The Companies Registration Office is issuing more Strike Off notices having tightened up its compliance regime, and any companies which are now more than one year late in filing their statutory returns may be listed for strike off.
The directors of a company may be tempted to believe that once a company is struck off by CRO that they do not have to deal with the liabilities of the company. Such a perception can be costly for the directors.
If a company becomes insolvent, the directors are obligated to place the company into Liquidation and convene a creditors meeting. If a creditors meeting is convened, then the creditors are given the opportunity of having their queries answered, and of closing their files on the matter.
If a company does not go into Liquidation, but is struck off, then its creditors are likely to be irritated by the company’s conduct. Such creditors can apply to have the company restored and to appoint a liquidator through the High Court. .
Directors should also note that they will automatically be targeted by CRO for individual prosecution as a result of their failure to file returns.
Employees of an insolvent company which has been struck off will be unable to obtain payment for arrears of wages, holiday pay, minimum notice or redundancy from the Department of Social Protection. While the Department will normally pay such monies to employees of insolvent companies, they will only make payment if the claims are submitted by a company which is currently registered with CRO, or if the claims are submitted by an Insolvency Practitioner.
If the company is solvent then the directors may consider placing the company into a Members Voluntary Liquidation. (A MVL may be cheaper then paying audit fees and late filing fees.) We are happy to provide a free fee quotation to do a MVL.
If the company is insolvent then the directors need to consider a Creditors Voluntary Liquidation.
For further information please contact Jim Stafford , Tom Murray or Andrew Hendrick on 01 661 4066 or jim.stafford@frielstafford.ie or tom.murray@frielstafford.ie andrew.hendrick@frielstafford.ie