Examinership under the Companies Act 2014
A company which is in examinership is under scrutiny by an examiner so that he/she can report back to the High Court or Circuit Court with proposals for the company’s survival. If a company qualifies as a small company under section 350 of the Act, the examinership may be remitted to the Circuit Court.
|To qualify as a small company two of the following three conditions must be met:|
|Balance sheet total not exceeding||€4.4m|
|Turnover not exceeding||€8.8m|
|Employees not exceeding||50|
Qualification of examiners:
A person shall not be qualified to be appointed or act as an examiner of a company unless he or she would be qualified to act as its liquidator (but disregarding for this purpose the requirements of section 634 concerning professional indemnity cover). A person who acts as examiner of a company when he or she is not qualified to do so shall be guilty of a category 2 offence. Please see section 5.1 in draft Information leaflet no 38.
|Documents to be Submitted||Filing Fee||Time for Delivery|
|E24||Notice of application for appointment of Examiner||€15.00||Within 3 days of presentation of petition|
|Court Order||Notice of appointment of interim examiner||€15.00||Within 3 days of appointment|
|Court Order||Notice of appointment of examiner||€15.00||Within 3 days of appointment|
|Court Order||Order to cease examinership or Order to approve scheme||€15.00||Forthwith|
Liquidations under New Companies Act 2014
There are a number of changes to the procedures regarding the submission of liquidation documents. There is now also a qualification necessary to become either a liquidator or examiner.
Three types of Liquidation:
Liquidation is still by Members voluntary winding up, Creditors voluntary winding up or by Court winding up. Option to voluntarily strike-off company now formalised. The court winding up procedure is being changed and court appointed liquidators will follow Creditors voluntary winding up procedures.
- Liquidators are now required to be qualified
- Cannot have been officer or employee within 2 years prior to liquidation (previously 1 year under Companies Acts 1963-2013)
- Period for liquidation documents to be filed have now changed or form requirements have been altered
- Liquidations by Court may be directed to follow creditors winding up procedure
- Statutory document submitted to CRO to indicate that liquidator has resigned.
Qualification for appointment as liquidator/provisional liquidator/examiner.
Under the previous Companies Acts, there were no formal qualifications necessary for the appointment as liquidator. The new Companies Act does require qualifications for appointment as either liquidator and examiner.
Supervisory Authority: The Irish Auditing and Accounting Supervisory Authority – Willow House, Millennium Park, Naas, County Kildare.
|Category 1||Member of Prescribed Accountancy Body|
|Category 2||Practising Solicitor|
|Category 3||Member of Professional Body recognised by IAASA|
|Category 4||Person qualified under the laws of other EEA state|
|Category 5||Person of practical experience|
Category 1 – Member of a prescribed accountancy body:
The person is a member of a prescribed accountancy body, being a person who –
- holds a current practising certificate issued by that body; and
- is not prohibited by virtue of rules of that body or a direction, ruling or decision of that body, or any disciplinary or professional practice committee of it, from acting as a liquidator.
Category 2 – Practising solicitor:
The person is a solicitor, being a solicitor who:
- holds a current practising certificate issued by the Law Society of Ireland under the Solicitors Acts 1954 to 2002; and
- is not prohibited by virtue of regulations made by the Law Society of Ireland, or a decision or order made
Category 3 – Member of other professional body recognised by IAASA:
The person is a member of such professional body as the IAASA may from time to time recognise for the purposes of this section, being a person who –
- is authorised for the time being by that professional body to pursue the particular activities that that body aims to promote or foster or as respects the pursuit of which by its members that body
- has been established to represent ; and
- is not prohibited by virtue of rules of that body or a direction, ruling or decision of that body, or any disciplinary or professional practice committee of it, from acting as a liquidator.
Category 4 – Person qualified under the laws of other EEA State:
The person is entitled under the laws of an EEA state, (other than Ireland), to act as a liquidator in insolvency proceedings and the qualifications held by, or the circumstances otherwise relating to the person, that entitle him or her so to act are ones that by virtue of any Community act, entitle him or her to act as a liquidator in the State.
Category 5 – Persons with practical experience of windings up and knowledge of relevant law:
The person –
- having made application in that behalf to the IAASA in the prescribed form within 2 years after the commencement of this section; and
- paid the prescribed fee and stands authorised for the time being by the Supervisory Authority to be so appointed, such authorisation having been granted on the grounds that each of the following is satisfied: 1. having been–(B) engaged on his or her own account in relevant work; or(ii) the person is, in the opinion of IAASA, after consultation with the ODCE, a fit and proper person to act as a liquidator; and
- (iii) the person does not fall within categories 1, 2, 3 or 4.
- 2. having practised in an EEA State (not being the State) as a liquidator;
- (A) employed in relevant work by a person who at the relevant time fell (or, if this section had been in operation at that time, who would have fallen) within categories 1, 2 or 3; or
- (i) the person has, prior to the commencement of this section, obtained adequate relevant experience of the winding up of companies and knowledge of the law applicable thereto by virtue of the person’s either –
Period for liquidation documents to be filed have now changed or form requirements have been altered:
Form E4, liquidator’s affidavit and section 682 accounts – is not required if the winding up continues for a period of less than 12 months. However, if the winding up continues for longer, Form E4 must be filed for the initial period of 12 months and each subsequent six-month period, and any lesser period, up to the date of the close of winding up (date of final meeting on Form E6). Form E4 has a filing fee of €15. The form E4 must be submitted within 14 days of the anniversary to the CRO.
This change affects member’s voluntary winding up, creditor’s voluntary winding up and court winding up.
Court Winding Up:
A company can be wound up by the Court at the instigation principally of any member or creditor of the company or the Minister in appropriate circumstances. The Court appoints the liquidator and he/she becomes an officer of the Court and works under its supervision. (The Court, used in relation to a company, means the High Court). The court may direct that the liquidation continue using the rules relating to a Creditors Voluntary Winding Up.
Statutory requirements –
A petition must be presented to the Court and when a winding up order is made a certified copy must be delivered to the CRO. A court order has a filing fee of €15. (See Section 7 regarding grounds for winding up by the Court). The liquidator, when appointed, must publish a notice of his/her appointment in Iris Oifigiúil (section 586 following creditors winding up procedures). A copy of any other subsequent order annulling or staying the winding up or dissolving the company must also be delivered for registration.
Forms to be delivered in a winding up by the Court:
|Forms to be Filed||Description||Filing Fee||Time to be delivered||Period to be covered|
|Court Order||Court Order to wind up and appoint the liquidator||€15||Forthwith|
|E3||Liquidators account of his/her acts and dealings||€15||Within 7 days of presentation at meeting||12 month periods. Any lesser period to end of liquidation need not be covered.|
|E4||Liquidators affidavit and accounts||€15||Within14 days of completion of period||First 12 months and thereafter every 6 months and also any lesser period to end date of liquidation|
|E5||Statement of account||€15||Within 7 days of meeting||Only submitted if following Creditors procedure|
|E7||Return of Final Meeting||€15||Within 7 days of meeting||Only submitted if following Creditors procedure|
|Court Order||Court Order to cease liquidation and dissolve company||€15||Within 21 days||Submitted where court directs. (Such companies would not be following creditors procedure).|
A liquidator when appointed to a company files form E2 as notice of that appointment.
Under the new Act, where a liquidator then resigns from the company, a form E2a must be submitted. If the liquidator was instead removed from the company, form E2b can be submitted. Thereafter, if/when a new liquidator is appointed they would file form E2c to acknowledge their appointment to the company.
Strike-off under the new Companies Act 2014
The New Act introduces a formal Voluntary Strike-off procedure. Voluntary strike-off is now set in legislation instead of an administrative procedure and there are new prescribed forms under the Act. No voluntary strike-off notices are required to be issued under the new legislation.
Introduction of formal Voluntary Strike-off procedure:
Strike-off is not always involuntary. A company that ceases to trade, or has never traded, and has no outstanding creditors can request that the Registrar strike off the company. Under the Companies Act 2014, this procedure has been placed on a formal setting.
Conditions for Voluntary Strike-off:
Section 731 of the Companies Act 2014 sets out the conditions for the voluntary strike-off application. A company may apply to the Registrar to be struck off the register if the following conditions are satisfied:
- (a) the circumstances relating to the company are such as to give the Registrar reasonable cause to believe that it has never carried on business or has ceased to carry on business;
- (b) the company has, within 3 months before the date of the application, by special resolution – (i) resolved to apply to the Registrar to be struck off the register on the ground that it has never carried on business or has ceased to carry on business; and (ii) resolved that pending the determination (or, should it sooner occur, the cancellation, at its request, of this process) of its application to be struck off, the company will not carry on any business or incur any liabilities;
- (c) the company has delivered to the Registrar all annual returns required by section 343 that are outstanding in respect of the company as at the date of the application;
- (d) the company has delivered to the Registrar a certificate in the Form H15 (filing fee €15) signed by each director certifying that as at the date of the application – (i) the amount of any assets of the company does not exceed €150; (ii) the amount of any liabilities of the company (including contingent and prospective liabilities) does not exceed €150; and (iii) the company is not a party to ongoing or pending litigation;
- (e) the Registrar has received from the Revenue Commissioners written confirmation dated not more than 3 months before the date on which the Registrar receives the application that the Revenue Commissioners do not object to the company being struck off the register; and
- (f) the company has caused an advertisement, in the prescribed format, of its intention to apply to be struck off the register to be published within 30 days before the date of the application in at least 1 daily newspaper circulating in the State.
Where an application under this section by a company to be struck off the register is made within one year after the date on which the company has changed its name or its registered office (or both), then, as the case may be –
- (a) the former name of the company, as well as the existing name of the company; or
- (b) the former address, as well as the current address, of the company’s registered office; or
- (c) both its former name and the former address of its registered office, as well as the existing name of the company and the current address of its registered office, shall be stated in the advertisement.
CRO Gazette – Public notice in case of voluntary strike-off:
As soon as is practicable after the receipt of an application by a company to be struck off, that satisfies the conditions, the Registrar shall, by publishing a notice in the CRO Gazette, give public notice of the Registrar’s intention to strike the company off the register. The CRO Gazette is published every week on the CRO’s website. The company will be dissolved within 90 days of the date of this notice unless an objection is received.
An objection to the strike-off, using Form H16 (member of public) or Form H17 (the company itself), must be received within 90 days of the notice in the CRO Gazette.
Objection to Voluntary Strike-off:
Any person may deliver to the Registrar an objection to the striking off of the company in the form H16. The objection must be confined to the ground that one or more of the conditions set out at (a) to (f) above that have not been satisfied. The period ends 90 days after the date of publication of the notice of strike-off. The Registrar will strike off the company if no valid objection is made and the company will be dissolved.
Company requests that application be cancelled:
The company may request of the Registrar, by delivering to the Registrar a notice in that behalf in the prescribed form H17, the cancellation of the process of its being struck off the register. The request must be submitted within the 90 days of the date of the publication of the notice of strike-off.
There are several grounds for the strike-off of a company from the register involuntarily.
The grounds are:
- The company has failed to make an annual return as required by section 343;
- The Revenue Commissioners have given a notice under section 882(3) of the Taxes Consolidation Act 1997 to the Registrar of the company’s failure to deliver the statement required under section 882 of that Act;
- The Registrar has reasonable cause to believe that section 137(1) is not being complied with in relation to the company – (the requirement to have an EEA resident director);
- The company is being wound up and the Registrar has reasonable cause to believe that no liquidator is acting;
- The company is being wound up and the Registrar has reasonable cause to believe that the affairs of the company are fully wound up and that the returns required to be made by the liquidator have not been made for a period of 6 consecutive months;
- There are no persons recorded in the office of the Registrar as being current directors of the company.
- Companies should note that a company may be struck off the register if it has failed to file an annual return for one year.
Consequences of Strike-off:
The consequences are very serious for a company that is still trading:
- The assets of the company become the property of the State on dissolution of the company;
- The company ceases to exist as a legal entity with effect from the date of strike-off and dissolution;
- The protection of limited liability is lost with effect from that date, and if the business formerly carried on through the company is continued, the owners are trading in their personal capacity;
- Banks should be unwilling to lend money to an entity which has, effectively, ceased to exist;
- There can also be unpleasant consequences for directors of such companies in that a disqualification order may be made against them by the High Court on the application of the Director of Corporate Enforcement.
- In accordance with section 728 of the Companies Act 2014, the registrar may give notice of the Registrar’s intention to strike a company off the register on one of the grounds set out above.
- It is the policy of the CRO to issue non-statutory reminder letters to non-compliant companies. These notices are issued by email where an address has been supplied or where the previous annual return was submitted electronically. The strike-off process commences with the issue of the statutory strike-off notice.
- The Registrar will send the notice by registered post – to the company at its registered office or if an individual is recorded in the office of the Registrar as the liquidator of the company, to the liquidator.
- The Registrar will also send a copy of the foregoing notice by prepaid ordinary post to such persons, if any, as are recorded in the office of the Registrar as being current directors of the company but non-compliance with this subsection does not affect the validity of the process. The address to which a notice under this subsection is sent shall be the usual residential address, as recorded in the office of the Registrar, of the addressee concerned.
Where a company does not have a registered office notified to the CRO, instead of giving a notice under section 727(1), the Registrar will publish a notice in the CRO Gazette containing the information required by section 728 where –
(a) the company has not, for 20 or more consecutive years, made an annual return as required by section 343; and (b) no notice of the situation of the registered office of the company has been given to the Registrar as required by section 50.
Contents of Registrar’s notice to company:
The Registrar’s notice under section 727(1) will –
- (a) state that the issue of the notice is the first step in a process that may lead to the company being struck off the register;
- (b) state the ground or grounds for striking off being invoked by the Registrar;
- (c) state that the company will be dissolved if it is struck off the register;
- (d) state that each director of the company at the date that the notice is sent is liable for disqualification if the company is struck off the register (this does not apply to companies in liquidation);
- (e) specify the remedial step;
- (f) specify the date on or before which the remedial step must be taken (28 days); and
- (g) state that failure to take the remedial step on or before the date so specified may result in the Registrar giving public notice of an intention to strike the company off the register.
- The date to be specified for the purposes of subsection (1)(f) shall be a date falling not less than 28 days after the date of the notice.
Remedial Steps that can be taken to remove a company from the strike-off process:
The remedial step to have a company removed from the strike-off process is whichever of the following applies:
- the delivery to the Registrar of all annual returns as required by section 343 that the company has failed to make;
- the delivery to the Revenue Commissioners of the statement that the company is required to deliver under section 882(3) of the Taxes Consolidation Act 1997;
- the provision to the Registrar of evidence that section 137(1) is being complied with in relation to the company;
- the provision to the Registrar of the details of the liquidator and of up to date periodic statements having been furnished under section 681;
- the notification to the Registrar under section 149(8) of the appointment of a director of the company.
The CRO Gazette – Public notice of intention to strike company off register:
If the Registrar has given a notice and the remedial step has not been taken on or before the date specified in that notice, the Registrar may, by publishing a notice in the CRO Gazette that gives public notice of the Registrar’s intention to strike the company off the register. The CRO Gazette is published on the CRO website each week – www.cro.ie. The date shall be a date falling not less than 28 days after the date of publication of the notice.