There are two ways of initiating a members’ voluntary winding up.
The first is to use the new Summary Approval Procedure (set out here – Section 202).
Alternatively, it can be commenced following the provisions of Section 580, if (1) the company constitution fixed an expiry period to the life of the company or (2) if the company’s constitution has stated that a certain event will lead to the company’s dissolution and that event occurs.
If the alternative applies, the members must pass a resolution in a general meeting. The directors must declare that they have made “a full inquiry into the affairs of the company” and have formed the opinion that it will be able to meet its liabilities in full, within a period of 12 months after the commencement of the winding up. The full set of requirements that must be complied with is set out here (Section 580). Of the provisions set out, only subsection (6) is new.
Where a company passes a resolution to voluntarily wind itself up it must advertise the resolution in Iris Oifigiúil within 14 days of passing the resolution (Section 581). Failure to do this leaves defaulting officers open to fines of €5,000 (and the liquidator is deemed to be an officer of the company for the purpose of this section).
Where a declaration of solvency is made by the directors, creditors must be protected in case that declaration was made without good foundation. That protection comes in the form of Section 582. The section allows the voluntary winding up to be converted into a creditors’ winding up. The applicant creditor(s) must represent at least one fifth of the value of the creditors of the company.
If at any time in the course of the members’ voluntary liquidation, the liquidator thinks that the company will not be in a position to pay its debts in full – within the time specified in the directors’ declaration – then she must call a creditors’ meeting. The steps that need to be followed are set out here (Section 584). The section is a re-enactment of the old Section 261 of 1963.