PHILIP A BECK
Licensed Insolvency Practitioner
41 Kingston Street, Cambridge CB1 2NU
Tel: 0800 1953605 (Free call) or 01223 367022
Fax: 0844 5048737
Bona vacantia is ownerless property, and arises mainly when people die without a will and no next of kin, or a company is dissolved, yet still has assets. Under English law, such ownerless property passes to the Crown i.e. the British Government, and is administered by the Treasury Solicitor on behalf of the government. The government will, however, release the property, or the proceeds of realisation thereof, if a rightful beneficiary successfully claims it.
In the context of an informal winding-up, bona vacantia will arise when all the companies assets have been realised, the distributable reserves (company's profits) have been distributed to the shareholders, and the company is left with share capital, and possibly other reserves which cannot legally be distributed. As it is technically illegal to distribute a company's share capital or undistributable reserves, the Treasury Solicitor will view any such distribution as invalid, therefore when the company is dissolved, the invalid distribution will be deemed to be money owed by the shareholders back to the company, and may pursue the shareholders for repayment.
On 14 October 2011, the Treasury Solicitor indicated that it would no longer pursue the repayment of any invalid distributions made upon dissolution of a company, as the process of reducing a company's capital has now been simplified under the Companies Act 2006.
Philip Beck is a Licensed Insolvency Practitioner operating since 1996 with substantial experience in undertaking liquidations, both solvent and insolvent.
Please note that this site deals only with company and tax law in the United Kingdom of Great Britain and Northern Ireland. It is not applicable to other jurisdictions.
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