The members of a company can decide to wind it up by creditors voluntary liquidation. If by continuing to trade a company would cause loss to its’ creditors, then the directors are duty bound to commence the winding-up process.
The directors commence the winding up process by calling a meeting of the company’s members, and a meeting of the company’s creditors. The winding-up commences when the members resolve to wind-up the company. The members may also nominate a liquidator.
The directors are obliged to appoint one of their number to be chairman at the meeting of the company’s creditors, and to lay a statement of the company’s affairs before the meeting. The chairman of the meeting should deliver a brief report on the company’s circumstances and answer any questions asked. The company’s creditors may appoint a liquidator, who will replace a liquidator appointed by the company’s members.
The winding-up process is completed by the liquidator, who is supervised by the company’s creditors, or by a committee of inspection if one is appointed. A committee of inspection may be appointed by the company’s members and creditors.
The liquidator arranges for the company’s assets to be sold, and for the proceeds to be paid to the creditors in order of priority. The liquidator also makes the company’s employees redundant and arranges for certain amounts due to them to be paid from a fund operated by the Department of Social Protection.
The liquidator is obliged to report to the Director of Corporate Enforcement on the company’s circumstances, and whether the directors acted honestly and responsibly in the conduct of the company’s affairs.
We have extensive experience of advising directors on preparing to wind up insolvent companies, and of acting as liquidator. We would be pleased to advise and assist directors of companies that are considering winding-up in this way.