The duties of liquidators are set out in a new section, Section 624.
The powers of liquidators was set out in Section 231 of the 1963 Act. They are now found here (Section 627), and are set out in a table.
The powers of liquidators – and the restrictions on those powers – are the same in all three types of winding up, with one exception: a creditors’ winding up before the first meeting of creditors.
The powers of provisional liquidators are set out here (Section 626). They are to be set by the Court, i.e. they are no longer automatically the same as a non-provisional liquidator. The new idea is that, while still fulfilling his duties, the provisional liquidator should have as little impact on the running of the company as possible.
Also new is the fact that previously, the Companies Acts said nothing about the extent that a provisional liquidator’s powers would replace or overlap with the directors’ powers. Now the Court is expressly allowed to place “such limitations and restrictions” on the directors’ powers as it thinks fit.
New: Liquidators now require professional indemnity insurance to be qualified as liquidators.
The liquidator’s power to summon general meetings is stated here (Section 628). The law is unchanged, but implicit assumptions in the old regime are explicitly spelled out – such as the power to summon meetings of members, of creditors, or of the committee of inspection, if there is one.
Section 629 states the rule that the liquidator must give notice to the relevant stakeholders within 14 days after the exercise of certain of the powers in the Section 267 Table (powers in relation to running the company, legal proceedings, paying certain creditors, and compromising claims).
The old requirement for court sanction for the exercise of these powers – under Section 231(1) of the 1963 Act – has been done away with. Also discarded is that parallel requirement in relation to voluntary windings-up (which was contained in Sections 276(1)(a) of 1963).
If compliance defaults are made in a creditors’ voluntary winding up, by either the company or the directors, the liquidator must apply to Court for directions. This is set out in Section 630 and is a re-enactment of Section 131 of CA 1990.
A number of parties may apply to Court to determine a question arising out of the winding up. This is a new section and those parties are set out here (Section 631).
The rule that no person is entitled to without possession of any company documents from the liquidator, by claiming that money is owed to them by the company and they therefore have a lien over those documents, is re-enacted here (Section 632).
This is a re-enactment of Section 244A of the 1963 Act.
New: Previously, the rule applied to court-ordered and creditors’ voluntary liquidations. Now it applies to members’ voluntary liquidations too.
New: the penalty for contravention of this section is a €5,000 fine.
The new Act makes this significant change: persons must be qualified to act as liquidators.
The section (Section 633) sets out 5 categories of person who may be a liquidator.
1. A member of a prescribed accountancy body.
2. A practising solicitor.
3. A member of another professional body recognised by the Supervisory Authority (“IAASA”).
4. A person qualified under the laws of another EEA State.
5. A person with practical experience of windings-up and knowledge of the relevant law, who applies to the Supervisory Authority within two years of the new Act being commenced.
Section 643 is also new and sets out the obligation for liquidators to have professional indemnity cover.
Section 635 sets out five categories of persons who are disqualified from acting as a liquidator. It is a Category 2 Offence to contravene this rule.
New: In every winding up, the liquidator must consent to act (Section 639). Up to now, the consent requirement only applied to voluntary windings up.
In every winding up, a liquidator may resign. The new element to this, is that the liquidator must give notice (Section 643).
Section 637 sets out the procedure which allows the creditors to remove and appoint a liquidator in a creditors’ voluntary winding up. It is new.
The minimum notice period for such a meeting is 10 days’ notice.
Where a person vacates the office of liquidator and no new liquidator has yet been appointed, the former liquidator will retain the company’s seal, books and records until a new liquidator is appointed. This is new.
The provisional liquidator’s remuneration will be fixed by the Court (Section 645). This is new.
The liquidator’s entitlement to remuneration must be fixed as soon as possible after appointment, and the rules in relation to this are set out here (Section 646).
Disputes in relation to remuneration may be referred to arbitration (Section 648).
The power of the Director of Corporate Enforcement to examine a liquidator’s books is significantly increased (Section 653).