Strike Off

Striking Off of Companies

There are provisions for the voluntary and involuntary strike off of companies from the register of companies. On strike off, the company ceases to exist and its assets vest in a State authority.

Voluntary strike off is permissible in certain circumstances, in particular where the company has ceased to trade or never traded at all.

There are a number of grounds upon which a company may be struck off involuntarily, for failures to comply with its legal obligations.   The most common ground for involuntary strike off, which has befallen almost 100,000 companies, is the failure to make one or more annual returns.

The 2014 Act amended the provisions for the striking off of companies.  Fewer changes were made to the provisions regarding the restoration of companies. The Act provided a statutory basis for certain practices which had previously been undertaken by the CRO, on an informal basis.


Voluntary Strike Off I

A company can apply voluntarily, to be struck off the register.  The CRO has a discretionary power to strike off a company, on the basis of a request by the directors. The power has been formalised in the 2014 Act,

A company may apply to the Registrar (CRO) to be struck off the register if the following conditions are satisfied:

  • the circumstances relating to the company are such as to give the Registrar reasonable cause to believe that it has never carried on business or has ceased to carry on business;
  • the company has passed a special resolution in the previous three months resolving to be struck off and resolving not to carry on business or incur liabilities until strike off;
  • the company has delivered all outstanding returns to the Registrar;
  • the company certifies to the Registrar that neither its assets nor its liabilities to exceed €150 and that it is not a party to any ongoing litigation;
  • the company has advertised in the prescribed from in one daily newspaper, in the prescribed form, of its intention to apply to be struck off the register to be published within 30 days before the date of the application in at least one daily newspaper circulating in the State;
  • the company has obtained a letter of no objection from the Revenue within the last three months

Voluntary Strike Off II

Where an application to be struck off the register is made within one year after the date on which the company has changed its name or its registered office (or both), then, as the case may be

  • the former name of the company, as well as the existing name of the company, or
  • the former address, as well as the current address, of the company’s registered office, or
  • both its former name and the former address of its registered office, as well as the existing name of the company and the current address of its registered office, shall be stated in the advertisement.

Where an application for voluntary strike off has been made, then as soon as practicable after receipt of the request for voluntary strike off, the Registrar shall publish in the CRO Gazette a notice stating that the company has applied to be struck off and that any person may object on the grounds that the conditions for voluntary strike off do not apply.

The notice is to specify the period within which an objection must be given, and unless given, the Registrar may strike off the company. The period for objection is 90 days from publication.  The company may request the Registrar to cancel the process of strike off within that period.


Involuntary Strike Off

The 2014 Act has formalised involuntary strike off. The Registrar of Companies may strike off a company if one or more of the following grounds apply;

  • failure to file an annual return;
  • Revenue gives notice of the company’s failure to deliver the required initial statement;
  • the Irish resident director, bond or connection with Ireland requirement has not been satisfied
  • the company is being wound up without a liquidator having been appointed
  • the company is being wound up, and the liquidator has not made returns for more than six months; or
  • where no persons are registered as directors.

Strike Off Procedure I

Once a company is put on notice of the Registrar’s intention to strike it off, it is given an opportunity to remedy the above grounds of strike off. The notice of intention to strike off must be sent by registered post to the company at its registered office.  If the grounds of strike off is that the company is being wound up with no liquidator or if liquidator’s returns have not been made, it must be sent by a liquidator recorded as such in the CRO.

A copy of the notice must also be sent by ordinary prepaid post to such persons if any as are recorded in the CRO as being the current directors. The address to which the notice is sent is to be the usual residential address of the directors as recorded in the CRO.  Noncompliance with this provision does not invalidate a notice that complies with the first-mentioned provision.

Instead of giving notice, the Registrar may publish a notice in the CRO Gazette containing the below information, if the company has not for 20 or more consecutive years made an annual return and no notice of the situation of the registered office has been given to the CRO.


Strike off Procedure II

The Registrar’s notice is to state that

  • the issue of the notice is the first step in its processes that may lead to strike off of the company;
  • the grounds for striking being invoked;
  • that the company will be dissolved if it is struck off;
  • where the first three grounds for strike off apply, that each director is liable for disqualification if the company is struck off;
  • the remedial steps required
  • the date on or before which the remedial steps must be taken; and
  • that failure to take the remedial steps before the requisite date may result in the Registrar giving public notice of intention to strike off the company; the date is to be not less than 28 days after the date of the notice.


Remedial Steps I

The remedial step required in the case of striking off or failure to make returns is that all annual returns must be made to the Registrar.

In the case of striking off for failure to make the required statement to the Revenue, the remedial step is that the statement is delivered. In the case of striking off for failure to have an EEA director, the remedial step that one of the requisite alternatives is complied with.

In the case of striking off in the case of the absence of a liquidator or the liquidator’s failure to make the required returns, the remedial steps are the provision of the liquidator’s details and/ or that the periodic statements are furnished up-to-date, as the case may be.

In the case of striking of due to the absence of directors, the remedial step is the appointment of a director.


Remedial Steps II

If the Registrar has given notice of his intention to strike off and the remedial steps have not been taken by the date specified, the Registrar may publish a notice in the CRO Gazette giving public notice of intention to strike the company off.  It shall state the grounds for striking off, the remedial steps and the date by which they must be undertaken.

The notice shall state that if the remedial steps are taken before the date specified, the company may strike the company off the register and it shall be dissolved.  The date shall be a date not less than 28 days after publication of the notice.


Striking Off I

In the case of an involuntary strike off, where the Registrar has given the notices, and the remedial steps have not been taken, the Registrar may strike the company from the register.

Where no objection has been delivered or where the Registrar is of the opinion that there is no reasonable basis for the objection made within the relevant period, the Registrar may strike off the company off the register. The company may request the cancellation of the process, which the Registrar may at its discretion permit on conditions.

The CRO shall publish in the CRO Gazette a notice of the striking off of the company.  The company is dissolved at the date of publication by the Registrar of the notice of its being struck off.


Striking Off II

The liability of any director, other officer or member of the company that has been dissolved under the above procedure shall continue and may be enforced as if the company had not been dissolved.  The power of the court to wind up a company that has been struck off the register or dissolved, remains.

For the purposes only of an application for the restoration of the company to the register or in so far as is necessary for the making of such an application (or the doing of anything required to be done consequent on the making of it), the company is deemed not to have been dissolved. This does not authorise dealing with, or the exercising of control over, any property that has become the property of the State under the State Property Act.


Continuance

For the purposes of an application to restore the company and insofar as necessary for the making of an application this regard, a company shall be deemed not be dissolved.  This does not authorise dealing with any property of the company which has been vested in the State, or a company has been struck off.

The ODCE may by notice to the directors of a company which has been struck off, require them to produce a statement of affairs of the company.  The statement of affairs shall be verified by affidavit, be in a prescribed form and contain particulars in respect of the company at the date of dissolution of assets, debts and liabilities, names and addresses of creditors, names of particulars of security given. Further information may be required.

On the application of the ODCE, the court may require a person who has made a statement to appear before it and answer on oath any question relating to the statement.  Failure to comply is a category 3 offence.


Annual Return Ground

The failure to make an annual is the most commonly used ground for striking off. The CRO may send a registered letter requiring that all returns be made within one month.

If the annual returns are not furnished, and no response is received that the company no longer carries on business, a notice may be published in the CRO Gazette.

The notice states that the company will be struck off within one month and dissolved unless all outstanding returns are delivered.  After a month, the CRO may strike off the company unless good reason is shown otherwise.  If the company is struck off, a notice is published in the CRO Gazette, and the company is dissolved.


Revenue Statement I

Every company incorporated in the State, which commences a trade or business in the State, must give a statement to Revenue, within 30 days of the date upon which the company commences the relevant business. A company may be struck off for failure to give the requisite notice to the Revenue Commissioners.

Certain information must be provided, including the name, registered office, principal place of business, directors’ and secretary’s particulars, nature of the trade, date of commencement, date to which accounts will be made up, and such other information as Revenue may specify.

There are certain bases upon which a company incorporated in the State is not tax resident.  If the company is incorporated in Ireland but is not tax resident, the statement must specify where it is tax resident.   If a company is incorporated in Ireland but claims to be tax resident because a related company carries on business in the State, details of the related company must be given.


Revenue Statement II

If the company claims to be tax resident because it is controlled by another company which is traded on a Stock Exchange in an EEA state or because double taxation treaty applies, certain other details are required, including names and addresses of beneficial owners.

If the company is neither incorporated nor resident in the State but carries on business in the State, a statement must be given, setting out certain details, including its place of business, name, and address of the agent, manager or representative and the date on which it commences to trade.

If the above notice is not given, strike off procedures, similar procedures to those set out above may apply.  Notice is published in the Gazette, and ultimately, the company may be struck off.


No Trade or Business

Where the CRO has reasonable cause to believe that a company does not carry on business, it may take steps to enquire as to the position. If it is satisfied that the company is not carrying on business, it may strike it off.  This may occur, for example, where all directors have resigned or where there is other evidence of cessation of business.

The Registrar sends a registered letter to the company, enquiring as to whether it is carrying on business.  It specifies a date by which, if no response is made, notice will be published in the CRO Gazette.

If no response after a one month period, the CRO may strike the company’s name off the register and publish this fact in the CRO Gazette.


No EEA Director etc.

Every Irish incorporated company must have at least one director resident in an EEA country, a real trading connection with the State or must have a bond.  The EEA is the European Union plus the EFTA countries, namely Norway, Liechtenstein, Iceland.

In the absence of an Irish or EEA director, the company must maintain a bond of at least a certain value.  The bond is to cover monies which may become payable in certain circumstances, including in particular in respect of fines for failure to comply with Companies Act obligations.

An alternative to a bond is a certificate from the CRO that the company has a real and continuous link with one or more economic activities in the State.  The certificate may be revoked if the company ceases to have a real and continuous link with the State.

If there is no Irish / EEA director and if the above conditions are not complied with, then the company and any of its officers in default are guilty of an offence. A strike off procedure analogous to that set out above applies, where the conditions are not satisfied.


Other Grounds

A public limited company may be struck off if it fails to obtain the requisite certificate from the CRO.  The requisite certificate confirms that it complies with the minimum capital requirements applicable to public limited companies.

If a company is being wound up and the CRO has cause to believe that no liquidator is acting or that the company is fully wound up, but the liquidator has not made the requisite returns for six months, the Registrar may initiate proceedings to strike the company off the register.  The procedure is broadly similar to that set out above.


References and Sources

Primary References

Companies Act 2014 S.725- S.735 (Irish Statute Book)

Companies Act 2014: An Annotation (2015) Conroy

Law of Companies 4th Ed.  (2016)  Ch.25   Courtney

Keane on Company Law 5th Ed. (2016) Ch. 29 Hutchinson

Other Irish Sources

Tables of Origins & Destinations Companies Act 2014 (2016) Bloomsbury

Introduction to Irish Company Law    4th Ed. (2015) Callanan

Bloomsbury’s Guide to the Companies Act 2015      Courtney & Ors

Company Law in Ireland 2nd Ed. (2015) Thuillier

Pre-2014 Legislation Editions

Modern Irish Company Law   2nd Ed. (2001) Ellis

Cases & Materials Company Law 2nd Ed. (1998) Forde

Company Law 4th Ed. (2008)  Forde & Kennedy

Corporations & Partnerships in Ireland (2010) Lynch-Fannon & Cuddihy

Companies Acts 1963-2012   (2012)  MacCann & Courtney

Constitutional Rights of Companies   (2007)  O’Neill

Court Applications Under the Companies Act (2013) Samad

Shorter Guides

Company Law – Nutshell 3rd Ed. (2013) McConville

Questions & Answers on Company Law (2008)        McGrath, N & Murphy

Make That Grade Irish Company Law 5th Ed. (2015) Murphy

Company Law BELR Series (2015)   O’Mahony

UK Sources

Companies Act 2006 (UK) (Legilsation.gov.uk)

Statute books Blackstone’s statutes on company law (OUP)

Gower Principles of Modern Company Law 10th Ed. (2016) P. and S. Worthington

Company Law in Context 2nd Ed. (2012) D Kershaw

Company Law (9th Ed.) OUP (2016) J Lowry and A Dignam

Cases and Materials in Company law 11th Ed (2016) Sealy and Worthington

 

UK Practitioners Services

Tolley’s Company Law Handbook

Gore Browne on Companies

Palmer’s Company Law