Part 11 – Winding up
16 Chapters – Sections 559 to 724
Part 11 Chapter Overview
Chapter 1 – Preliminary and interpretation
Chapter 2 – Winding up by court
Chapter 3 – Members’ voluntary winding up
Chapter 4 – Creditors’ voluntary winding up
Chapter 5 – Conduct of winding up
Chapter 6 – Realisation of assets and related matters
Chapter 7 – Distribution
Chapter 8 – Liquidators
Chapter 9 – Contributories
Chapter 10 – Committee of inspection
Chapter 11 – Court’s Powers
Chapter 12 – Provisions supplemental to conduct of winding up
Chapter 13 – General rules as to meetings of members, contributories and creditors of a company in liquidation
Chapter 14 – Completion of winding up
Chapter 15 – Provisions related to the Insolvency Regulation
Chapter 16 – Offences by officers of companies in liquidation, offences of fraudulent trading and certain other offences, referrals to D.P.P. etc.
Part 16 Summary
The consolidations and modernisation in relation to the law relating to the winding up of companies.
What is new?
This Part of the Act largely restates existing law. It provides a new definition of property, extending it to the proceeds of any statutory rights conferred upon the liquidator or company by this Act. The Act provides for the first time a qualification to act as a liquidator (5 categories of persons who will qualify) and lists the powers of a liquidator. The Act also provides powers to seek direction from the court on questions regarding the exercise of a liquidator’s power. The Act states it will be an offence to act as a liquidator if not qualified. A new provision allows for the custody of books and property to remain with a vacating liquidator in until a new appointment is made. The liquidator’s remuneration is now a matter for the court and the terms of remuneration must be set and approved prior to taking any remuneration. A new provision in the Act compels the liquidator to have regard to the wishes of the creditors and contributories and empowers him to convene meetings for that purpose. Disciplinary committees of prescribed bodies must report misconduct by liquidators to the director of corporate enforcement. Regarding completion, the Act provides for a dissolution by the court but also provides that the default position is that the company shall be dissolved pursuant to the creditors’ voluntary liquidation procedure. In a winding-up, company books and papers must be retained for six years, rather than three years, after the dissolution of the company. This brings Ireland in line with best practice internationally.
What is different?
A greater consistency regarding the three different methods of winding up has been introduced. The procedures regarding a winding up by court, a members’ voluntary winding up and a creditors’ voluntary winding up are set down in the Act. The Act sets out the priority of costs, charges and expenses incurred in a winding up. A liquidator may resign from any winding up and the Act extends this provision to the express permission to resign in the case of a voluntary winding-up.
What are the Key Points?
- Qualification requirements for liquidators
- Court to set liquidators remuneration
- Liquidator must have regard for creditor’s wishes
- Reporting obligation re misconduct by liquidators
- Books and papers must be retained for 6 years
- Winding up procedures on a statutory footing
- Provisions for resignation of liquidator
What do accountants need to do?
If an accountant intends to act as a liquidator they must ensure they meet the qualification requirements and are aware of the powers bestowed upon a liquidator by the Act. They should be aware of the measures contained in the Act regarding remuneration of liquidators.
What do companies need to do?
A company should be aware of the three different types of winding up set down in the Act and the offences set down in the Act in relation to failure to disclose information, fraudulent acts and material omissions.