Register Remedy – The Court and the Companies Act

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The High Court has recently passed a rare order, rectifying a company’s register of members under section 125 of the Companies Act 2006 – before grant of probate was attained.

In the case of Kings Court Trust Ltd and others v Lancashire Cleaning Services Limited, the sole member and director of the company in question passed away, leaving the company without any official surviving officer.

Despite the shares of the deceased being passed on by transmission, the company’s articles did not allow the executors of the will to enter their names on the company register, or appoint a new director. The company was without any person able to make decisions or act on its behalf, and the court held that waiting for probate to be granted would therefore not be right in this instance.

It is already held within the Companies Act 2006 that the court is within its rights and power to decide upon any issues as seen in this case, as is necessary to keep the company operational and in business. The circumstances were deemed exceptional – the company bank account had been frozen. Without intervention funds could not be drawn, and employees would go unpaid.

By removing the name of the deceased and entering the names of the executors on the register, the court made it possible for them to pass a written resolution, and successfully appoint a new director to manage the company.

Sole shareholder-directors are advised to make sure their company’s articles are well equipped with provisions against circumstances such as these, or altered to ensure continuation of business after their death. If you require any advice or assistance on the articles of your company, or on any other corporate matters, please do not hesitate to contact Nick Pickup via nick.pickup@forbessolicitors.co.uk or on 0333 207 1132.

Nick Pickup

About Nick Pickup

Nick Pickup is a Solicitor within the Corporate and Restructuring team at Forbes Solicitors. Nick’s blogs cover his specialism of work on mergers and acquisitions, business start up’s, joint ventures, shareholder issues, company restructures and general company advice.
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