Company Administration in Case of Insolvency
Company Administration in Case of InsolvencyUpdated on Friday 12th October 2018
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The procedures regarding the insolvency of Irish legal entities are given by the Companies Act 2014, Bankruptcy Act 2015, Courts and Civil Law Act 2013 and other legal sources. Insolvent companies in Ireland can enter several legal procedures, provided that they haven’t reached an arrangement for their financial issues with their creditors.
Some of the main actions taken by a company in Ireland that deals with insolvency are liquidation, receivership, examinership, merger and division and reorganization the company’s structure. Regardless of the legal procedure that the company will enter, the administration of the company has to be completed following specific regulations, and our team of lawyers in Ireland can offer legal assistance on this matter.
Company administration during liquidation in Ireland
If the company will enter the liquidation procedure, it is compulsory to appoint a liquidator who will be able to administer the company. The respective person will assess the value of the company’s assets and will distribute such assets amongst the company’s creditors. The members of the company are also entitled to receive financial benefits in this case, but only in the situation in which the creditors are paid and if there results a financial surplus. Other aspects will apply, as follows:
- • the liquidation procedure has to be supervised by a committee of inspection, as required by the regulations of the Companies Act 2014;
- • the committee must have a maximum of eight members, and the majority of the committee will be represented by the company’s creditors;
- • the liquidator is obliged to provide regular reports to the committee during the liquidation procedure;
- • the liquidator is also the entity that will handle the legal procedures regarding any contracts signed by the company.
Who is in charge during the examinership procedure in Ireland?
In the case of the examinership procedure, the High Court or the Circuit Court will be constantly involved during the process. However, in this case, the company’s directors will be able to perform their duties and maintain their positions within the company; our team of Irish lawyers can provide more details regarding this procedure.
In this case, an examiner will be appointed, who will analyze the company’s financial documents and who will be in charge with finding solutions to cover the company’s financial crisis. Businessmen are invited to contact our law firm in Ireland for legal advice on other matters concerning the above mentioned procedures.