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What Are the Costs Beyond Fees in Company Restorat
What Are the Costs Beyond Fees in Company Restorat
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Mar 19, 2025
8:45 AM
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When a company gets struck off the Companies House register, bringing it back to life through company restoration can feel like a lifeline for business owners. Whether your company was dissolved due to missed filings, financial troubles, or an administrative oversight, restoring it allows you to reclaim your business name, assets, and operations. But while the official fees for company restoration often grab the spotlight, they’re just the tip of the iceberg. Hidden costs—both financial and non-financial—can pile up quickly, catching many by surprise. In this blog, we’ll dive deep into the true costs of company restoration, beyond the fees, to help you prepare for the journey. From legal expenses to lost opportunities, we’ll uncover what you need to know to make an informed decision. Let’s get started!
What Are Company Restoration and Its Costs? Company restoration refers to the legal process of reinstating a dissolved company to the Companies House register in the UK. If your company was struck off—either voluntarily or by Companies House for failing to file accounts or annual returns—you can apply to restore it under certain conditions. The process aims to return the company to its pre-dissolution state, allowing you to resume trading, access frozen assets, or settle outstanding liabilities.
Types of Company Restoration
There are two main routes for company restoration, each with its own set of costs:
Administrative Restoration
This method applies if your company was struck off by Companies House within the last six years and you meet specific criteria, like proving the company was trading at the time of dissolution. You file a Form RT01, pay a £100 fee (as of 2025), and settle any outstanding penalties or late filing fees. Companies House typically processes this within a few weeks if all documents are in order.
Court-Ordered Restoration
If administrative restoration isn’t an option—say, the six-year window has passed or the dissolution was voluntary—you’ll need to apply through the courts. This involves submitting an application to the High Court, paying a court fee of £280, and potentially attending a hearing. The process can take months and often requires legal assistance, driving up costs significantly.
The Official Fees
The visible costs of company restoration are straightforward: £100 for administrative restoration or £280 for court-ordered restoration. You’ll also need to pay any outstanding Companies House penalties, which can range from £375 to £1,500 per missed filing, depending on how late they are. But these fees are just the beginning. Let’s explore the hidden costs that often catch business owners off guard.
The Hidden Costs of Company Restoration
Beyond the official fees, company restoration involves a range of expenses and challenges that can impact your finances, time, and mental energy. Here’s a breakdown of what to expect:
Legal and Professional Fees
Court-ordered restoration almost always requires a solicitor or legal advisor, especially if the case is complex. Solicitors charge anywhere from £1,000 to £5,000, depending on the case’s complexity and their hourly rate (typically £200-£500). Even administrative restoration might need an accountant to prepare overdue accounts, costing £500-£2,000. These professional fees can quickly dwarf the official costs of company restoration, especially if disputes arise or additional court hearings are needed.
Overdue Accounts and Tax Liabilities
When a company is dissolved, its tax obligations don’t disappear. During company restoration, you must file all overdue accounts and tax returns. Preparing these can be costly if records are incomplete—accountants might charge £1,000-£3,000 to reconstruct financials. You’ll also need to settle any unpaid Corporation Tax, VAT, or PAYE, plus interest and penalties. For example, HMRC charges 7.75% annual interest on late Corporation Tax (as of 2025), and penalties can reach 10% of the unpaid amount. A company owing £10,000 in back taxes could face an additional £2,000 in interest and fines.
Asset Recovery Challenges
If your company owned assets—like property, bank accounts, or intellectual property—they may have been transferred to the Crown as “bona vacantia” (ownerless goods) upon dissolution. Restoring the company doesn’t automatically return these assets; you’ll need to negotiate with the Government Legal Department (GLD). The GLD may charge a discretionary fee, often 1-2% of the asset’s value, to release them. For a £100,000 property, that’s £1,000-£2,000. If assets were sold off, you might need to repurchase them at market value, adding to the financial burden of company restoration.
Lost Business Opportunities
While your company is dissolved, you can’t trade under its name, pitch to clients, or secure contracts. The time spent on company restoration—weeks for administrative restoration, months for court-ordered—means missed opportunities. For a small business earning £5,000 monthly, a three-month restoration process could cost £15,000 in lost revenue. If your company name was taken by another entity during dissolution, rebranding or legal battles to reclaim it could add thousands more in costs.
Administrative Overheads
Restoring a company requires gathering old records, contacting former directors or shareholders, and updating Companies House with current details. This administrative work takes time and effort. If you hire a company secretarial service to handle this, expect to pay £500-£1,500. Even doing it yourself means diverting hours away from running your business, which can indirectly cost you in lost productivity.
Credit and Reputation Damage
A dissolved company often signals financial trouble to suppliers, lenders, and clients. During company restoration, you might struggle to rebuild trust. Suppliers may demand upfront payments, and banks might hesitate to extend credit, forcing you to operate on tighter terms. Repairing your reputation could involve marketing campaigns or legal assurances, costing £1,000-£5,000 depending on your industry.
Emotional and Mental Toll
The stress of company restoration shouldn’t be underestimated. Navigating legal processes, dealing with HMRC, and facing uncertainty about your business’s future can take a toll on your mental health. While this isn’t a direct financial cost, it impacts your decision-making and productivity, potentially leading to further losses. Some business owners report spending 20-30 hours a week on restoration tasks, leaving them drained for other responsibilities.
Potential Litigation Risks
If your company was dissolved while owing debts, creditors might resurface after restoration, demanding payment with interest. Legal battles with creditors can cost £5,000-£20,000 in legal fees, especially if they escalate to court. Similarly, if former employees claim unpaid wages or benefits, you might face employment tribunal costs, averaging £3,000-£10,000 per case.
These hidden costs highlight why company restoration is more than just a fee. Understanding them upfront helps you budget and prepare for the full scope of the process.
Why Company Restoration Matters
Despite the costs, company restoration plays a critical role for many businesses. Let’s explore why it’s worth considering, even with the financial and emotional challenges.
Conclusion
Company restoration offers a path to revive your business, but the costs go far beyond the official fees. From legal expenses and tax liabilities to lost opportunities and emotional strain, the process demands careful consideration. Weigh the benefits—like reclaiming assets, protecting your brand, and resuming operations—against the financial and non-financial burdens. If the value of restoration outweighs the costs for your business, take the plunge with a clear plan. Consult professionals, budget for hidden expenses, and restore your company with confidence!
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