# Questions about Members Voluntary Liquidation



## goosebump (18 Nov 2011)

I'm trying to wind up a dormant company that doesn't have up to date ARD returns.

The company is basically just a website that takes in PayPal payments and pays them out via PayPal. It has a bank account with €2k in it and no creditors.

If I go the voluntary strike off route, I'm going to have to pay €300 in fines and probably another €500 in audit fees.

So I'm thinking of going the Members Voluntary Liquidation route.

I've gone through the process, and while complex, I think its doable.

The only questions I have relate to the role of the Liquidator and the Independent person.

Does the Liquidator have to be a member of a professional body? I can see that requirement anywhere. Can a liquidator be just anyone?

I understand the Independent person has to be the "Company's auditor", but the company has never had an auditor, so who should this be? Does it have to be someone from the CRO's register of auditors?


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## J.Ryan (19 Nov 2011)

goosebump said:


> I'm trying to wind up a dormant company that doesn't have up to date ARD returns.
> 
> The company is basically just a website that takes in PayPal payments and pays them out via PayPal. It has a bank account with €2k in it and no creditors.
> 
> ...


 
No body would be silly enough to operate as a liquidator for a fee of under €500.00,  The adverts are going to cost them over €300 plus VAT anyway.

As far as I remember there has to be a declaration from the auditor, stating that the company is solvent and can pay all acknowledged creditors,  they are going to charge for making that declaration.

Get an audit done and get everything filed and then go for the strike off at that stage,  be a bit cheaper.


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## goosebump (20 Nov 2011)

J.Ryan said:


> No body would be silly enough to operate as a liquidator for a fee of under €500.00,  The adverts are going to cost them over €300 plus VAT anyway.



The liquidator can be anybody, provided they aren't affiliated with the company, and given that there isn't anything to liquidate, all they have to do is sign a form. Can't see why someone I know would want €500 for that.

And what ads are you talking about? The only ad required is a notice is Iris Ofiguil, which costs €10 per line.



J.Ryan said:


> As far as I remember there has to be a declaration from the auditor, stating that the company is solvent and can pay all acknowledged creditors,  they are going to charge for making that declaration.



That declaration is made by the Directors, not an auditor. An "Independent Person" has to witness the declaration, but that person just needs to be suitably qualified, and I know a few accountants who will do this for me.



J.Ryan said:


> Get an audit done and get everything filed and then go for the strike off at that stage,  be a bit cheaper.



I don't think it will. A strike off is going to cost me circa. €1,000.

Fine €300
Audit by registered auditor €400-€500
Ad in national newspaper for strike off €300


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## Jim2007 (20 Nov 2011)

goosebump said:


> I'm trying to wind up a dormant company that doesn't have up to date ARD returns.
> 
> The company is basically just a website that takes in PayPal payments and pays them out via PayPal. It has a bank account with €2k in it and no creditors.



OK, so this is not actually a dormant company as you state... and at least in theory a members voluntary dissolution would be the way to go. 



goosebump said:


> If I go the voluntary strike off route, I'm going to have to pay €300 in fines and probably another €500 in audit fees.



Things don't work like that:roll eyes:  You have to be fully up to date with the CRO before they will agree to allow you to proceed with the dissolution and they must agree!  Should they refuse, then the *only* option is to go the the high court and that will cost you heaps of money...



goosebump said:


> I've gone through the process, and while complex, I think its doable.



There are several complex documents that must be correctly prepared and filed, failure to get this right could result in the CRO refusing your application and/or leave you subject to proceedings as well.  And as I have already pointed out, should the CRO refuse your application then the only option is the high court - you can't just change your mind and walk a way once you start.

Bottom line - stop the DIY and go get proper legal advice or it will end up costing you a lot more than a few thousand Euro.


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## Joe_90 (20 Nov 2011)

Interesting angle.

So you get your "buddy" to act as the liquidator for free.

Sounds like a plan but those more familiar than me might clarify if failure to file an annual return fall into the offence mentioned 2.6.2 of the odce publication
[broken link removed]


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## Time (21 Nov 2011)

Prosecutions are very rare esp for a dormant company. 

A company that fails to file returns will be struck off anyways.


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## T McGibney (21 Nov 2011)

This thread started by the OP indicates that their company's tax and ODCE compliance status is problematic to put it kindly.

In these circumstances, an audit or members voluntary liquidation sounds like an absolute nightmare.


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## goosebump (21 Nov 2011)

Jim2007 said:


> Things don't work like that:roll eyes:  You have to be fully up to date with the CRO before they will agree to allow you to proceed with the dissolution and they must agree!  Should they refuse, then the *only* option is to go the the high court and that will cost you heaps of money...



Your returns do *not* need to be up to date to go the Members Voluntary Liquidation route, and the CRO do not need to approve it. Once the Directors resolve to liquidate the company, and the solvency of the company is confirmed by a person acting as an auditor, the CRO won't have a problem with it.



Jim2007 said:


> There are several complex documents that must be correctly prepared and filed, failure to get this right could result in the CRO refusing your application and/or leave you subject to proceedings as well.  And as I have already pointed out, should the CRO refuse your application then the only option is the high court - you can't just change your mind and walk a way once you start.



There are a few docs, but only one, the Declaration of Solvency, is complex, and you can have it checked at the CRO public office before you officially submit it.



Jim2007 said:


> Bottom line - stop the DIY and go get proper legal advice or it will end up costing you a lot more than a few thousand Euro.



I've been self-employed for 7 years and I've never paid a red cent to an accountant or a solicitor. Don't intend to start now.

Kind of reminds me of the time that I tried to open a bank account for the limited company. Was told by AIB and BOI that I would need to submit my "Articles" in order for them to open the account, and that I would have to get these from a local accountant.

I tried to explain that it was up to me what my Articles were, and that if I wanted my Articles to simply state "The Articles of this company are those as outlined in the Companies Act 1963" that was me prerogative.

They initially refused to accept this, as undoubtedly ever time someone has opened account they had handed in a bound photocopy of a standard set of articles that someone had bought for €200 from the local accountant.

I eventually wrote to BOI Head Office, explaining the situation, and got a grovelling apology and my account was open within 24 hours.


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## goosebump (21 Nov 2011)

T McGibney said:


> This thread started by the OP indicates that their company's tax and ODCE compliance status is problematic to put it kindly.
> 
> In these circumstances, an audit or members voluntary liquidation sounds like an absolute nightmare.



Actually, its 2 completely different companies. There are no CRO or ODCE issues with my primary company that I use on a day to day basis.

The company that is "dormant" is one that set up to issue a set of invoices to a multinational company, who require a CRO number to put you on their Creditors Ledger. The company only ever processed a small number of transactions and is now effectively dormant.


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## goosebump (21 Nov 2011)

Another update on this that may assist others.

The reason my return was late was not because I missed my ARD date. I had the date in my diary and had everything ready to file it on CORE.

However, in the previous year, I had changed my accounting period dates, which meant there was a gap of > 9 months between the end of my last accounting period and my ARD, which meant I had to make up my ARD to Sep 30.

That meant is was late, and I lost the audit exemption.

However, technically, the CRO will regard you as "Up to Date" until your ARD date + 28 days, which means you can still proceed with a Voluntary Strike Off in that window.

My tax affairs for this company are up to date, so I should have no problem getting a Letter of No Objection, and beyond that, I just have to put an add in a national newspaper, advertising the strike off.

I have about 18 days to do this, so hopefully that should get me out of jail.


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## WindUp (21 Nov 2011)

I have used mystrikeoff.ie for ads. with no hassle --- no connection


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## T McGibney (21 Nov 2011)

goosebump said:


> The reason my return was late was not because I missed my ARD date. I had the date in my diary and had everything ready to file it on CORE.
> 
> However, in the previous year, I had changed my accounting period dates, which meant there was a gap of > 9 months between the end of my last accounting period and my ARD, which meant I had to make up my ARD to Sep 30.
> 
> That meant is was late, and I lost the audit exemption.



Is this a wind-up? You boast that you have 'been self-employed for 7 years and (you've) never paid a red cent to an accountant or a solicitor'.  Yet you have walked yourself into this mess, and a parallel mess in another company, all of which would have been avoided with even basic advice.



goosebump said:


> However, technically, the CRO will regard you as "Up to Date" until your  ARD date + 28 days, which means you can still proceed with a Voluntary  Strike Off in that window.
> 
> My tax affairs for this company are up to date, so I should have no  problem getting a Letter of No Objection, and beyond that, I just have  to put an add in a national newspaper, advertising the strike off.
> 
> I have about 18 days to do this, so hopefully that should get me out of jail.



Sorry, I don't understand you here. If your ARD was only 10 days ago, you should still be able to file an annual return online within the next 18 days without incurring late fees. You then have a further 28 days to file accounts and the signed return.

Fyi, the voluntary strikeoff will take approx 3 months to complete and the company must remain up-to-date in the CRO throughout this period, otherwise it is invalid. Also, letters of No Objection normally take a lot longer than 18 days to issue.


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## goosebump (21 Nov 2011)

T McGibney said:


> Is this a wind-up? You boast that you have 'been self-employed for 7 years and (you've) never paid a red cent to an accountant or a solicitor'.  Yet you have walked yourself into this mess, and a parallel mess in another company, all of which would have been avoided with even basic advice.



I'm not in a mess. I missed an ARD, which is a pretty regular occurrence. And I will be able to resolve it at no extra cost. Nor is my other company in a "mess". I just happened to have paid my income tax under Self Assessment rather than PAYE. I've already been on to Revenue about that today, and they've said its not an issue provided I switch to PAYE for 2011.

Had I paid an accountant over the last 7 years, the bill would be at least €5k.




T McGibney said:


> Sorry, I don't understand you here. If your ARD was only 10 days ago, you should still be able to file an annual return online within the next 18 days without incurring late fees. You then have a further 28 days to file accounts and the signed return.



Perhaps you should consult the CRO statutory requirements before being so dismissive of others.

Your B1 Annual Return needs to be made *up to* the *earlier* of the following 2 dates:

The end of your accounting period + 9 months
Your actual ARD

Therefore, if the end of your last accounting period was 31/12/2010, your B1 Annual Return needs to be made up to Sep 30th *at the latest", which means that even if your ARD is in Nov, your return will be late if it is made after Sep 30.



T McGibney said:


> Fyi, the voluntary strikeoff will take approx 3 months to complete and the company must remain up-to-date in the CRO throughout this period, otherwise it is invalid. Also, letters of No Objection normally take a lot longer than 18 days to issue.



Yes, the process takes 3 months, but you can apply for a H15 strike off provided your returns are up to date. It is the date that you apply that matters, not the date you are struck off. It was actually someone in the CRO who advised me to take this route, after I had explained the situation to her.

Also, you can get a No Objection letter within 4-5 days if you indicate that it is urgent in your application.


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## goosebump (21 Nov 2011)

WindUp said:


> I have used mystrikeoff.ie for ads. with no hassle --- no connection



Thanks for that. Hopefully, another few quid saved.


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## T McGibney (21 Nov 2011)

goosebump said:


> Perhaps you should consult the CRO statutory requirements before being so dismissive of others.
> 
> Your B1 Annual Return needs to be made *up to* the *earlier* of the following 2 dates:
> 
> ...



The obvious course of action in that case is to change your accounts year-end date, to a date within 9 months of your ARD, and prepare accounts for the longer period.


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## goosebump (21 Nov 2011)

T McGibney said:


> The obvious course of action in that case is to change your accounts year-end date.



That's where the problem arose.

Initially, the accounts were made up from 01/04 to 31/03, which meant the ARD in Nov was fine.

However, last year, I changed to the accounts period to 01/01 31/12, but didn't elect to retain the earlier ARD.

Consequently, I had the Nov date in my diary, but was unaware that it was in fact the earlier date that applied.

I don't know where the 9 months rule comes from. Can't see why the CRO don't allow you to make up your ARD to any date in the subsequent calendar year, particularly for small companies.


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## T McGibney (21 Nov 2011)

You can still prepare accounts for the period 1/1/2010 to (say) 31/3/11 and file an annual return, made up to your current ARD, accompanied by those accounts.


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## goosebump (21 Nov 2011)

T McGibney said:


> You can still prepare accounts for the period 1/1/2010 to (say) 31/3/11 and file an annual return, made up to your current ARD, accompanied by those accounts.



You're right! I can!

I had actually tried to file accounts from 01/04/2010 to 31/03/2011, but it wouldn't let me. Never thought to extend the period by 3 months.

Thanks a millions for that. I realise you might not have been inclined to offer this advice given my attitude to members of professional bodies.

(That said, I did contact a couple of accountants explaining the situation, and none offered this advice.)

Anyway, thanks a billion (to use the parlance of the time).


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## T McGibney (21 Nov 2011)

goosebump said:


> Thanks a millions for that. I realise you might not have been inclined to offer this advice given my attitude to members of professional bodies.



Glad to be of help  Don't worry, its totally up to you whether you use professional advice (which may or may not be from members of professional bodies). 

I do think though that business people can save themselves headaches by availing of good quality advice, and if this is priced fairly, the savings might also outweigh the cost of the advice. Saying this isn't a cut at you, its just my own theory based on my own experiences. Each one to their own.


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## goosebump (21 Nov 2011)

T McGibney said:


> Glad to be of help  Don't worry, its totally up to you whether you use professional advice (which may or may not be from members of professional bodies).
> 
> I do think though that business people can save themselves headaches by availing of good quality advice, and if this is priced fairly, the savings might well outweigh the cost of the advice. Saying this isn't a cut at you, its just my own theory based on my own experiences. Each one to their own.



I guess its a question of scale.

I always take the view that if the accountant can save me more than their fee, I'll use them, but my income is fairly low, so it difficult to make any substantial saving.

Also, my Dad was ripped off by his accountant for years, so I probably have a chip on my shoulder about accountants too.


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## Joe_90 (22 Nov 2011)

Great to see you found a solution.
C.


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