A & Anor v The Registrar of Companies

A former member of a limited liability partnership may apply for restoration under section 1029(2)(g) of the Companies Act 2006, regardless of when membership ended. Restoration does not require the court to determine at the threshold that it will produce a benefit. It is sufficient that the application falls within the legislative purpose, including enabling an overlooked asset or potential claim to be pursued. Uncertainties about the claim, entitlement to recoveries or the identity of those entitled to participate should generally be left for later determination. The court has broad powers under section 1032(3) to make directions placing the LLP and other persons as nearly as possible in their former position, including permitting a beneficial owner to liaise with the liquidator.

A and B appealed against a County Court decision refusing to restore Prudencia LLP to the register. The LLP had been dissolved following a members’ voluntary liquidation. Its former corporate members had subsequently been dissolved, and B had ceased to be a member before the LLP’s dissolution.

The appellants sought restoration so that the LLP could pursue potential claims concerning a settlement agreement allegedly procured by misrepresentations. The central issues were whether B had standing as a former member, whether restoration could be ordered despite the absence of an existing registered member, and whether the court could give directions addressing the position of persons whose interests had been held indirectly.

1. Appeal allowed. The LLP was ordered to be restored to the register, with directions allowing A to liaise with the liquidator concerning the proposed claim.
2. Section 1029(2)(g) of the Companies Act 2006, as modified for LLPs, permits an application by any former member. The provision contains no temporal limitation. That contrasts with section 1029(2)(h), which expressly refers to a creditor at the time of striking off or dissolution. B therefore had standing despite having ceased to be a member in 2011.
3. The court’s discretion under section 1031(1), read with section 1032, is directed to the statutory purpose of restoration. Following the approach in Re Oakleague Ltd [1995] BCC 921 and Stanhope Pension Trust Ltd v Registrar of Companies [1994] BCC 84, the court need not be satisfied that restoration will certainly produce a benefit. The existence of a possible overlooked asset, here a potential misrepresentation claim, was sufficient to make restoration just under section 1031(1)(c).
4. The court could not finally determine at the restoration stage the validity of the proposed claim, the parties’ ultimate interests in recoveries, or whether A should be treated as a member, creditor or neither. Those matters could be determined later by the liquidator, another tribunal or on further application.
5. The Cypriot dissolution-by-merger process appeared to operate by universal succession. On the evidence, Company Y may therefore have succeeded to Company X’s membership obligations without complying separately with the Partnership Agreement’s membership formalities. The analysis concerning the vesting in A of contingent rights formerly held through Companies Y and Z was sufficiently persuasive to justify restoration, although it was not finally decided.
6. Section 1032(3) supplied sufficient flexibility to place A as nearly as possible in the position he would have occupied had the LLP not been dissolved. The court also directed that the judgment remain anonymised temporarily under CPR rule 39.2(4), given credible evidence of potential reprisals affecting family members.

• Chancery Appeals, High Court: The appeal from the County Court at Central London was allowed. Prudencia LLP was ordered to be restored to the register.
• County Court at Central London: District Judge Hart dismissed the restoration application, principally because no member of the LLP was then in existence.