Restriction of Directors
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).
34. Section 819 of the Principal Act is amended by the substitution of the following subsection for subsection (1):
“(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—
(a) an insolvent company,
(b) an insolvent company who failed to convene a general meeting of shareholders for the purpose of nominating a named liquidator,
(c) an insolvent company at such a general meeting who fails to table a notice to nominate such liquidator, or
(d) an insolvent company who has failed to provide the required notice to employees of the company in the winding up of the 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”.
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.