company and can be dealt with appropriately – provided that the Duchies have not already disposed of the asset.

However, this option is not available for a company which has been voluntary struck off from the register – it is only available when the registrar of companies has struck the company off under section 1000 or 1001 of the CA 06. Still, this option was not available to Gilmour – although the company was struck off through compulsory strike off, the 6-year period had elapsed.

A former director or shareholder can apply to purchase the asset from the Duchies. This does not restore the company to the register but merely allows the shareholder to purchase the asset for open market value. It is worth noting that the Duchies have discretion how to dispose of an asset and will do so in the most cost-effective manner. Purchasing the asset from the Duchies can prove costly; the applier is required to pay the legal fees, but also to pay market value for the asset.

Finally, a court order to restore the company can be made. As well as making a formal application, you will need to make a witness statement, and provide accounting information and proof that you have spoken to the Duchies. With luck, and providing that the Duchies have not already disposed of the asset, at the time of restoration the company will hold the asset and it can then be dealt with appropriately. Evidently, this can be a costly and extensive process, sometimes taking a year from start to finish.

Thus, the assets of a company must all be dealt with appropriately prior to the dissolution of the company. Failure to do so can prove burdensome and can be a timely as well as costly oversight. The process to deal with assets following a company’s strike off is not straightforward.