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Voluntary wind up (objections?)

  • 20-07-2011 11:19am
    #1
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭


    Under the companies act a company must notify when it is holding a creditors meeting regarding a voluntary wind up.

    Is it out of the hands of creditors to object in any way to the voluntary element of this.

    Is it purely up to the Director of Corporate enforcement to decide whether directors can set up a new company and act as directors?


Comments

  • #2
    HellFireClub
    Closed Accounts Posts: 3,912 ✭✭✭HellFireClub


    smcgiff wrote: »
    Under the companies act a company must notify when it is holding a creditors meeting regarding a voluntary wind up.

    Is it out of the hands of creditors to object in any way to the voluntary element of this.

    Is it purely up to the Director of Corporate enforcement to decide whether directors can set up a new company and act as directors?

    The idea of a Voluntary Windup is that there are no creditors. One of the pre-requirements of a voluntary windup is that anyone who was at some stage owed money by the business, has been paid what they were owed and there are no accounts with outstanding balances.

    The idea behind the advertisement in the newspaper is to confirm that is indeed the case.

    As far as I know if someone replies to that advertisement with a demand for money, then you are still that step away from being in a position whereby as a member, you can proceed with a voluntary liquidation.

    Source: http://www.cro.ie/ena/business-termination-voluntary.aspx

    Edit: In relation to your last query, the only time you cannot become a director again (for a fixed period of time), is if you have been taken to court and have been disqualified as a director. Such proceedings are usually taken by The Office of the Director of Corporate Enforcement. It's very rare for this to happen, I wouldn't be worrying about this. Failure isn't a crime just yet in Ireland!


  • #3
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    HellFireClub wrote: »
    The idea of a Voluntary Windup is that there are no creditors. One of the pre-requirements of a voluntary windup is that anyone who was at some stage owed money by the business, has been paid what they were owed and there are no accounts with outstanding balances.

    This is wrong. There are two types of voluntary liquidations: creditors voluntary and members voluntary.

    A members' voluntary winding up is where the company is solvent and has no deficit of assets over liabilities.

    A creditors' voluntary winding up is where the company is insolvent and cannot pay its debts as they fall due.

    A court winding up (s.213 of the 1963 Act) is the only "non-voluntary" winding up (albeit a creditors' winding up is also involuntary in that the Acts impose a duty to do it in certain circumstances) and involves a Petition to the High Court.

    HellFireClub wrote: »
    Edit: In relation to your last query, the only time you cannot become a director again (for a fixed period of time), is if you have been taken to court and have been disqualified as a director. Such proceedings are usually taken by The Office of the Director of Corporate Enforcement. It's very rare for this to happen, I wouldn't be worrying about this. Failure isn't a crime just yet in Ireland!

    It's not as rare as it used to be. Though in the grander scheme it is still an uncommon application by a liquidator. Remember a creditor can seek to have a director disqualified in certain circumstances also.

    A more common application is a restriction (s.150 order) which will require any company for which a person holding said restriction acts as a director to maintain a certain level of paid up share capital.


    EDIT: The link HellFire Club links to above refers to a voluntary strike off and NOT a winding up. A company which has been wound up cannot be re-instated save in specific circumstances under s.310 of the Act. A company which is struck off for any reason can be re-instated by an application under s.12(B)(3) of the 1990 Act as amended. Also you can only have assets under €150 to seek a voluntary strike off and to properly distribute assets among members/creditors you have to liquidate the company rather than simply have it struck off.


  • #4
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    Thanks Guys,

    Do ye know if it is too late for a company to go to the courts to force payment if a company has given notice of voluntary liquidation?

    Thanks so far


  • #5
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    smcgiff wrote: »
    Thanks Guys,

    Do ye know if it is too late for a company to go to the courts to force payment if a company has given notice of voluntary liquidation?

    Thanks so far

    Depends by what you mean by "Give Notice" and what sort of liquidation it is. If I were you I'd speak to a solicitor.


  • #6
    shaneybaby
    Registered Users, Registered Users 2 Posts: 415 ✭✭shaneybaby


    smcgiff wrote: »
    Thanks Guys,

    Do ye know if it is too late for a company to go to the courts to force payment if a company has given notice of voluntary liquidation?

    Thanks so far

    Make the liquidator aware for one.

    Does a voluntary liquidation still go through the High Court? I think it does, not 100%. If it DOES then at the beginning the court clerk asks if there any creditors present. They wouldn't strike off a company by voluntary liquidation if there were still outstanding creditors.


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  • #7
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    Deleted User wrote: »
    Depends by what you mean by "Give Notice" and what sort of liquidation it is. If I were you I'd speak to a solicitor.

    Notice under section 266 companies act.

    We engage our solicitors for a plethora of stuff - this is something I need to be aware of myself.


  • #8
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    shaneybaby wrote: »
    Make the liquidator aware for one.

    Does a voluntary liquidation still go through the High Court? I think it does, not 100%. If it DOES then at the beginning the court clerk asks if there any creditors present. They wouldn't strike off a company by voluntary liquidation if there were still outstanding creditors.

    Great thanks - sounds like a plan


  • #9
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    smcgiff wrote: »
    Notice under section 266 companies act.

    We engage our solicitors for a plethora of stuff - this is something I need to be aware of myself.

    Yeah but it's pretty obvious this is a serious issue for you and proper legal advice is always best in these situations.

    You can still take action against a company that is being liquidated though there are a number of considerations such as costs and the ultimate worth of any judgment you might receive to be considered. As I said above a solicitor will be able to give you better advice on these matters.


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