Divided by a Common Language?

Differences in legal concepts and practices in England and abroad. (“Divided by a Common Language”?)

In England and Wales almost all of the Notaries have qualified by first becoming Solicitors and then taking the further step of becoming a Notary by additional Articles (training as the Clerk to a Notary) or by examination or both. This means that we have a strong knowledge of the law of England and Wales. Almost an indoctrination in my case after thirty years. Sometimes I wonder whether that that is a help or hindrance in Notarial work, where it is the law of the foreign Country which matters above all.

This point has arisen twice in the past month, in both cases I was dealing with paperwork for owners of Property (interests in Land) in USA. I will deal with the second case next month (I know, you can hardly wait)

The First case was a sale by a Company registered in North Carolina. As always in Company matters my first step was to make a “Company Search” of the registers of the Company’s status in its place of incorporation. The result showed me that whilst the company had indeed been formed and that the person in my presence had indeed been an authorised signatory for the Company, in fact the Company status result was “DISSOLVED”.

In the case of an English Company which is dissolved, this means that the Company is completely at an end. Legally, it could be said to be even more dead than a dead person. A dead person has an estate, the property the person owned whilst alive, and a Court-appointed Executor or Administrator can sell that property (although the Government may take a lot of it in tax). By contrast, a dissolved Company cannot have any estate. If it did not dispose of its property before the dissolution this is a serious mistake since those assets are now “bona vacantia” – meaning literally “un-owned goods” – and now belong to the Crown Estate.

This situation was not good, my client urgently wanted to sign a Deed to sell property, which belonged to a dissolved Company. I cannot guess how many days of delay and letters to and from North Carolina might have been involved in years past, before this age of internet connection. As it was, it took only a short time for me to explain my concerns to my client’s legal advisor in USA (The very helpful Aleta B. Kiser, Attorney at Law) and I had the explanation.

Which is, North Carolina General Statutes §55-14-05 Effect of Dissolution. This law of USA NC says that a dissolved corporation continues its corporate legal existence but may not trade other than to liquidate its business and affairs.

So in effect, a Dissolved Company in N Carolina, is more or less what is called a Company in Liquidation in England although in the States there may be no formal Liquidator, and, in the States, a Company that has been liquidated is what we in England would refer to as a Company that has been dissolved.

Two words, quite opposite meanings. Perhaps only a Notary could find that fascinating?