Restriction Process
Companies Act
Interpretation and application (Chapter 3)
818. (1) In this Chapter—
“company”, in the context of a provision that imposes a restriction on a company by reference to the fact of its having a restricted person (within the meaning of section 826 ) or otherwise makes provision in consequence of that fact, means any company referred to in section 819 (6);
“director of an insolvent company” means a person who was a director or shadow director of an insolvent company at the date of, or within 12 months before, the commencement of its winding up;
“insolvent company” means a company that is unable to pay its debts;
“restricted person” means a person who is subject to a restriction under a declaration made under section 819 (1) that is in force.
(2) For the purposes of the definition of “insolvent company” in subsection (1), a company is unable to pay its debts if—
(a) at the date of the commencement of its winding up it is proved to the court that it is unable to pay its debts (within the meaning of section 570 ), or
(b) at any time during the course of its winding up the liquidator certifies, or it is proved to the court, that it is unable to pay its debts (within the meaning of section 570 ).
(3) For the purpose of a restriction imposed pursuant to this Part on a person’s acting as a director of a company, that restriction shall, in the case of a person who continues in office as a director of a company on the restriction taking effect (and the requirements set out in section 819 (3) are not met in respect of the company), be deemed, without proof of anything more, to have been contravened.
(4) This Chapter shall not apply to a company that commenced to be wound up before 1 August 1991.
Declaration by court restricting director of insolvent company in being appointed or acting as director etc.
819. (1) On the application of a person referred to in section 820 (1) and subject to subsection (2), the court shall declare that a person who was a director of an insolvent company shall not, for a period of 5 years, be appointed or act in any way, directly or indirectly, as a director or secretary of a company, or be concerned in or take part in the formation or promotion of a company, unless the company meets the requirements set out in subsection (3).
(2) The court shall make a declaration under subsection (1) unless it is satisfied that—
(a) the person concerned has acted honestly and responsibly in relation to the conduct of the affairs of the company in question, whether before or after it became an insolvent company,
(b) he or she has, when requested to do so by the liquidator of the insolvent company, cooperated as far as could reasonably be expected in relation to the conduct of the winding up of the insolvent company, and
(c) there is no other reason why it would be just and equitable that he or she should be subject to the restrictions imposed by an order under subsection (1).
(3) The requirements referred to in subsection (1) are—
(a) the company shall have an allotted share capital of nominal value not less than—
(i) €500,000 in the case of a public limited company (other than an investment company) or a public unlimited company, or
(ii) €100,000 in the case of any other company,
(b) each allotted share shall be paid up to an aggregate amount not less than the amount referred to in paragraph (a), including the whole of any premium on that share, and
(c) each allotted share and the whole of any premium on each allotted share shall be paid for in cash.
(4) In the application of subsection (3) to a company limited by guarantee, paragraphs (a) to (c) of it shall be disregarded and, instead, that subsection shall be read as if it set out both of the following requirements:
(a) that the company’s memorandum of association specifies that the amount of the contribution on the part of the member of it, or at least one member of it, being the contribution undertaken to be made by the member as mentioned in section 1176 (2)(d), is not less than €100,000;
(b) that the member whose foregoing contribution is to be not less than that amount is an individual, as distinct from a body corporate.
(5) In the application of subsection (3) to an investment company, paragraphs (a) to (c) of it shall be disregarded and, instead, that subsection shall be read as if it set out both of the following requirements—
(a) that the value of the issued share capital of the company is not less than €100,000,
(b) that an amount of not less than €100,000 in cash has been paid in consideration for the allotment of shares in the company.
(6) Where subsection (1) refers to being appointed or acting as a director or secretary of a company, or taking part in the formation or promotion of a company, “company” means any of the following:
(a) a private company limited by shares;
(b) a designated activity company;
(c) a public limited company;
(d) a company limited by guarantee;
(e) an unlimited company;
(f) an unregistered company.
(7) A prescribed officer of the court shall ensure that the prescribed particulars of a declaration under this section are provided to the Registrar in the prescribed form and manner (if any).
Application for declaration of restriction
820. (1) An application for a declaration under section 819 (1) may be made by—
(a) the Director,
(b) the liquidator of the insolvent company, or
(c) a receiver of the property of the company.
(2) The court may order that the person who is the subject of the declaration shall pay—
(a) the costs of the application, and
(b) the whole (or so much of them as the court specifies) of the costs and expenses incurred by the applicant—
(i) in investigating the matters that are the subject of the application, and
(ii) in so far as they do not fall within paragraph (a), in collecting evidence in respect of those matters,
including so much of the remuneration and expenses of the applicant as are attributable to such investigation and collection.
Liquidator shall inform court of jeopardy to other company or its creditors
821. (1) This section applies if the liquidator of an insolvent company is of the opinion that—
(a) a restricted person is appointed or is acting in any way, whether directly or indirectly, as a director of, or is concerned or taking part in the formation or promotion of, another company, and
(b) the interests of that other company or its creditors may be jeopardised by the matters referred to in paragraph (a).
(2) In any case to which this section applies—
(a) the liquidator shall inform the court of his or her opinion as soon as practicable, and
(b) the court, on being so informed by the liquidator, shall make whatever order it sees fit.
(3) A liquidator who, without reasonable excuse, fails to comply with subsection (2)(a) shall be guilty of a category 3 offence.
(4) In this section “company” means any company referred to in section 819 (6).
Court may grant restricted person relief from restrictions
822. (1) On the application of a restricted person, the court may, if it deems it just and equitable to do so, grant that person relief, either in whole or in part, from—
(a) any restriction under a declaration made under section 819 (1), or
(b) an order made under section 821 (2)(b).
(2) Such relief may, if the court considers it appropriate, be granted on such terms and conditions as it sees fit.
(3) A person who intends applying for relief under subsection (1) shall give not less than 14 days’ notice in writing of his or her intention to apply to—
(a) the Director, and
(b) the liquidator of the company the insolvency of which gave rise to the application for the declaration made in respect of him or her under section 819 (1).
(4) On receipt of a notice under subsection (3), the liquidator shall as soon as practicable notify such creditors and contributories of the company as have been notified to the liquidator or become known to the liquidator.
(5) On the hearing of an application under this section, the Director, the liquidator, or any creditor or contributory of the company may appear and give evidence.
(6) A liquidator who fails to comply with subsection (4) shall be guilty of a category 3 offence.
Register of restricted persons
823. (1) The Registrar shall, subject to the provisions of this section, keep a register of the particulars notified to him or her under section 819 (7).
(2) Where the court grants partial relief to a restricted person under section 822 (1)—
(a) a prescribed officer of the court shall ensure that the prescribed particulars of the relief are provided to the Registrar, and
(b) the Registrar shall as soon as practicable enter those particulars on the register.
(3) Where the court grants full relief to a restricted person under section 822 (1)—
(a) a prescribed officer of the court shall ensure that the Registrar is notified, and
(b) the Registrar shall as soon as practicable remove the particulars of that person from the register.
(4) The Registrar shall remove from the register any particulars of a restricted person on the expiry of 5 years after the date of the declaration made in respect of that person under section 819 (1).
(5) Nothing in this section shall prevent the Registrar from keeping the register required under this section as part of any other system of classification, whether under section 894 or otherwise.
Application of this Chapter to receivers
824. (1) Where a receiver of the property of a company is appointed, the provisions of this Chapter shall, with the modification referred to in subsection (2) and any other necessary modifications, apply as if references in this Chapter to the liquidator and to winding up were references to the receiver and to receivership.
(2) The modification mentioned in subsection (1) is that in the definition of “director of an insolvent company” in section 818 (1) the words “director or shadow director of an insolvent company at the date of, or within 12 months before, the appointment of a receiver to the property of the company” shall be substituted for the words “director or shadow director of an insolvent company at the date of, or within 12 months before, the date of the commencement of its winding up”.
Disqualification and restriction undertakings
Definitions (Chapter 5)
849. In this Chapter—
“disqualification” means being disqualified from being appointed or acting as a director or other officer, receiver, statutory auditor, liquidator or examiner or being in any way, whether directly or indirectly, concerned or taking part in the promotion, formation or management of each of the following:
(a) any company within the meaning of section 819 (6);
(b) any friendly society within the meaning of the Friendly Societies Acts 1896 to 2014;
(c) any society registered under the Industrial and Provident Societies Acts 1893 to 2014;
“disqualification acceptance document” means the document provided for by regulations under section 854 (1) and referred to in paragraph (a)(i) of that provision;
“disqualification order” means an order made under section 842 ;
“disqualification undertaking”, in relation to a person, means an undertaking by the person, given by the means provided in this Chapter, by which the person submits himself or herself to be subject to disqualification;
“restriction” means being restricted for a period of 5 years from being appointed or acting in any way, directly or indirectly, as a director or secretary of a company (within the meaning of section 819 (6)) or being concerned in or taking part in the promotion or formation of a company (within that meaning) unless the company meets the requirements set out in section 819 (3);
“restriction acceptance document” means the document provided for by regulations under section 854 (1) and referred to in paragraph (a)(ii) of that provision;
“restriction declaration” means a declaration made under section 819 ;
“restriction undertaking”, in relation to a person, means an undertaking by the person, given by the means provided in this Chapter, by which the person submits himself or herself to be subject to restriction.
Disqualification undertaking — initiation of procedure that provides person opportunity to submit to disqualification
850. (1) In this section—
“disqualification period” shall be read in accordance with subsection (3)(b);
“notice period” shall be read in accordance with subsection (3)(d);
“person” shall be read in accordance with subsection (2);
“specified date” shall be read in accordance with subsection (3)(c);
“underlying facts and circumstances” shall be read in accordance with subsection (3)(a).
(2) Subject to section 851 (6), where the Director has reasonable grounds for believing that one or more of the circumstances specified in section 842 (a) to (i) applies to a person (in this section referred to as the “person”), the Director may, in his or her discretion, deliver to the person, or to the person’s duly authorised agent, the following notice.
(3) That notice is a notice in the prescribed form stating—
(a) both—
(i) which of the circumstances specified in section 842 (a) to (i) the Director believes apply to the person; and
(ii) particulars of the facts and allegations that have given rise to that belief;
and the circumstances so stated, and the facts and allegations that have given rise to that belief (and of which particulars are so stated), are referred to together in this section as the “underlying facts and circumstances”;
(b) the period of disqualification (referred to in this section as the “disqualification period”) which, in the Director’s opinion, is warranted in relation to the person by the underlying facts and circumstances;
(c) the date (referred to in this section as the “specified date”) that will, subject to subsection (5), be the date of commencement of the disqualification period, if a disqualification undertaking is given by the person;
(d) that during—
(i) such period as may be specified in the notice (referred to in this section as the “notice period”), being a period beginning on a day falling not less than 21 days after the date of the notice and expressed to end immediately before the specified date; or
(ii) in the event of a request under subsection (5) by the person being acceded to, the notice period as extended in pursuance of that subsection;
the person may—
(I) notify the Director, in the prescribed form, of his or her willingness to give a disqualification undertaking for the disqualification period; and
(II) return to the Director the disqualification acceptance document duly signed;
(e) that during the notice period, or that period as so extended, the Director will refrain from making an application in respect of the person under section 842 arising from or in connection with the underlying facts and circumstances;
(f) that if the person, within the notice period or that period as so extended, does the things referred to in paragraph (d)(I) and (II), the Director shall not, after the expiry of that period, make an application in respect of the person under section 842 arising from or in connection with the underlying facts and circumstances.
(4) That notice shall also state—
(a) that the person may make a request, under subsection (5), for an extension of the notice period,
(b) the legal effect (for the person) of giving a disqualification undertaking for the disqualification period beginning on the specified date, and
(c) that if the person gives a disqualification undertaking—
(i) the person may seek to be relieved (whether in whole or in part) from the undertaking only by applying to the court under section 847 , and
(ii) that, on the making of such an application, the court may grant such relief only if it considers it just and equitable to do so, and then only on the terms and conditions as it sees fit.
(5) Where a notice is delivered under subsection (2), the Director may, at any time before the specified date, on the request of the person, where the Director considers it appropriate to do so for the purposes of extending the notice period (and postponing the commencement of the proposed disqualification period in consequence), substitute a later date for the specified date and, where such a date is so substituted, references in section 851 (a) to the notice period shall be read as references to the notice period as extended in pursuance of this subsection, and
(b) to the specified date shall be read as references to the date that has been substituted for it in pursuance of this subsection.
Effect of delivery of notice under section 850 , giving of disqualification undertaking on foot thereof and related matters
851. (1) Where a notice is delivered under section 850 (2), the Director and every person who is aware of the notice shall not, during the notice period, make an application under section 842 , arising from or in connection with the underlying facts and circumstances, in respect of the person who is the subject of the notice.
(2) Subsections (3) to (5) apply where a person, the subject of a notice delivered under section 850 (2), has, within the notice period—
(a) notified the Director, in the prescribed manner, of his or her willingness to give a disqualification undertaking for the disqualification period, and
(b) returned to the Director the disqualification acceptance document duly signed.
(3) The Director shall, as soon as practicable—
(a) cause the Registrar to be furnished with the prescribed particulars of the disqualification undertaking at such time and in such form and manner as may be prescribed, and the Registrar shall enter the prescribed particulars in the register of persons kept under section 864 , and
(b) notify the person of the prescribed particulars of the disqualification undertaking furnished to the Registrar and provide the person with a copy of the disqualification acceptance document executed by or on behalf of the Director.
(4) After the expiry of the notice period, neither the Director nor any other person shall make an application under section 842 , arising from or in connection with the underlying facts and circumstances, in respect of the person who has given the disqualification undertaking.
(5) For the duration of the disqualification period beginning on the specified date, the person who has given the disqualification undertaking—
(a) shall not be appointed or act as a director or other officer, statutory auditor, receiver, liquidator or examiner or be in any way, whether directly or indirectly, concerned or take part in the promotion, formation or management of each of the following:
(i) any company within the meaning of section 819 (6);
(ii) any friendly society within the meaning of the Friendly Societies Acts 1896 to 2014;
(iii) any society registered under the Industrial and Provident Societies Acts 1893 to 2014;
and
(b) shall be deemed, for the purposes of this Act, to be subject to a disqualification order.
(6) The Director shall not exercise his or her power under section 850 (2) in relation to a person where—
(a) in the Director’s opinion, a period of disqualification, in relation to the person, that is longer than 5 years is warranted by the underlying facts and circumstances, or
(b) the Director is aware that an application under section 842 has already been made in respect of the person arising from or in connection with the underlying facts and circumstances.
(7) Where the person who has given the disqualification undertaking (the “immediate undertaking”) is already disqualified by virtue of an earlier disqualification undertaking or disqualification order, the period specified in the immediate undertaking shall run concurrently with the remaining period for which the person is already subject to disqualification.
(8) In this section—
(a) without prejudice to section 850 (5), “specified date” and “notice period” are to be read in accordance with section 850 (3)(c) and (d), respectively,
(b) “person”, “underlying facts and circumstances” and “disqualification period” are to be read in accordance with section 850 (2), (3)(a) and (3)(b), respectively.
Restriction undertaking — initiation of procedure that provides person opportunity to submit to restriction
852. (1) In this section—
“notice period” shall be read in accordance with subsection (3)(c);
“person” shall be read in accordance with subsection (2);
“restriction period” means the period of 5 years, as mentioned in the definition of “restriction” in section 849 , for which the restrictions set out in that definition are to operate;
“specified date” shall be read in accordance with subsection (3)(b);
“underlying facts and circumstances” shall be read in accordance with subsection (3) (a).
(2) Subject to section 853 (6), where the Director has reasonable grounds for believing that a person falls within the description of the second-mentioned person in section 819 (1), namely a person who was a director of an insolvent company within the meaning of Chapter 3 (in this section referred to as the “person”), the Director may, in his or her discretion, deliver to the person, or to the person’s duly authorised agent, the following notice.
(3) That notice is a notice in the prescribed form stating—
(a) the circumstances, facts and allegations that have given rise to that belief of the Director, citing the provisions of section 819 (1) and section 818 (1) (and also, where appropriate, section 824 ) and stating particulars of those facts and allegations (and the circumstances so stated, and those facts and allegations, of which particulars are so stated, are referred to together in this section as the “underlying facts and circumstances”),
(b) the date (referred to in this section as the “specified date”) that will, subject to subsection (5), be the date of commencement of the restriction period, if a restriction undertaking is given by the person,
(c) that during—
(i) such period as may be specified in the notice (referred to in this section as the “notice period”), being a period beginning on a day falling not less than 21 days after the date of the notice and expressed to end immediately before the specified date; or
(ii) in the event of a request under subsection (5) by the person being acceded to, the notice period as extended under that subsection;
the person may—
(I) notify the Director, in the prescribed form, of his or her willingness to give a restriction undertaking; and
(II) return to the Director the restriction acceptance document duly signed;
(d) that during the notice period, or that period as so extended, the Director will refrain from making an application in respect of the person under section 819 arising from or in connection with the underlying facts and circumstances;
(e) that if the person, within the notice period or that period as so extended, does the things referred to in paragraph (c)(I) and (II), the Director shall not, after the expiry of that period, make an application in respect of the person under section 819 arising from or in connection with the underlying facts and circumstances.
(4) That notice shall also state—
(a) that the person may make a request, under subsection (5), for an extension of the notice period,
(b) the legal effect (for the person) of giving a restriction undertaking beginning on the specified date, and
(c) that if the person gives a restriction undertaking—
(i) the person may seek to be relieved (whether in whole or in part) from the undertaking only by applying to the court under section 822 , and
(ii) that, on the making of such an application, the court may grant such relief only if it considers it just and equitable to do so, and then only on the terms and conditions as it sees fit.
(5) Where a notice is delivered under subsection (2), the Director may, at any time before the specified date, on the request of the person, where the Director considers it appropriate to do so for the purposes of extending the notice period (and postponing the commencement of the restriction period in consequence), substitute a later date for the specified date and, where such a date is so substituted, references in section 853 —
(a) to the notice period shall be read as references to the notice period as extended in pursuance of this subsection, and
(b) to the specified date shall be read as references to the date that has been substituted for it in pursuance of this subsection.
Effect of delivery of notice under section 852 , giving of restriction undertaking on foot thereof and related matters
853. (1) Where a notice is delivered under section 852 (2), the Director and every person who is aware of the notice shall not, during the notice period, make an application under section 819 , arising from or in connection with the underlying facts and circumstances, in respect of the person who is the subject of the notice.
(2) Subsections (3) to (5) apply where a person, the subject of a notice delivered under section 852 (2), has, within the notice period—
(a) notified the Director, in the prescribed manner, of his or her willingness to give a restriction undertaking, and
(b) returned to the Director the restriction acceptance document duly signed.
(3) The Director shall, as soon as practicable—
(a) cause the Registrar to be furnished with the prescribed particulars of the restriction undertaking at such time and in such form and manner as may be prescribed, and the Registrar shall enter the prescribed particulars in the register of persons kept under section 823 , and
(b) notify the person of the prescribed particulars of the restriction undertaking furnished to the Registrar and provide the person with a copy of the restriction acceptance document executed by or on behalf of the Director.
(4) After the expiry of the notice period, neither the Director nor any other person shall make an application under section 819 , arising from or in connection with the underlying facts and circumstances, in respect of the person who has given the restriction undertaking.
(5) For the duration of the restriction period beginning on the specified date, the person who has given the restriction undertaking—
(a) shall not be appointed or act in any way, directly or indirectly, as a director or secretary of a company (within the meaning of section 819 (6)) or be concerned in or take part in the promotion or formation of a company (within that meaning) unless the company meets the requirements set out in section 819 (3), and
(b) shall be deemed, for the purposes of this Act, to be subject to a restriction declaration.
(6) The Director shall not exercise his or her power under section 852 (2) in relation to a person where the Director is aware that an application under section 819 has already been made in respect of the person arising from or in connection with the underlying facts and circumstances.
(7) Where the person who has given the restriction undertaking (the “immediate undertaking”) is already restricted by virtue of an earlier restriction undertaking or restriction declaration, the period specified in the immediate undertaking shall run concurrently with the remaining period for which the person is already subject to restriction.
(8) In this section—
(a) without prejudice to section 852 (5), “specified date” and “notice period” are to be read in accordance with section 852 (3)(b) and (c), respectively,
(b) “restriction period”, “person” and “underlying facts and circumstances” are to be read in accordance with section 852 (1), (2) and (3)(a), respectively.
Regulations for the purposes of sections 850 to 853
854. (1) The Minister shall make regulations requiring—
(a) that a document, in a form specified in the regulations, to be known as—
(i) in the case of sections 850 and 851 , a “disqualification acceptance document”; and
(ii) in the case of sections 852 and 853 , a “restriction acceptance document”;
(being the document by which the person to whom a notice delivered under section 850 (2) or 852 (2), as the case may be, relates signifies in writing (if such be the person’s decision) the person’s voluntary submission to disqualification or restriction, as appropriate, in accordance with this Chapter) shall be returned by the person within the relevant notice period to the Director; and
(b) that, on receipt of that document, the Director shall execute, or cause to be executed, on his or her part the document by the affixing of his or her seal to it.
(2) Regulations under subsection (1) may contain such consequential and supplemental provisions for the purposes of those regulations or for the purpose of giving further effect to sections 850 to 853 as the Minister thinks expedient, including—
(a) provision for particular procedures to be employed by the Director in relation to the delivery of a notice under section 850 (2) or 852 (2) or any communication between the Director and the person concerned or his or her duly authorised agent consequent on the delivery of such a notice (a “post-delivery-of notice communication”), and
(b) provision for a like privilege to legal professional privilege to attach to a post-delivery-of notice communication.
(3) This section is in addition to the powers under section 12 (1) to prescribe anything referred to in sections 850 to 853 as prescribed or to be prescribed.
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.