A company can be placed into liquidation via three methods, Members Voluntary Liquidation (MVL), Creditors Voluntary Liquidation (CVL) and via Court Order (Official Liquidation). The method chosen depends in the first instance on whether the Company is solvent, or insolvent. Solvent Companies, having achieved whatever targets they were originally intended for will almost always be placed into solvent liquidation. The focus of this document is to assist directors of insolvent companies understand, when in charge of an insolvent company how to instigate the insolvency process and importantly, understand same.

In a CVL the company will be insolvent and not able to meet its current liabilities. To place a company into liquidation via CVL, a members and a creditors’ meeting must be held and a resolution to wind up the company must be passed. The rules applying to this scenario can be found in Section 585 of the Companies Act 2014.

• The creditors’ meeting should be called giving 10 days’ notice to enable all creditors to attend the meeting. Also, an advertisement calling the meeting must be published in two daily newspapers , again giving 10 days’ notice.
• Proxies must be sent together with the letter calling the meeting. If a creditor returns a proxy in favour of someone (e.g. the chairman) they are, legally, giving that nominee the authority to represent them or their company/firm at that specific meeting further allowing them to vote on their behalf on any issue raised at the meeting. This is of most relevance as votes will be counted when appointing a liquidator.
The validity of a proxy is dealt in subsection (5) and (6) of Section 183, which states that the proxy should be deposited at the registered office of the company concerned or at any other place within the State as specified for that purpose in the notice convening the meeting.
The proxy shall be deposited 48 hours (or less if the Company’s constitution permits same) prior the time of the meeting or adjourned meeting at which the person named in the instrument proposes to vote. In case of a poll, the proxy must be deposited 48 hours before the time appointed for the taking of the poll. If those requirements are not met the proxies are deemed to be invalid.
• The directors of the company must provide a statement of affairs and a further list of all the company’s creditors and the estimated amount of their claims to be presented at the meeting. One of the directors must be appointed to preside the meeting, if the company has a sole director, they must preside over the meeting.
• The members meeting must be called prior to the creditors meeting. Both must be held on the same day or in the case of the members meeting the day before at earliest. The decision to wind up the company and appoint a liquidator must be made by the members and confirmed by the creditors later at the creditors’ meeting. The resolution to wind up the company is an Ordinary Resolution and requires 51% of the members’ vote.
• At the creditors’ meeting the creditors have the power to nominate a liquidator of their choice and the votes will be counted according to the weight of their claims , every €1 of debt owed to a creditor equals to 1 vote.
• The creditors also have the option to institute a Committee of Inspection to supervise the liquidation proceedings. From the creditors of the company 5 people can be appointed and from the company members up to a further 3 people can be appointed, the total number of members instituting the Committee of Inspection cannot be more than 8 or less than 2.
• Any liquidator that is nominated to act as Liquidator must provide a written consent to act.
• Within 14 days of the meeting where a liquidator is appointed, an advertisement must be published in the Iris Oifigiuil detailing the resolution passed. Also within 14 days the liquidator has to file with the Companies Registration Office a Form E2 notifying of their appointment as liquidator of the company, Form G2 with the resolution passed at the meeting and Form B2 for change of the company’s address. Those forms must be filed in all liquidation proceedings except in a Court liquidation where no E2 is required. Specifically, in a Court liquidation the central office of the High Court is the entity responsible for forwarding a copy of the wind-up order to the registrar (CRO).

• Require postal redirection of the address from where the company used to trade to the liquidator’s office address.
• Take possession of all the company’s books and records from directors, accountants, auditors and whoever else may hold documents relating to the company.
• Close all the company’s bank accounts and open a post liquidation bank account where any remaining amount should be lodged.
• Liaise with the bank for copy of bank statements for at least the two years prior to liquidation.
• Cease the tax registration numbers of the company with Revenue and request a registration in name of the company in liquidation.
• Write to all creditors notifying that the company is in liquidation advising them to send their claims to the liquidator’s office with the relevant proof of debt.
• Write to all company’s debtors requesting payment.
• Realise all company’s assets which should have been transferred to the liquidator’s custody at the time of their appointment .
• Take possession of all documentation from the company. It is the liquidator’s duty to investigate if the company was being conducted honestly and responsibly. The liquidator will review certain matters such as payments made in preference to other creditors and whether the directors discharged their duties correctly when managing the company.
• If the liquidator forms the view that the directors haven’t acted honestly, the liquidator is obliged to seek the restriction of the directors . A liquidator may form a view that disqualification proceedings are also necessary.

Liquidator obligations to third parties:

• Every six months starting from the date of appointment the liquidator must submit a Section 682 report to the Office of the Director of Corporate Enforcement (ODCE). Whether a liquidator be relieved of their duty to issue restriction proceedings is a decision taken by the ODCE and not the Liquidator.
• Once a year the liquidator shall call a meeting (AGM) where the liquidator acts and dealings will be presented to members and creditors and an update of the liquidation current status will be given.
• On the first-year anniversary of the liquidation a Form E3 and a Form E4 must be filed with the CRO. Subsequently a Form E4 must be filed every 6 months and the Form E3 every 12 months.

Final processes in the liquidation:

Once the liquidator has realised all the company’s assets and all legal proceedings have been dealt with, the liquidation can be finalised and the company dissolved.
• The amount realised must be distributed amongst the creditors in accordance with the order of payments . The liquidator’s fees are paid first above of any class of creditor.
• The liquidation bank account should be closed.
• A final meeting must be called, on this occasion the liquidator will present his accounts reporting how the assets have been realised and how payments to creditors have been made.
• After the final meeting the company should be dissolved at the CRO, a Form E5 and a Form E7 must be filed for that purpose. After three months of submission the company is deemed to be dissolved from the register.
• Books and records from the company should be kept in storage for 6 years after the company has been dissolved. After this period all documents can be destroyed.