A & Anor v The Registrar of Companies

This appeal concerned an application under section 1029 Companies Act 2006 (as applied to LLPs by the LLPs (Application of Companies Act 2006) Regulations 2009, Reg. 57) to restore Prudencia LLP to the register so that a liquidator could be appointed to pursue alleged misrepresentation claims arising from a 2012 settlement. The judge below dismissed the application on the basis that no member of the LLP remained in existence and so restoration would serve no purpose.

The Court of Appeal allowed the appeal. It held that (i) a former member falls within the class of persons who may apply under s.1029(2)(g) and there is no temporal limitation in that provision; (ii) the court has a wide discretion under ss.1031 and 1032 to order restoration and to give such directions as are just so as to place the LLP and other persons as nearly as may be in the pre-dissolution position; and (iii) on the evidence before the court there was a plausible case that beneficial ownership and Cypriot law effects (transfer by universal succession and vesting of contingent rights in the beneficial owner) meant that the appellant A had a substantive interest capable of being protected by restoration and appropriate directions. Accordingly the LLP was to be restored and directions given to enable A to liaise with a liquidator, with publication of the judgment anonymised for a limited period.

Background and parties:

• The appellants, A and B, sought to overturn a district judge's order refusing restoration of Prudencia LLP, which had been dissolved on 7 March 2017 following a members' voluntary liquidation. The application below was made under s.1029 Companies Act 2006 as applied to LLPs by Reg. 57 of the 2009 Regulations.
• A and B asserted that restoration was necessary so the LLP could pursue misrepresentation claims arising from a settlement agreement entered into in late 2012; they wished a liquidator to be appointed to pursue recoveries.

Procedural posture:

• The order refusing restoration was made by District Judge Hart in the County Court at Central London. By leave of that judge the appellants appealed to the High Court (Chancery Appeals), which handed down judgment on 20 December 2024.

Issues framed:

• Whether the appellants had standing to apply under s.1029(2) as persons interested in the LLP's restoration (in particular whether B, a former member who ceased membership in 2011, had standing);
• Whether restoration was just and would serve the statutory purpose under s.1031(1), given that Companies House records showed the LLP's members at dissolution were Cypriot companies (Company X, Company Y and Company Z) which had since been dissolved and could not themselves be restored;
• Whether the court's discretion under ss.1031 and 1032 permitted directions to place the LLP and other persons as nearly as possible in the pre-dissolution position, including recognising beneficial ownership interests arising under Cypriot law (transfer by universal succession and vesting of contingent rights in the beneficial owner) and nominee/trust arrangements.

Court's reasoning and conclusions:

1. Standing: the court held that s.1029(2)(g) authorises "any former member of the LLP" (without a temporal limitation) to apply, so B, despite ceasing membership in 2011, had standing.
2. Statutory purpose and discretion: applying authorities on the legislative purpose of restoration (Re Oakleague Ltd and Stanhope Pension Trust Ltd v Registrar of Companies) the court emphasised that restoration need only fall within the general legislative purpose (for example to enable a liquidator to pursue overlooked assets or creditors to bring claims) and that uncertainties about whether restoration will produce a benefit are a matter for future tribunals.
3. Conflict of laws and factual issues: expert evidence on Cypriot law indicated that dissolution by merger effected transfer by universal succession (Cap.113 s.200(2)), which under private international law would be recognised in England such that Company Y succeeded to Company X's assets and liabilities; moreover Cypriot law suggested contingent rights of dissolved companies could vest in the beneficial owner rather than passing bona vacantia. Those propositions made it plausible that A, as ultimate beneficial owner and beneficiary under nominee/trust arrangements, retained substantive interests in potential claims.
4. Directions and practical relief: given the breadth of s.1032(3) the court could properly order restoration and make directions enabling A to liaise with the liquidator so as to place him "as nearly as may be" in the position he occupied at dissolution, leaving subsidiary questions (whether A is a member, a creditor, or otherwise entitled) to be resolved later by the liquidator or other proceedings.

Result and further order:

• The appeal was allowed, Prudencia LLP was restored to the register and directions were given to reflect the court's view that A should be entitled to liaise with any liquidator in relation to the prospective claim.
• The judgment was anonymised and its publication restricted until either the proposed claim is initiated or 30 June 2025, in order to protect third parties.

Appeal allowed. The court held that (1) s.1029(2)(g) permits any former member to apply for restoration and so B had standing despite ceasing membership in 2011; (2) the court has a broad discretion under ss.1031 and 1032 to order restoration and to give directions to place the LLP and other persons as nearly as may be in the pre-dissolution position; and (3) on the evidence there was a plausible basis (including Cypriot law effects of universal succession and nominee/beneficial ownership) to justify restoration and directions entitling A to liaise with a liquidator. Accordingly the order refusing restoration was set aside and the LLP was restored with directions and a limited anonymisation/publishing restriction.

Appeal from an order of District Judge Hart, County Court at Central London, refusing an application under s.1029 Companies Act 2006 (as applied to LLPs by the LLPs (Application of Companies Act 2006) Regulations 2009, Reg. 57) to restore Prudencia LLP. The High Court (Chancery Appeals) allowed the appeal and ordered restoration. Neutral citation: [2024] EWHC 3255 (Ch).