Section 819 of the Companies Act 2014 (2014 Act) relating to the restriction of directors of insolvent companies has recently been amended as a result of the commencement of the Companies (Corporate Enforcement Authority) Act 2021 (CEA Act).
Section 34 of the CEA Act has added additional grounds for application to court by the Corporate Enforcement Authority (CEA), a Liquidator or a Receiver to restrict a director including failure by a director of an insolvent company to:
- convene a general meeting of shareholders for the purpose of nominating a named Liquidator,
- table a notice to nominate such Liquidator, or
- provide the required notice to employees of the company in the winding up of the company.
Some of these changes were brought about by a Company Law Review Group report in 2017 on the protection of employees and unsecured creditors. These changes were recommended to address difficulties where directors do not put a company into liquidation or walk away without a Liquidator being appointed.
Additional insolvency-related changes to the 2014 Act, following the commencement of the CEA Act, include:
- the CEA has power to request evidence from a person that they are qualified to act as Liquidator of an Irish company (section 32 CEA Act);
- restoration of the obligation to file resolutions with the CRO in a creditors' winding-up (section 31 CEA Act); and
- if a liquidation is not concluded within 12 months after commencement, a Liquidator may be required to file more frequent reports to the CRO on the progress of the liquidation (section 33 CEA Act).
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