Dissolved Company Still Operating

GLC

Hi,

Just wondering if someone can explain to me how a dissolved company can continue to operate as if nothing has happened, without notification to employees etc....

I've explained things in a little more detail here http://www.boards.ie/vbulletin/showthread.php?p=92713041&utm_source=notification&utm_medium=email&utm_campaign=notification#post92713041

Any help would be great, thanks.

pedronomix

Look at you tax free allowance cert or P60 and see the name of your actual employer now. This can happen that during a reorganisation of companies that employees are transferred to another company but their rights and entitlements are continued undiminished under a transfer of employer obligations etc! See more http://www.citizensinformation.ie/en/employment/employment_rights_and_conditions/contracts_of_employment/transfer_of_business.html

pedroeibar1

GLC wrote: »

Just wondering if someone can explain to me how a dissolved company can continue to operate as if nothing has happened, without notification to employees etc....

Simple answer is - legally, it cannot.
There is something very odd about this – there are serious underlying corporate law issues.
A company may be dissolved by voluntary or compulsory liquidation or by being struck off the CRO register. Which one happened to your employer?

Search here and it will show the status. Using the correct / exact name is most important, e.g. ABC Ltd. is not the same as ABC (Sales) Ltd.

If the company has actually been dissolved and the business transferred to another entity, there are certain protections to your rights, Google ‘TUPE employment rights Ireland’ and you will find examples

GLC

pedroeibar1 wrote: »

Simple answer is - legally, it cannot.
There is something very odd about this – there are serious underlying corporate law issues.
A company may be dissolved by voluntary or compulsory liquidation or by being struck off the CRO register. Which one happened to your employer?

Search here and it will show the status. Using the correct / exact name is most important, e.g. ABC Ltd. is not the same as ABC (Sales) Ltd.

If the company has actually been dissolved and the business transferred to another entity, there are certain protections to your rights, Google ‘TUPE employment rights Ireland’ and you will find examples

That is my thoughts exactly. I cannot make sense of it at all. I cannot establish whether it was dissolved voluntary or involuntary. It just says dissolved on the CRO website. Since January 2012 at that. I shall Google TUPE and have a look at that. Thanks.

pedroeibar1

Going out on a limb here ……..IF you are correct and the company has been dissolved, and not replaced by another, I’d guess that it was struck off and dissolved for non-filing of accounts. IF that is the case the business has lost the protection of limited liability ………… I cannot see how the Revenue could live with the situation you describe. Nor can I imagine that the credit controllers in all the suppliers have been on snooze control and are willing to supply a non-entity. Have there been any issues with suppliers?
The company can be restored to the Register, but if it was dissolved more than a year ago it has to go through that process via the High Court.

GLC

pedroeibar1 wrote: »

Going out on a limb here ……..IF you are correct and the company has been dissolved, and not replaced by another, I’d guess that it was struck off and dissolved for non-filing of accounts. IF that is the case the business has lost the protection of limited liability ………… I cannot see how the Revenue could live with the situation you describe. Nor can I imagine that the credit controllers in all the suppliers have been on snooze control and are willing to supply a non-entity. Have there been any issues with suppliers?
The company can be restored to the Register, but if it was dissolved more than a year ago it has to go through that process via the High Court.

Seeing as accounts haven't been filed since 2009 I'm taking a guess at the company being dissolved for non filing of accounts also.

Although the company appears to be a non entity at present everything still has Ltd on it, van, stationery, stamps etc....


Either can I, the lady I spoke to in Revenue told me it was more a legal issue and couldn't help me.

There have been issues with suppliers to some regard that I'm aware of with regards to overdue accounts and the like but none seem to refuse him altogether. The company have been in existence for quite a long period of time and no doubt would of had a good relationship with suppliers when things were good. Whether this stands to him I don't know.

pedroeibar1

If the trading is being done through the dissolved company then the people behind the business are personally liable for its debts. Have a read of this

If those behind the business are doing business in that manner, in your position I would be concerned that PAYE & PRSI etc contributions deducted from you are being passed on. It would be advisable to contact the Soc. Welfare people to check if you are paid up to date.

GLC

Just questioned the boss on the matter there. In his words it is an accounting matter. And he intends restoring the company when he has the money to do so, making it all sound so simple and straightforward!! According to him there is no break in service with regards to redundancy. So I just don't know!

pedroeibar1

The 'boss' is facing serious issues under corporate law and governance. It is neither very simple nor straightforward. Currently the assets of the 'dissolved' company belong to the State. In your position I would check with Soc. Welfare as advised above and also start looking for another job.

Sounds like there is a court case going on currently to me. Probably got dissolved because of an unpaid revenue bill, but have somehow challenged this to allow themselves to keep trading.
I can't see how anything else is possible, still trading after dissolving just does not compute!

pedroeibar1

Deleted User wrote: »

Sounds like there is a court case going on currently to me. Probably got dissolved because of an unpaid revenue bill, but have somehow challenged this to allow themselves to keep trading.
I can't see how anything else is possible, still trading after dissolving just does not compute!

That does not compute either.

pedroeibar1

pedroeibar1 wrote: »

That does not compute either.

How else can they be trading legally if its been dissolved, unless there is a stay of execution with a court case going on?

pedronomix

A company cannot simply dissolve without going through the formal winding up process. The company can be struck off, even Revenue cant do this, they must follow due process too. If the directors continue to trade as the company, as Pedroeibar pointed out, they do so illegally and also lose limited liability protection. There is no state of purgatory, or slightly pregnant here!!

barneystinson

pedronomix wrote: »

A company cannot simply dissolve without going through the formal winding up process. The company can be struck off, even Revenue cant do this, they must follow due process too. If the directors continue to trade as the company, as Pedroeibar pointed out, they do so illegally and also lose limited liability protection. There is no state of purgatory, or slightly pregnant here!!

All of this is well and good, but at the end of the day what difference does it make to an employee, apart from it putting them on notice that there's a substantial risk of the business failing...

Revenue have little reason to care as long as the taxes are being paid; in fact if anything they'll be delighted that they have recourse to the directors personally for the company's debts, and likewise other creditors.

pedronomix

Revenue are pet lambs compared to the ODCE, these guys take no prisoners, mess on their territory at grave peril!!

pedronomix

pedronomix wrote: »

A company cannot simply dissolve without going through the formal winding up process. The company can be struck off, even Revenue cant do this, they must follow due process too. If the directors continue to trade as the company, as Pedroeibar pointed out, they do so illegally and also lose limited liability protection. There is no state of purgatory, or slightly pregnant here!!

Question is how does one trade illegally for two years with no one batting an eyelid?

pedronomix

Deleted User wrote: »

Question is how does one trade illegally for two years with no one batting an eyelid?

Without knowing the actual facts in detail and we only have an employees version so far, I have not got an idea how he could get away with it. But just like the wronged wife, the employees are often the last to know the actual truth!!

pedroeibar1

I really wonder about the genuiness of this topic. I asked the OP was he sure he had the right name for the CRO search – he implied he had – so we are dealing with the same co., after asking the boss we're told 'it was an accounting issue' and the co would be restored when he had the money - like will he have fees to pay the fines,(€2 per day I think) since the last ARD? And pay for a trip to the High Court?
I asked were there supplier issues – OP said there were a few, but the boss had a good relationship with them. I have a poor view of many in the credit control function in Ireland, but it would be an abysmal failure and dereliction of duty for any CC to authorize supply under these circumstances.
As Pedronomix aptly put it above, one cannot be slightly pregnant or dissolved. Copying Px's love of similes, in this case the boss has put his head in a noose and his a$$ soon will be in a sling.
The Revenue would not be disinterested, I believe they would have much to say. I slightly disagree with Pedronomix on the ODCE. I do not hold them in high regard, while they have big teeth their rate of prosecution is minute when compared to the activity and rigor of the Insolvency Service in the UK. More than 7,000 companies are struck off every year in Ireland, and what happens? (nada!):rolleyes:

barneystinson

pedroeibar1 wrote: »

The Revenue would not be disinterested, I believe they would have much to say.

Like what, exactly?

dbran

Hi

If a company is struck off the registrar of companies two things happen

1) From the point the company is struck off the company's shareholders loses the protection of limited liability and if they continue to trade they are thus exposed.
2) All the assets of the company vest with the State. If they are still using the company's bank account, once the bank become aware that the company is dissolved they usually freeze the account with any funds that are in it. That will be when the problems start.

A company that is dissolved effectively does not exist. It cannot be sued or take an action against anyone. Hence the reason why some creditors have been known to pay to have the company restored so that they can get at the assets of the company to get paid. I suspect that this may be the reason why he is happy to remain struck off.

Unless there is something in the new companies bill it is going to be extremely expensive to restore the company. It needs a trip to the high court, multiple audited accounts, late filing fees, solicitors and baristers fees etc.

The revenue dont really care whether the company is struck off or not especially as they can now go after the directors personally for arrears. The CRO and revenue do not really talk to each other that much.

ODCE is a paper tiger in reallity. They are under resourced and rarely persue directors simply for non filing of accounts. It usually needs a report to go into them first before they initiate anything at all.

It hard to know exactly what is the position re the employment contracts. It is probably a transfer of undertaking but as there is no clear transfer it is hard to be sure in reality.

dbran

GLC

pedroeibar1 wrote: »

I really wonder about the genuiness of this topic. I asked the OP was he sure he had the right name for the CRO search – he implied he had – so we are dealing with the same co., after asking the boss we're told 'it was an accounting issue' and the co would be restored when he had the money - like will he have fees to pay the fines,(€2 per day I think) since the last ARD? And pay for a trip to the High Court?
I asked were there supplier issues – OP said there were a few, but the boss had a good relationship with them. I have a poor view of many in the credit control function in Ireland, but it would be an abysmal failure and dereliction of duty for any CC to authorize supply under these circumstances.
As Pedronomix aptly put it above, one cannot be slightly pregnant or dissolved. Copying Px's love of similes, in this case the boss has put his head in a noose and his a$$ soon will be in a sling.
The Revenue would not be disinterested, I believe they would have much to say. I slightly disagree with Pedronomix on the ODCE. I do not hold them in high regard, while they have big teeth their rate of prosecution is minute when compared to the activity and rigor of the Insolvency Service in the UK. More than 7,000 companies are struck off every year in Ireland, and what happens? (nada!):rolleyes:

Unfortunately I am genuine and I am at even more of a loss what to do now than before and to be honest all this is going way over my head.

If I do go to the relevant authorities do I risk bringing my employment to an even sooner end, and if I do that do I even get redundancy at all.

pedroeibar1

barneystinson wrote: »

Like what, exactly?

For starters Revenue would have an interest in the legal standing and correct nature of any entity with which they are dealing. It’s basic to any contract and called due diligence. If a business is so crooked that it would trade fraudulently, the odds are high that its tax affairs are not correct either. If what the OP has written is true/correct, it is only a matter of time before flying object and fan meet, so Revenue would be exposed to very negative comment, negligently allowing this occur, etc., over a prolonged period of time. So yes, they would be very interested.

dbran

pedroeibar1 wrote: »

For starters Revenue would have an interest in the legal standing and correct nature of any entity with which they are dealing. It’s basic to any contract and called due diligence. If a business is so crooked that it would trade fraudulently, the odds are high that its tax affairs are not correct either. If what the OP has written is true/correct, it is only a matter of time before flying object and fan meet, so Revenue would be exposed to very negative comment, negligently allowing this occur, etc., over a prolonged period of time. So yes, they would be very interested.

Perhaps. All revenue are interested is in collecting the taxes due at the minimum cost to themselves. If the taxes are being paid on time and there is no reason to believe that they are calculated incorrectly it is unlikely that they will undertake an intervention for this reason alone. The directors/shareholders are in any case personally liable for the arrears so there is nothing to be gained by them shutting them down and everything to be gained giving the guy the time to sort his business out.

In fairness we know nothing about this person other then they allowed the company to be struck off. Perhaps he could not afford the accountants fees and decided to put the resources elsewhere to better use...Who knows!

But the end justifies the means and he has survived and is still providing employment to people. There is nothing to say he is defrauding creditors, not paying his staff etc. He clearly has more important things to worry about.

He needs to just form another company and regularise everything again with staff etc. Its not that difficult a problem to solve and there are worse ones to have.

dbran

GLC

dbran wrote: »

Perhaps. All revenue are interested is in collecting the taxes due at the minimum cost to themselves. If the taxes are being paid on time and there is no reason to believe that they are calculated incorrectly it is unlikely that they will undertake an intervention for this reason alone. The directors/shareholders are in any case personally liable for the arrears so there is nothing to be gained by them shutting them down and everything to be gained giving the guy the time to sort his business out.

In fairness we know nothing about this person other then they allowed the company to be struck off. Perhaps he could not afford the accountants fees and decided to put the resources elsewhere to better use...Who knows!

But the end justifies the means and he has survived and is still providing employment to people. There is nothing to say he is defrauding creditors, not paying his staff etc. He clearly has more important things to worry about.

He needs to just form another company and regularise everything again with staff etc. Its not that difficult a problem to solve and there are worse ones to have.

dbran

I do not believe he is out to defraud anyone, he depends on the company just as we do, we are almost always paid on time, very seldom it could be a day or two late, understand that, as long as we get it there's no grievance there.

My main issue to begin with was with regards to my years served previous to the company being dissolved with regards to redundancy payments, pensions etc if the worst did come to the worst, the transfer of employment was a confusing matter as I wasn't sure if it was a simple and straightforward situation when no new company was set up.

barneystinson

pedroeibar1 wrote: »

For starters Revenue would have an interest in the legal standing and correct nature of any entity with which they are dealing. It’s basic to any contract and called due diligence. If a business is so crooked that it would trade fraudulently, the odds are high that its tax affairs are not correct either. If what the OP has written is true/correct, it is only a matter of time before flying object and fan meet, so Revenue would be exposed to very negative comment, negligently allowing this occur, etc., over a prolonged period of time. So yes, they would be very interested.

Revenue's Mission statement:
'To serve the community by fairly and efficiently collecting taxes and duties and implementing Customs controls.'

Doesn't say anything about policing company law. They want to get the right amount of tax, at the right time, and if they're getting that then they're happy. If they're not, then they'll be happy to have recourse to individuals if the company has traded fraudulently.

pedroeibar1

In fairness to the OP I have been sent the name of the entity in question. Let’s call it ABC.

It has been around for yonks as ABC Ltd., diligently made its Annual Return, usually in compliance with its ARDate, and then ‘stopped’ some years ago. It has a good website, no mention of ‘limited liability’ anywhere, and in its PR is using its former name of ABC without mention of ‘Ltd’ or Limited’ anywhere.

I infer from this that the original company ABC Ltd. was voluntarily wound up (but that’s not obvious from a quick look in Iris Oifigiul) and the trading activity taken on by the owners trading as ABC. (Note – it has not registered ABC as a business name.)

So, GLC, there is nothing to prevent the business trading as ABC once the word ‘Ltd.’ is kept out of the picture. Leaving it on an old van is not a very good idea, but not serious. As the ‘change’ to plain ABC happened some years ago either the Revenue or the Bank would have picked it up by now if anything ‘funny’ was going on. My guess is that they have been informed.

It is becoming more frequent for companies to go ‘unlimited’ as they often wish to hide their financials. This is becoming increasingly common in the retail supply sector.

GLC - your employment rights need to be clarified by a professional, (particularly pension rights if they involve a contributory pension.) I do not know if TUPE works on transfer of employment from a Ltd entity to a sole trader situation. It was poor HR management not to inform the staff as to what was going on.
Hope that clears it up.

pedroeibar1

barneystinson wrote: »

Revenue's Mission statement:
'To serve the community by fairly and efficiently collecting taxes and duties and implementing Customs controls.'

Doesn't say anything about policing company law. They want to get the right amount of tax, at the right time, and if they're getting that then they're happy. If they're not, then they'll be happy to have recourse to individuals if the company has traded fraudulently.

Not interested in having that type of argument:rolleyes:

barneystinson

pedroeibar1 wrote: »

Not interested in having that type of argument:rolleyes:

What type of argument?!

Show me where, anywhere in the tax acts, or in Revenue's tax & duty manuals, it says that Revenue will act against a struck off company, other than where it suits them, or they need to, for the purpose of collecting liability?

You can roll your eyes all you want.

GLC

Thanks pedroeibar1 for looking into this for me, and to everyone else who has provided me with information and advice, greatly appreciated. I shall look to have my employment rights clarified with a professional and see how that goes.

Regards,

GLC

pedronomix

In my view, your service has been continuous and your rights have been preserved, you do not need to have this in writing to maintain them, the law protects you. If you have balancing statements for each year from Revenue, you can take it that your employer is dealing properly with your tax/prsi etc. I assume you are issued with proper detailed payslips weekly/monthly as appropriate.You would be wise to keep these safely, just in case things go bad. It does not appear that you should be overly concerned about the propriety of your employer but more about his ability to keep it all going. Going balls out to have Revenue confirmation that all is in order could precipitate very close Revenue inspection of your employer and if times are presently tough this could end unfavourably for all! Just make haste slowly and quietly make sure that the issues that relate to you are generally in order. As it is now an unlimited/sole trader operation, the boss-man is personally responsible for your entitlements, but ( and this is for Pedroeibar) at the end of the day you can't get feathers from a frog!!

pedroeibar1

pedronomix wrote: »

.......but ( and this is for Pedroeibar) at the end of the day you can't get feathers from a frog!!

Agreed, particularly when the wool has been pulled over its eyes!:p:)

jcon1913

pedroeibar1 wrote: »

For starters Revenue would have an interest in the legal standing and correct nature of any entity with which they are dealing. It’s basic to any contract and called due diligence. If a business is so crooked that it would trade fraudulently, the odds are high that its tax affairs are not correct either. If what the OP has written is true/correct, it is only a matter of time before flying object and fan meet, so Revenue would be exposed to very negative comment, negligently allowing this occur, etc., over a prolonged period of time. So yes, they would be very interested.

I dont think you have any experience in this, do you?

In my experience Revenue couldnt care less, as long as taxes are paid. I dont know why but they ignore strike-offs.

We're a great little country for passing laws and ignoring them.