Powers
Companies Act
Power of the court to order return of assets which have been improperly transferred
608. (1) The court has the following power where, on the application of a liquidator, creditor or contributory of a company which is being wound up, it can be shown to the satisfaction of the court that—
(a) any property of the company of any kind whatsoever was disposed of either by way of conveyance, transfer, mortgage, security, loan, or in any way whatsoever whether by act or omission, direct or indirect, and
(b) the effect of such disposal was to perpetrate a fraud on the company, its creditors or members.
(2) That power of the court is to order, if it deems it just and equitable to do so, any person who appears to have—
(a) the use, control or possession of the property concerned, or
(b) the proceeds of the sale or development of that property,
to deliver it or them, or pay a sum in respect thereof, to the liquidator on such terms or conditions as the court thinks fit.
(3) This section shall not apply to any conveyance, mortgage, delivery of goods, payment, execution or other act relating to property made or done by or against a company to which section 604 applies.
(4) In deciding whether it is just and equitable to make an order under this section, the court shall have regard to the rights of persons who have bona fide and for value acquired an interest in the property the subject of the application.
(5) This section is in addition to, and not in substitution for, any restitutionary or other relief by way of recovery (including the remedy of tracing) that is available to a liquidator or any other person.
Duty of liquidator to administer, distribute, etc., property of company
624. (1) Subject to subsection (3), it shall be the duty of a liquidator to administer the property of the company to which he or she is appointed.
(2) For the purpose of subsection (1) “administer the property of the company” includes ascertaining the extent of the property of the company and, as appropriate:
(a) the collection and gathering in of the company’s property;
(b) the realisation of such property; and
(c) the distribution of such property;
in accordance with law.
(3) Subject to section 559 (3) to (5), the duties of a provisional liquidator shall be those duties provided in the order appointing him or her or any subsequent order of the court.
How liquidator is to be described and validity of acts
625. (1) A liquidator shall be described by the style of “the liquidator” (or, in the case of a provisional liquidator, “the provisional liquidator”) of the particular company in respect of which he or she is appointed and not by his or her individual name.
(2) Subject to section 621 , the acts of a liquidator shall be valid notwithstanding any defects that may afterwards be discovered in his or her appointment or qualification.
Powers of provisional liquidators
626. (1) Where a provisional liquidator is appointed by the court, then, subject to section 559 (3) to (5), the provisional liquidator has such powers as the court orders.
(2) Where a provisional liquidator is appointed by the court, the court may place such limitations and restrictions upon the powers of any other officers of the company as it thinks fit.
Liquidator’s powers
627. The liquidator shall have the powers set out in each of the paragraphs of the Table to this section.
Table
Legal proceedings, carrying on company’s business, etc.
1. Power to—
(a) bring any action or other legal proceeding in the name and on behalf of the company;
(b) defend any action or other legal proceeding in the name and on behalf of the company;
(c) recommence and carry on the business of the company so far as may be necessary for the beneficial winding up thereof, where such business was not continuing at the date of the appointment of the liquidator or had ceased after such appointment;
(d) continue to carry on the business of a company so far as may be necessary for the beneficial winding up thereof, where such business was continuing at the date of the appointment of the liquidator and had not subsequently ceased;
(e) appoint a legal practitioner to assist the liquidator in the performance of his or her duties.
Payment of certain creditors, compromise of certain claims, etc.
2. Power to—
(a) pay any classes of creditors in full;
(b) make any compromise or arrangement with creditors or persons claiming to be creditors or having or alleging themselves to have any claim present or future, certain or contingent, ascertained or sounding only in damages against the company, or whereby the company may be rendered liable;
(c) compromise—
(i) all calls and liabilities to calls, debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, ascertained or sounding only in damages, subsisting or supposed to subsist between the company and a contributory or alleged contributory or other debtor or person apprehending liability to the company; and
(ii) all questions in any way relating to or affecting the assets or winding up of the company,
on such terms as may be agreed, and take any security for the discharge of any such call, debt, liability or claim and give a complete discharge in respect of it.
Ascertainment of debts and liabilities, sale of property, etc.
3. Power to—
(a) ascertain the debts and liabilities of the company;
(b) sell the property of the company by public auction or private contract, with, for the purposes of this subparagraph, power to—
(i) transfer the whole of the property to any company or other person;
(ii) sell the property in lots,
and, for the purpose of selling the company’s land or any part of it, to carry out such sales by grant, conveyance, transfer, lease, sublease, or otherwise, and to sell any rent reserved on any such grant or any reversion expectant upon the determination of any such lease.
Execution of certain documents, drawing of negotiable instruments, etc.
4. Power to—
(a) do all acts and to execute, in the name and on behalf of the company, all deeds, receipts and other documents, and for that purpose to use, when necessary, the company’s seal;
(b) draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the company, with the same effect with respect to the liability of the company as if the bill or note had been drawn, accepted, made or endorsed by or on behalf of the company in the course of its business.
Proving claim in the case of contributory’s bankruptcy, etc.
5. Where any contributory has been adjudicated bankrupt or has presented a petition for arrangement with his or her creditors in pursuance of the Bankruptcy Act 1988 , power to—
(a) prove, rank and claim in the bankruptcy or arrangement for any balance against the contributory’s estate; and
(b) receive dividends in the bankruptcy or arrangement in respect of that balance,
as a separate debt due from the bankrupt or arranging debtor, and rateably with the other separate creditors.
Obtaining of credit.
6. Power to obtain credit, whether on the security of the property of the company or otherwise.
Taking out letters of administration, otherwise obtaining payment from contributory or debtor, etc.
7. Power to—
(a) take out in the liquidator’s name (that is the liquidator’s name as it is to be styled under section 625 ) letters of administration to any deceased contributory or debtor; and
(b) do in the liquidator’s name (that is the liquidator’s name as it is to be so styled) any other act necessary for obtaining payment of any money due from a contributory or debtor or his or her estate which cannot be conveniently done in the name of the company,
and, in all such cases, the money due shall, for the purpose of enabling the liquidator to take out the letters of administration or recover the money, be deemed to be due to the liquidator himself or herself.
Security for costs and appointment of agents.
8. Power to—
(a) give security for costs in any proceedings commenced by the company or by the liquidator in the name of the company;
(b) appoint an agent to do any business which the liquidator is unable to do or that it is unreasonable to expect the liquidator to do, in person.
Custody and control of property and disposal of perishables, etc.
9. Power to—
(a) take into his or her custody or under his or her control all the property to which the company is or appears to be entitled;
(b) dispose of perishable goods and other goods the value of which is likely to diminish if they are not immediately disposed of;
(c) do all such other things as may be necessary for the protection of the company’s property.
Residual power.
10. Power to do all such other things as may be necessary for winding up the affairs of the company and distributing its property.
Summoning general meetings of the company, etc.
628. The liquidator may summon—
(a) general meetings of the company,
(b) meetings of the creditors of the company, or
(c) if there is a committee of inspection, meetings of that committee,
for the purpose of—
(i) obtaining the sanction by resolution of members, creditors or the committee of inspection, or
(ii) any other case in which he or she thinks fit to convene such a meeting (and provision for the convening of which by the liquidator is not specifically made otherwise by this Act).
Notice to be given with respect to exercise of powers, restrictions on self-dealing, etc.
629. (1) Subject to subsection (2), where a liquidator exercises any power specified in paragraph 1 or 2 of the Table to section 627 , he or she shall, within 14 days after the date of such exercise, give notice of such exercise—
(a) in the case of a winding up by the court or a creditors’ voluntary winding up, to the committee of inspection or, if there is no such committee, to all of the creditors of the company who are known to the liquidator or who have been intimated to the liquidator, or
(b) in the case of a members’ voluntary winding up, to the members of the company.
(2) In relation to the exercise of a power specified in paragraph 2(b) or (c) of the Table to section 627 , subsection (1) shall not apply if the amount of the claim or call to which the exercise of the power relates does not exceed €500.
(3) Subject to subsection (9), the liquidator of a company shall not sell, by private contract, a non-cash asset of the requisite value to a person who is, or who, within 3 years prior to the date of commencement of the winding up, has been, an officer of the company unless the liquidator has given the following notice.
(4) That notice is at least 14 days’ notice of the liquidator’s intention to do so to all creditors of the company who are known to the liquidator or who have been intimated to the liquidator.
(5) In subsection (3)— “officer”, in relation to a company, includes—
(a) a person connected, within the meaning of section 220 , with a director of the company, and
(b) a shadow director of the company;
“non-cash asset” and “requisite value” have the meanings given to them by section 238 .
(6) Subject to subsection (9), the liquidator or any member of the committee of inspection of a company shall not, while acting as liquidator or member of such committee, either directly or indirectly, by himself or herself or any employer, partner, agent or employee, become purchaser of any part of the company’s property.
(7) Subject to subsection (9), where the liquidator carries on (in either of the 2 cases set out in paragraph 1 of the Table to section 627 ) the business of the company, the liquidator shall not purchase goods for the carrying on of such business from any person whose connection with the liquidator is of such a nature as would result in the liquidator’s obtaining any portion of the profit (if any) arising out of the transaction.
(8) Subject to subsection (9), any purchase made in contravention of subsection (3), (6) or (7) may, on the application of any creditor or contributory of the company, be set aside by the court.
(9) Subsection (3), (6), (7) or (8), as the case may be, does not apply if, prior to the sale or, as appropriate, the making of the purchase, there has been obtained for it the express sanction—
(a) in the case of a winding up by the court or a creditors’ voluntary winding up, of the committee of inspection or, if there is no such committee, a majority in number and value of the creditors of the company who are known to the liquidator or, as the case may be, the officer, former officer or member making the purchase concerned or who have been intimated to the liquidator or, as the case may be, such officer, former officer or member, or
(b) in the case of a members’ voluntary winding up, of a majority in number and value of the members of the company.
(10) The costs and expenses of obtaining the sanction referred to in subsection (9) shall be borne by the person in whose interest such sanction is sought and shall not be payable out of the company’s property.
(11) Without prejudice to the generality of section 559 (4) and (5), where a provisional liquidator has been conferred by an order of the court with any of the powers specified in the Table to section 627 , being a power referred to (whether by express reference to that Table or otherwise) in a preceding subsection of this section, then “liquidator” in that particular subsection includes a provisional liquidator.
Restrictions in creditors’ voluntary winding up and procedures in case of certain defaults
630. (1) This section applies where, in the case of a creditors’ voluntary winding up, a liquidator has been nominated by the company.
(2) Subject to subsection (3), the powers conferred on the liquidator by section 627 shall not be exercised, except with sanction of the court, during the period before the holding of the creditors’ meeting under section 587 .
(3) Subsection (2) does not apply in relation to the exercise of a power specified in paragraph 9 of the Table to section 627 .
(4) The liquidator shall attend the creditors’ meeting held under section 587 and shall report to the meeting on any exercise by him or her of the powers under section 627 or 631 .
(5) If default is made—
(a) by the company in complying with section 587 (1), (2) or (6), or
(b) by the directors of the company in complying with section 587 (7),
the liquidator shall, within 14 days after the relevant day, apply to the court for directions as to the manner in which that default is to be remedied.
(6) In subsection (5), the “relevant day” means the day on which the liquidator was nominated by the company or the day on which he or she first became aware of the default, whichever is the later.
(7) If a liquidator, without reasonable excuse, fails to comply with any provision of this section, he or she shall be guilty of a category 3 offence.
Power to apply to court for determination of questions or concerning exercise of powers
631. (1) Each of the following:
(a) the liquidator or the provisional liquidator;
(b) any contributory or creditor of the company;
(c) the Director;
may apply to the court to determine any question arising in the winding up of a company (including any question in relation to any exercise or proposed exercise of any of the powers of the liquidator).
(2) The court, if satisfied that the determination of the question will be just and beneficial, may accede wholly or partially to such an application on such terms and conditions as it thinks fit or may make such other order on the application as it thinks just.
(3) A certified copy of an order made by virtue of this section—
(a) annulling a resolution to wind up, or
(b) staying the proceedings in a winding up,
each of which orders the court is empowered by this section to make, shall forthwith be forwarded by the company concerned to the Registrar.
(4) If a company fails to comply with subsection (3), the company and any officer of it who is in default shall be guilty of a category 4 offence.
Appointment of committee of inspection in court ordered winding up
666. (1) When a winding-up order has been made by the court, the liquidator may and, if directed to do so by a creditor or creditors representing not less than one-tenth in value of the creditors of the company shall, summon a meeting of the creditors of the company for the purpose of determining—
(a) whether or not a committee of inspection is to be appointed, and
(b) who are to be the members of the committee if so appointed.
(2) At a meeting summoned in accordance with subsection (1), the creditors may, if they think fit, appoint a committee of inspection consisting of not more than 5 persons appointed under this subsection.
(3) If such a committee is appointed the company may, at any time subsequently in general meeting, appoint not more than 3 persons to act as members of the committee, provided that the number of members of the committee shall not at any time exceed eight.
(4) The creditors may resolve that all or any of the persons appointed under subsection (3) by the company ought not to be members of the committee of inspection, and if the creditors so resolve, the persons mentioned in the resolution shall not, unless the court, on application to it, otherwise directs, be qualified to act as members of the committee.
(5) On an application to the court under subsection (4), the court may appoint other persons to act as members of the committee of inspection in place of the persons mentioned in the resolution concerned.
(6) Where a meeting of the creditors or members of the company is being summoned under this section, the notice of the meeting shall indicate who are proposed to be appointed as the members of the committee of inspection by the meeting concerned.
Appointment of committee of inspection in a creditors’ voluntary winding up
667. (1) The creditors of the company at the meeting to be held in pursuance of section 587 , or at any subsequent meeting, may appoint a committee of inspection consisting of not more than 5 persons appointed under this subsection.
(2) If such a committee is appointed, the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint not more than 3 persons to act as members of the committee, provided that the number of members of the committee shall not at any time exceed eight.
(3) The creditors may resolve that all or any of the persons appointed under subsection (2) by the company ought not to be members of the committee of inspection, and if the creditors so resolve, the persons mentioned in the resolution shall not, unless the court, on application to it, otherwise directs, be qualified to act as members of the committee.
(4) On an application to the court under subsection (3), the court may appoint other persons to act as members of the committee of inspection in place of the persons mentioned in the resolution concerned.
Constitution and proceedings of committee of inspection
668. (1) A committee of inspection appointed in pursuance of this Act (the “committee”) shall meet at such times as they from time to time appoint, and the liquidator or any member of the committee may also call a meeting of the committee as and when he or she thinks necessary.
(2) The committee may act by a majority of their members present at a meeting but shall not act unless a majority of the committee is present.
(3) A member of the committee may resign by notice in writing signed by him or her and delivered to the liquidator.
(4) A person’s office as member of the committee becomes vacant if and upon any of the following happening:
(a) the person is adjudicated bankrupt or compounds or arranges with his or her creditors;
(b) the person is absent from 2 consecutive meetings of the committee without the leave of those persons who, together with himself or herself, were appointed as members of the committee by the creditors or, as the case may be, members of the company.
(5) A member of the committee may be removed by resolution at a meeting of—
(a) creditors of the company if he or she was appointed as member of the committee by those creditors, or
(b) the company if he or she was appointed as member of the committee by the company,
being a meeting of which 7 days’ notice has been given and which notice stated the object of the meeting.
(6) Subject to subsection (7), on a vacancy occurring in the committee, the liquidator shall forthwith summon a meeting of—
(a) creditors of the company, or
(b) if the person who vacated office had been appointed by the company, of the company,
to fill the vacancy, and the meeting may, by resolution, reappoint the person who vacated office or appoint another person to fill the vacancy.
(7) If the liquidator, having regard to the position in the winding up, is of the opinion that it is unnecessary for a vacancy occurring in the committee to be filled, he or she may apply to the court and the court may make an order that the vacancy shall not be filled or shall not be filled except in such circumstances as may be specified in the order.
(8) The continuing members of the committee, if not less than 2, may act notwithstanding any vacancy in the committee.
(9) A member of the committee shall not make a profit from the winding up, except with the leave of the court or the sanction of—
(a) in the case of a members’ voluntary winding up, a resolution of the company, or
(b) in the case of a creditors’ voluntary winding up, a resolution of the creditors of the company.
(10) At a meeting of creditors, a resolution shall, for the purposes of this section (other than subsection (9)(b)), be deemed to be passed when a majority in number of the creditors present personally or by proxy and voting on the resolution have voted in favour of the resolution.
The text in italics on this page is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.