UK Construction and Law
Restoring a dissolved company buys back only the days it was gone, and the clock does not wait
By Staff Writer | 31 August 2026
Buyers who lost deposits when a Liverpool development went into administration asked the High Court to stop time running against a dissolved firm of solicitors. The court held that a limitation direction cannot exceed the period of dissolution, and that even the longest period it could have ordered had already expired before the application was issued.
A company that has been struck off can be restored to the register, and once it is, it is treated as though it had never been dissolved. That is the general rule. What it does not do is give a claimant back the time it lost while there was nobody to sue. For that, the court has a separate power to make what is called a limitation direction. A judgment handed down on 26 August shows how narrow the power is and how easily it can be lost.
Five buyers had exchanged in 2019 on long leasehold units in a waterfront development in Liverpool. The conveyancing deposits recorded in the judgment run from 26,352 pounds to 46,540 pounds, with two of the five buying more than one unit and one of those paying a further 17,568 pounds on each. The developer went into insolvent administration before the purchases completed, the administrators sold the development, and there was no prospect of the deposits coming back. The buyers blamed the solicitors who had acted for them.
The window closed while nobody was looking
The firm ceased trading in 2021 and its business was transferred on. It was struck off the register on 27 August 2024 and dissolved a week later. From that moment there was no entity to sue, although the buyers could still have proceeded against its professional indemnity insurers directly.
They instructed solicitors in April 2025. A restoration order was made by the county court on 4 June 2025 and they knew nothing about it. Their letter of claim went out on 25 June, they invited the insurers into standstill agreements the following day, and the insurers signed on the footing that the firm was still dissolved. The buyers learned of the restoration on 17 July 2025, by chance. By then the earliest of the six year periods, running from exchange, had already gone.
The firm would not agree a consent order. The application was finally issued on 26 February 2026 and heard on 13 July.
The ceiling on the power
The court accepted that dissolution had disabled the buyers between April and July 2025, because a claim cannot be brought against an entity that does not exist, and rejected the argument that they should have restored the company themselves. It then addressed a point on which it had not been shown any authority.
in my judgment, the court's power to make a limitation direction must be limited to the period during which the company was dissolved. That is a consequence of the section requiring that the directions made under it place the company and all other persons in the same position as if the company had not been dissolved. If any longer period were ordered, that would place those persons in a better position, and go beyond the power conferred by the section.
Master Clark
The dissolution had lasted 274 days. Even on that maximum, the extended periods ran out between 15 April and 17 June 2026. In fact the court held the right period would have been shorter still, running from April 2025, when solicitors were first instructed, to the date of restoration, a maximum of 64 days. On either figure every claim was out of time before the application notice was issued. That was described as an insuperable obstacle, and the application was dismissed. The court added that the letter of claim itself showed more than a real prospect of success.
Why this reaches beyond conveyancing
Dissolved companies are ordinary furniture in construction disputes. Special purpose vehicles are wound up when a scheme completes, subcontractors are struck off for unfiled accounts, and a defect surfaces years later against a name that no longer exists at Companies House. The route is the same: restore, then ask for a limitation direction.
Three points follow for anyone taking that route. The direction can never be longer than the dissolution itself, so a two month strike off buys two months and no more. The clock keeps running while the application is prepared, and there is no relating back to the date it was issued. And where a restoration has already happened, the day the claimant finds out is the date the court will work from, which makes a standing check of the register a cheap insurance policy against a very expensive discovery.