Liquidation

Member’s voluntary wind up

1) Resolution takes place where member’s vote for the company to be winded up

2) Liquidator is appointed by the members at a general meeting.

3) Company required to submit a Declaration of Solvency which says that the company has the ability to pay off its debts within the next 12 months. A statement of assets and liabilities must also be attached and an independent auditor report stating that the opinion of solvency is not unreasonable

4) Declaration of Solvency must be submitted to Registrar of Companies within 21 days of resolution to wind up

5) Irish gazette must be published within 14 days

Creditor’s Voluntary Wind-up

1) Company passes resolution stating that they are unable to pay their debts and are insolvent

2) A notice in the newspaper is put out and a creditor’s meeting is held where is it decided if they will wind-up the company as well as a statement of assets and liabilities is presented

3)Creditors appoint a liquidator or a committee of inspection. Committee of inspection must have no more than 5 creditor nominees and 3 member nominees

4) Final Account is submitted to CRO and dissolved within 30 days

Creditor’s Windup Conversion

1) Creditors representing 1/5th of the value of the creditors can apply to the court to have the company converted to a creditor’s windup if the court believes the company is unable to pay it’s debt

2) The liquidator of a member’s voluntary windup can call a creditor meeting and present evidence that the company is insolvent.

Court winding up

The courts can order the winding up of a company under Macron Developments 2010 which states that there are circumstances where the court can order winding up. This is done to safeguard creditors. The court is empowered to wind up the company on behalf of: the company itself, creditors, members, or any other contributors. The court will appoint a liquidator which will act as a court officer

Dutties of Liquidators

1) Identifying and Collecting Company assets

2) Drawing up a list of creditors and contributories,

3) Realising/Selling Assets

4) Seeking court direction

5) Paying off creditors and distributing surplus to members

Powers of Liquidators

1) Pay Creditors in full

2) Make Compromises or arrangements with creditors

3) Sell company property

4) Borrow money on security of assets

5) Continue the business

Grounds upon a court can wind up

1) Company passes resolution stating they will be winded up by the court

2) Company is unable to pay it’s debts

3) Directors are deceased or are unable to continue operations

4) Company does not commence business within 12 months

5) Court believes it is fair and equitable for company to be wound up

6) Disregarding the interests of a person

Examinership and reasonable prospect of survival

Examinership is a procedure to rescue a company when it is in financial distress. An Examiner is appointed with the power to create compromise schemes and proposals. The grounds for examinership is

1) They are unable to pay their debts

2) They are not in a voluntary or compulsory windup

3)

Satisfies prospect of survival Under Gallium Ltd 2009 the prospect of survival does not need to be “Probable”, evidence that survival is possible is all that is needed

Under Missford Ltd 2010, it is up to the court to decide whether to provide relief to the company where although reasonable prospect of survival was shown with evidence, relief was still not provided.