# Clarification On Irish Bankruptcy Law



## Wren100 (17 Dec 2010)

Sorry if this is the wrong forum, but I need to know about Irish bankruptcy law with specific reference to the prinicple of corparate entity.  I'm a graduate of English law, and under that code, the debts, liabilities and assets of a registered company belong to the company, not the founder of the company, the chairman, the chief executive or anyone else.  Consequently, if such a company goes bankrupt, the creditors sue the company, John Smith Ltd, not John Smith himself, who may be living it up in Tahiti with his personal assets intact.   For this purpose, the company is actually a person under the law, quite apart from it's founders or officers, who are technically only it's employees, like the teaboy and the office cat, and are consequently not personally liable for the company's debts.

What I want to know is, does the same apply in Ireland?  The reason I ask is because of the continuous wailing and gnashing of teeth in this country regarding the supposedly harsh and Dickensian bankruptcy laws, the twelve year wait for discharge and all the rest of it.  It sounds to me like all of this applies to PERSONAL bankruptcy, not corporate bankruptcy, but there appears to be such a conflation of the two in the Irish media that I'm wondering how Irish law actually stands.  Does the concept of corporate identity actually exist in Irish law or is a company director or chairman personally liable for the company's debts?


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## Brendan Burgess (17 Dec 2010)

It's roughly the same in Ireland as in the UK. 

People get confused and use the word "bankruptcy" to refer to companies when they should be using "liquidation". 

Companies don't go bankrupt, they go into liquidation.  The liability of the shareholders is limited to the share capital as it is in the UK. 

However, in certain circumstances, the veil of limited liability can be lifted from the directors if it can be shown that they traded fraudulently or while insolvent.  It rarely succeeds.

brendan


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## Wren100 (17 Dec 2010)

Thank you for that clarification.


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