Understanding Vesting Orders: Safeguarding Your Property Rights After a Company Shuts Down
Vesting Orders
Generally speaking, when a company is dissolved and ceases to exist, any property or assets held by the company, or held in trust for the company, are considered to be bona vacantia (or ownerless property) and so belong to the Crown. However, if the company held property on behalf of another entity immediately prior to dissolution, that entity can apply to the court to transfer the legal title of the property to them (and not the Crown). This is known as a Vesting Order application.
A Vesting Order, simply, is a court order which directly transfers the legal title (ownership) of property from one party to another.
The Vesting Order itself acts as the instrument that legally transfers ownership. This is unusual as it eliminates the requirement for the usual formal steps for a transfer of property, such as by written deed or similar.
Our Poppi Hall has dealt with a matter whereby a Vesting Order was required. This related to a commercial property, being held by a dissolved limited company, to which our client was the beneficial owner. Our client was seeking the legal title of the property be transferred to him in his personal capacity.
To make a Vesting Order application to court (in relation to a dissolved company), there needs to be strong evidence that, at the time of dissolution, a company held the legal title of the property on trust for a 3rd party beneficial owner. For Poppi’s matter, there was strong evidence that the dissolved company held the property on trust for our client; our client had previously paid market value for the property.
A claim was filed in the High Court on behalf of our client, using detailed witness evidence and documentary evidence to support our client’s position. The matter concluded, in our client’s favour, at an initial directions hearing approximately 3 months later.
Most Vesting Order applications were previously dealt with by the Chancery Division of the High Court, following the specialist part 8 procedure under the court’s Civil Procedure Rules. However, this has now changed. New reforms announced by the judiciary, and supported by government, mean that the Chancery Division was replaced by a new Business and Property Division in the High Court from 1st October 2026.
It should be noted that the current position is that any entity applying for a Vesting Order will need to meet the defendant’s costs of the application. The defendant to such a claim is usually His Majesty’s Attorney General, who may be supported by the Treasury Solicitor. The requirement to meet the defendant’s costs (and sometimes the Treasury Solicitor’s costs) is irrespective of whether the application succeeds or not.
Company Restoration
In these circumstances, the limited company had been voluntarily dissolved in early 2015. The timing of our client becoming aware of the title issue and thusly instructing our firm, meant that the generally more straightforward process of applying to court for a Restoration Order was unavailable.
There is a strict 6-year time limit from the date of dissolution of a limited company to restore a limited company (unless there is a personal injury claim).
If restoration of the company was an available option, it would mean an application being made to court requesting that the company’s dissolution be reversed and the company be reinstated to Companies House. From there, a transfer of the property from the company to our client could have taken place.
How We Can Help You
We are more than happy to help you if you believe you may need to investigate obtaining a Vesting Order or Restoration Order.
Please do not hesitate to contact Poppi Hall should you require assistance on 01922 687700 / 07802 479 620 or via email ph@enoch-evans.co.uk.