Conduct of Winding Up

Part 11 – Winding Up

The winding up of a company is usually deemed to commence at the time of the presentation of the petition. This rule is re-enacted here (Section 589) and was previously set out in Section 220 of the 1963 Act.

The effect of this rule is that any transactions that took place after the petition was presented, and before the order was made by the Court, will be avoided.

The one exception to the rule that the winding up of a company is usually deemed to commence at the time of the presentation of the petition, is in the case of a voluntary winding up. In those cases, the winding up is deemed to begin when the resolution to wind up is passed.

When the winding up order is made, the Court will direct an officer of the Court to furnish the Registrar with the particulars of the order. Also, certain parties may be entitled to receive the order. This is set out here (Section 591) and the rule used to be found in Order 74 Rule 22 of the Rules of the Superior Courts.

Subsection (2) is new. Previously it was the liquidator who had to serve notice of her appointment on the Registrar (where the winding up was a court one); now it is the Court.

Where the winding up is a voluntary one, it is still the liquidator who must serve notice of her appointment on the CRO; this must be done within 14 days of her appointment. (Section 592).

If the Court has appointed a provisional liquidator to the company, the Court will usually order that a statement as to the affairs of the company be made. This must be verified by affidavit. What the statement must contain is set out here (Section 593). Usually one or more of the directors must swear the verifying affidavit.

This statement must be filed within 21 days.

The new element is that the statement must be filed with the Registrar and not with the Court.

There is also a new rule – Section 594(4) – which says that if the liquidator makes a request for information in connection to the statement of affairs, and this is not complied with by a person, the liquidator can apply to Court and the Court can direct that person to comply. Failure to comply after this point will leave a person open to a €5,000 fine.

The rules in relation to notification of a company being in liquidation are the same – but augmented. They derive from Section 303 of the 1963 Act and still state that every invoice, business letter, etc, must contain a statement that the company is being wound up. The new addition is that any website of a company in liquidation and any e-mail sent to a third party by the company, must also say this. (Section 595)