Legislation on company liquidation in Ireland
Company liquidation falls under the Irish Companies Act or the Principal Act of 1963. According to the Irish legislation, liquidation is defined as a terminal process where all company assets are liquidated, company creditors are paid and the company is dissolved and removed from the Trade Register’s records. Company winding-up in Ireland can be done through court liquidation or voluntary liquidation that can be requested by the creditors or by the company members. Our Irish company formation experts can help businessmen who want to close their companies.
Court liquidation in Ireland
Court liquidation in Ireland can only occur if one or more creditors address the Irish High Court and petition for a winding-up order and the appointment of a liquidator. Court liquidation usually happens when an Irish company can no longer pay its debts. A court liquidation procedure may be initiated if the company cannot pay debts amounted to over 1,250 euros within 3 weeks from receiving the notification, if the debt remains unpaid after a court order has been issued or if proof that the debt cannot be paid is brought before the Court. In order to conduct the liquidation procedures the Court will appoint an official liquidator that will investigate the company’s activities and will proceed to the company’s winding-up.
For help in cases of compulsory liquidation you can request the legal services of our Irish representatives in company formation.
Voluntary liquidation in Ireland
In cases of voluntary liquidation in Ireland, the petition may be submitted by the creditors or by the company’s members. Creditors’ voluntary liquidation (CVL) usually happens when an Irish company is insolvent. The creditors’ voluntary liquidation in initiated by the company’s directors that will hold a board meeting in order to agree on the administration of the company by the creditors. Once the resolution is made, the directors are required to notify the shareholders and creditors. According to the Companies Act the creditors must be notified ten days prior to the board meeting, and the announcement must also be published in two daily newspapers for a ten-day period. The director of a company must state the reasons for company liquidation and must also present a Statement of Affairs that contains the value of all company’s assets.
The members’ voluntary liquidation in Ireland applies while the company is still solvent or the directors decide to retire and the company’s assets must be distributed between to the shareholders and creditors. Voluntary liquidation conducted by an Irish company’s members is initiated by the shareholders. The directors must sign a declaration of solvency that will state the company will pay all debts within 12 months. Upon the completion of the liquidation procedures, the company will be dissolved.
For details about the provisions of the Companies Act regarding company liquidation please contact our specialists in company formation in Ireland.