Friel Stafford > Liquidation


Liquidation is a process whereby once a Company is placed into liquidation the liquidator undertakes the following duties: Secures books, records and assets of the liquidation. Process employee claims. Investigates reasons for the collapse. Sells asset. Submits report to the Office of the Director of Corporate Enforcement. Agrees claims of creditors. Pays dividends to creditors if asset realisations are sufficient

There are three types of Liquidation procedures: Creditors Voluntary Liquidation, High Court Liquidation and Members Voluntary Liquidation.

Creditors’ Voluntary Liquidation is usually initiated by the Company’s directors. The first step is for the board of directors to have a board meeting to agree that the Company should be placed into liquidation and that notices should be sent to shareholders and creditors.

A Members’ Voluntary Liquidation winds up solvent companies, and distributes surplus funds back to shareholders. High Court Liquidations are generally initiated by creditors seeking payment from insolvent companies.

Calling the Creditors’ Meeting

In a Creditors Voluntary Liquidation, a creditors meeting must be held. The 2014 Companies Act states that ten days’ notice of the meeting must be given to all creditors. The notice sent to creditors should be accompanied by a general proxy and a special proxy in the prescribed format, together with details of the proposed liquidator and the names and addresses of the creditors.

The 2014 Companies Act also provides that the meeting must be advertised at least ten days before the meeting in at least two daily newspapers “circulating in the district where the registered office or principal place of business of the Company is situate”.

Between the date of the Board decision to liquidate and the date of the creditors  meeting there are certain steps the Company should take. Please click on the following link for further information on those steps: Preparing a Company for Liquidation.

Agenda for the Creditors’ meeting

A director’s guide to creditors meetings.

A creditors’ guide to a creditors meetings

A typical creditors’ meeting has three main items of business. These are:

  • To present a Statement of Affairs to the creditors.
  • To give the creditors an opportunity to appoint their choice of liquidator.
  • To give creditors the opportunity to appoint a Committee of Inspection

Statement of Affairs

Under the 2014 Companies Act, the directors of the Company placing a company into liquidation are obliged to present a Statement of Affairs. The Statement of Affairs generally shows the book value of the Company’s assets together with their realisable value. The Statement of Affairs should also have a list of the Company’s creditors and the amount of each claim. The statement is prepared to a date close to the liquidation date.

What is the role of a Committee of Inspection?

The Committee of Inspection is made up of members and creditors and their function is to assist the Liquidator when requested, approve fees and legal actions and attend meetings to review the course of the Liquidation. Given the vital roles given to Committees of Inspection in the 2014 Companies Act, many liquidators now actively seek to have a Committee appointed.

What happens when a liquidator is appointed?

Once a Company is placed into liquidation the liquidator undertakes the following duties:

Liquidation is a legalistic technical process which requires a high level understanding of the Companies Act 2014

WE set out below some of the critical provisions of the Companies Act 2014

Summary Approvals Procedure 

May be used for following:

  • Financial assistance for acquisition of own shares
  • Loans to directors
  • Reduction of Capital
  • Variation of Capital
  • Mergers
  • Solvent Voluntary Liquidation
  • Pre-acquisition reserves
  • Declaration by directors for each restricted activity
  • Accountant’s report for certain activities

Section 429 & Section 436 (S.317 & S. 107) Notification that Receiver has been appointed

  • Emails and websites must contain a statement that a receiver has been appointed
  • Still necessary to advertise in Iris Oifigiuil, but no longer necessary to advertise in one daily newspaper

Section 437 (S.316) Receiver’s Powers 

  • Receiver’s powers are enumerated in legislation for the first time
  • Section 437 (1) states that the receiver has the power to do “in the state and elsewhere all things necessary or convenient to be done for, or in connection with or incidental to the attainment of the objectives for which the receiver was appointed”
  • Section 437 (3) lists out 20 powers: usual suspects of taking control, borrow money, carry on business, engage/discharge employees, appoint professional advisors, issue legal proceedings etc.
  • However, Section 437 (4) recognises that it is possible that the receiver’s powers may be limited by the court or “the instrument under which the receiver was appointed” and states that s 437 (1) and (2) are subject to such provisions “being a provision that limits the receiver’s powers in any way”

Section 439 Connected Party Sale by Receiver

  • 14 days’ notice required if sale is to a person who was a director within the previous 3 years.  “Non –cash asset” and “requisite value” are defined in Section 238.: “its value is not less than €5,000 but, subject to that, exceeds €65,000 or 10% of the relevant company’s assets.”

We can provide expert advice on how to structure an offer to buy assets or a business from a Liquidator or Receiver.

Section 450 (201) Schemes of Arrangement

Now possible to just have one court hearing instead of three.

  • Scheme meetings may be convened by the Board of Directors
  • Directors may advertise outcome of scheme meetings and court hearing to approve the scheme.

s.453(4) is a new provision (which already exists for examinerships) which allows State Authorities to vote in favour of schemes, thus removing any doubt as to whether they would be acting ultra vires.

Some companies may prefer to attempt a Scheme of Arrangement for a number of reasons, including less cost and less loss of control.

Section 561 Modes of Winding up 

The legislation aims to streamline the provisions  on the three types of liquidation: Creditors Voluntary Liquidation, Members Voluntary Liquidation and High Court Liquidation.

The winding up of a company may be:

  1. by the court; or
  2. voluntary.

Section 569 (S.213) Circumstances in which company may be wound up by the court

  • New sub- section: “if the court is satisfied on a petition of the Director that it is in the public interest that the company should be wound up”.
  • Once a Company is wound up by Order of the Court, the liquidation is carried out as a Creditors Voluntary Liquidation. This change will make High Court liquidations considerably cheaper.

Section 570 (S.214) Circumstances in which Company deemed to be unable to pay its debts

  • Minimum sum of €10,000 not paid within 21 days
  • Or, if 2 or more creditors owed more than €20,000 not paid for 21 days
  • As High Court liquidations will be cheaper to do, we should see an increase in High Court petitions, as the indemnities to liquidators should be much more affordable.

The above monetary limits have been increased during the Covid Emergency Period. Please call us for further details.

Section 579 Commencement of a MVL

  • Must use the Summary Approvals Procedure unless the winding up is:
  • In the expiry of the period fixed in the constitution of the company; or
  • To occur on the happening of a certain event as set out in the constitution of the company (These exceptions can use the “old” procedure or may also use the Summary Approvals Procedure.)

Section 587 (S.266) Meeting of Creditors (CVLs)

The Notice shall:

  • State the date, time and location of the meeting
  • State the name and address of the proposed liquidator, if any
  • Attach a list of the creditors of the company OR notify creditor of his rights to inspect the list of creditors

A Creditor may, with 24 hours’ notice, inspect the list of creditors at the registered office OR request the company to deliver a copy of the list of creditors.

Section 595 Notification that a Company is in Liquidation etc.

Websites and emails shall contain a statement that the company is being wound up (prominent place on website)


Section 617 (S.281) Costs, etc.

New cost inserted “Any cost and expenses necessarily incurred in connection with the summoning, advertisement and holding of a creditors’ meeting under Section 587

Accordingly, fees due to professional advisors for organising creditors meetings and which were previously disallowed following the Compustore Ltd case are now allowed as an expense.


Section 629 (S.231 & S.276) Notice to be given with respect to exercise of powers

  • The liquidator shall, within 14 days of exercising any of the following powers
  • Take any legal proceedings
  • Defend any legal proceedings
  • Recommence the business
  • Continue the business
  • Appoint a legal practitioner
  •  Pay any class of creditors in full, compromise debts etc.
  • In a Creditors Voluntary Liquidation or court liquidation, notify the Committee of Inspection. If no Committee, notify the creditors
  • In a Members Voluntary Liquidation, notify the members
  • The liquidator or any member of the committee of inspection shall not, directly or indirectly, purchase any part of the company’s property unless prior sanction has been obtained from the committee or the creditors.  The costs of obtaining such sanction shall be paid by the purchaser.

Section 666 (S. 232) Appointment of a committee of inspection in court ordered winding up

  • If more than one liquidator is appointed the court or meeting may resolve how joint liquidators are to perform, if not resolved, those things may be performed by not less than 2 of them

 Section 668 (S. 233)  Constitution and proceedings of committee of inspection

Similar provisions as before.  However, two new significant subsections:

(9) A member of the committee shall not make a profit from the winding up, except with the leave of the court or the sanction of –

  (a) in the case of a members’  voluntary winding up, a resolution of the company, or

  (b) in the case of a creditors’ voluntary winding up, a resolution of the creditors of the company.

(10) At a meeting of creditors, a resolution shall, for the purposes of this section (other than subsection (9)(b)), be deemed to be passed when a majority in number of the creditors present personally or by proxy and voting on the resolution have voted in favour of the resolution.

Watch out for S.701 “no person appointed as a proxy shall vote in favour of any resolution which would directly/indirectly place himself to receive remuneration out of the assets of the company.

Watch out for confusing rules on creditors’ voting thresholds at creditors meetings

  • 588 (Voting on appointment of liquidator at a creditors meeting) Voting is by majority in value.
  • 668 (Constitution of Committee of Inspection) Voting thresholds depend on resolution: may be either majority in number and value or majority in number of creditors
  • S.695 (Passing resolutions) Voting threshold is majority in number and value (except for votes on choice of liquidator, removal of liquidator or certain resolutions relating to constitution of committee.)
  • By a process of logical deduction: voting on liquidator’s remuneration by creditors is done by a majority in number and value.

Section 680 Duty of Liquidator to call meeting at end of each year

Must summon a Committee of Inspection. If no Committee, a meeting of the creditors. (Major change: annual meetings of creditors may not be necessary.)

Section 681 Information about progress 

Forms E4 (Liquidator’s affidavit) now required after just 1 year and then every 6 months. (Previously 2 years and every 6 months in a Creditors Voluntary Liquidation.)

Section 700 Duties of Chairperson

Chairperson of a meeting shall keep minutes of the meeting (previously this stipulation was contained in the rules of the Superior Courts)

Section 705 (S.263) Final Meeting in a MVL

  • 28 days’ written notice to the members
  • No statutory advertisement

Section 705 (S. 273) Final Meeting in a CVL

  • 28 days’ written notice to members and creditors
  • No statutory advertisement

Section 707 (S.305) Disposal of Books & Records

Must retain books and records for a minimum of 6 years after dissolution (previously 3 years)

Section 819 Restrictions & Disqualifications of Directors

  • Minimum share capital amounts increased to €500,000 for a PLC and €100,000 in the case of any other company.
  • New restrictions on company having a “restricted” person from acquiring certain non-cash assets unless certain conditions are satisfied.
  • Directors may avoid a court appearance by giving an undertaking to ODCE that they will allow themselves to be disqualified. (Possible savings in legal costs.)

The passing of the Companies (Miscellaneous Provisions)( Covid 19)  Act 2020 now allows virtual meetings of creditors to take place. We are experienced in using various video conferencing facilities such as Zoom or Teams to hold such meetings.

How Can We Help?

We understand that liquidations are very stressful for people. We can help remove some of the stress by explaining the process and advising you on how to fully prepare yourself for the liquidation. We can expertly deal with all issues, including employee claims. We can advise on all the necessary steps to place a Company into a liquidation. We can also act as liquidators. We have extensive experience of all types of liquidations (from companies limited by guarantee to Public Limited Companies) and also experience of all types of industry ranging from construction, hospitality, to services and manufacturing.

We provide a free consultation to directors seeking advice on their options for dealing with insolvent companies.

Why do accountancy firms/Solicitors refer their clients to us for liquidations and other services?

We have become one of the leading insolvency practices in Ireland by being trusted by accountancy firms/solicitors with their clients. We set out below the factors behind our success.


We have been appointed as Liquidators/Receivers and Examiners to over 1,000 companies across a range of industries. Our experience means that we know what pitfalls to avoid, and enables us to organise all liquidations professionally.


We are acknowledged experts in our field. We regularly present training courses on insolvency for CAI, ACCA  and CPA.


We are trusted by creditors to maximise realisations from property and asset sales, and to maximise recovery of debtors. We are particularly strong on debt collection. Indeed, over the years we have provided Debt Collection courses to over 3,000 credit managers. (See our affiliated web site


Unlike larger firms, accountants/solicitors and their clients will be dealing directly with an experienced Practitioner, before and after any appointment, and not with some delegated junior staff member.


As General Practitioners, we understand that accountancy firms/solicitors may have lost a valuable client if it goes into liquidation.  We understand the subtlety of the relationship that exists between accountancy firms/solicitors and their clients.


We do not seek out press coverage for our work before or after any appointment. We recognise that the liquidation of a company can be a traumatic event for its directors.


Because we have conducted so many cases our teams are very experienced.


We conduct our work in a transparent way so that accountancy firms/solicitors and their clients will know the principles that we work under from the start.


If required a fixed fee arrangement can be discussed and  agreed in advance.

We do not poach clients 

We provide a guarantee that we will not offer audit or tax services to any client that is referred  to us.

For further information, or a free fee quotation, please contact Jim Stafford, Tom Murray or Andrew Hendrick on 01 661 4066 or 

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