Dissolved Company - liabilities of Directors

As most posters above know, a struck-off company has a kind of a half-life, in that although it technically doesn't exist anymore, it can be restored to the Register at any time (certainly up to 20 years after strike-off) upon satisfaction of all statutory requirements (filing of returns and accounts) and payment of all outstanding filing fees etc., so although it's gone, it's not really gone, because it could come back!

If an application to restore the company is made within 12 months of strike-off, it will cost €300 as well as all outstanding filing fees as above. If application is made after 12 months have expired, an application must be made to the High Court, which usually costs very significantly more (I would be very surprised if €2k would get far!) on top of all the other costs and filing fees etc.

An application to restore can be made by the directors, or can be made to the High Court by, for example, creditors, Revenue etc.. If the Court orders the restoration at the application of creditors, it will be at the expense of the directors, who MUST comply with the Court Order, and will not be cheap.

On a different point, if a director continues to trade under teh name of a limited company which has been struck off, it is an offence, in the same way as if he traded under a fictitious company name, and he will be liable (along with his other directors) for any and all liabilities incurred, provided he is prosecuted for, and convicted of, doing so.
 
"and he will be liable (along with his other directors) for any and all liabilities incurred, provided he is prosecuted for, and convicted of, doing so."

OK - thanks everybody. These people have not been prosecuted for anything but judgments ( undefended) have been obtained against them personally for what would be regarded as "business" debts - they did not deal with those proceedings.

I was asked if it was possible to have those personal judgments set aside on the grounds that the debts were not personal debts but debts of the dissolved company. As the people involved do not intend to restore the company, I felt that a Court would have little or no sympathy for them. So, even though I suspect that oopsbuddy probably has hit the nail on the head i.e. that the liability is not automatic, that its not a good argument to run. But it does seem as if the people involved could, perhaps, have successfully defended the original actions. Again, not sure I'd like to run that defence.

mf
 
I would also query in what manner the company was dissolved? Did the CRO strike it off for failure to file annual returns? Did the directors make an application for voluntary strike off, in which case they would have had to declare the company solvent? That would have been fraudulent in this case leading to further problems.

IMO, your clients would have had at best a 50/50 argument that the debts were incurred by the company, if the company did not legally exist when the debts were incurred. Even if they won this argument, which I think is unlikely, surely trading a dissolved insolvent company over a prolonged period of time, and ignoring various debt collection proceedings while continuing to incur debt is reckless trading at the very least ..in which case they would again be personally liable for the debts. I don't think your clients have a leg to stand on to tell you the truth.
 
What became of the assets of the Company?

Is the name of the Company still being used?
 
MF Courtney's Law of Private Companies is the authoritive text for any matters company.
 
The problem that I can see here is that when a company is struck off for non filing of returns, it legally ceases to exist in law and the directors are then the directors of nothing. But the company can be restored at any time within 20 years and continue as if nothing had happened. That is why you cannot take the name of a dissolved company until 20 years have elapsed since the dissolution.

It is the concept that a company ceases to exist is one that many people fail to grasp even government depts such as Revenue don't acknowledge strike offs for failing to file etc. I know of one case where Revenue kept pursuing a struck off company for unpaid VAT. I would assume that any proceedings would fail due to the company's status?
 
What would be the position if you had dispute between directors/shareholders and company struck off for failing to file returns. What would happen if one of the directors was still writing cheques in company name after being struck off? Would be be personally liable as opposed to the company and what should other directors do to safeguard their position?
 
The bank should be informed immediately of such a strike off.
If the director continues to write cheques he is spending the states money. A big problem there.
 
bond-007 said:
It is the concept that a company ceases to exist is one that many people fail to grasp even government depts such as Revenue don't acknowledge strike offs for failing to file etc. I know of one case where Revenue kept pursuing a struck off company for unpaid VAT. I would assume that any proceedings would fail due to the company's status?
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The revenue have on many occasions restored the company only to appoint a liquidator with a view to getting paid!
 
bond-007 said:
An expensive process for Revenue to undertake.
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It is but they do it, I suppose it is their way of tackling unliquidated insolvent companies that they believe either has assets or can hold the directors personally responsible.
 
That's a really interesting one Bond. I have a motion for judgement in default pending in the High Court against a company the directors of which put the company into voluntary liquidation within a month a receiving the summons. I thought we would have to apply to put the company back on the register before seeking judgement but my barrister tells me we can proceed without doing so...
 
Kate10 said:
That's a really interesting one Bond. I have a motion for judgement in default pending in the High Court against a company the directors of which put the company into voluntary liquidation within a month a receiving the summons. I thought we would have to apply to put the company back on the register before seeking judgement but my barrister tells me we can proceed without doing so...
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Since the company existed at the time of issuing the summons, the liquidator cannot finish the liquidation process until the case is finalised - the company won't be dissolved until all debts are paid. Dissolution only really happens at the end of the liquidation process.

In order to go into voluntary liquidation the directors would have had to swear an affidavit that the company had assets to meet all its liabilities - since you got in before the company went into liquidation, that would have had to include the sum you're claiming. If the funds aren't there, you may have a cause of action against the directors.



On another note, dissolved family companies cause havoc when dealing with land - the former owners of the company squat on the title and then get a shock when they realise that since the property vested in the state it's a 30 year limitation period for adverse possession.
 
Thanks j26. To be honest am aware of all the above. The only thing I am surprised about is that we can proceed with our motion while the company is not on the register ...I would have thought that we would first have had to apply to have it put back on.
 
So they dissolved the company?

I would be amazed if the judge would give a judgement against a non legal entity.
 
Sort of related question, apologies if this should be elsewhere on the forum.

Can a company just decide to notify that it is ceasing trading but, using lack of funds as an excuse, not appoint a liquidator so leaving all creditors high and dry?

I hope not....
 
bond-007 said:
So they dissolved the company?

I would be amazed if the judge would give a judgement against a non legal entity.
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But if it was a members voluntary liquidation where they swore that they were solvent even though the summons had already been served on them, does that not rather take the wind out of their sails?

mf
 
No, as the judgement had not been given against it at that stage.

Would a Judge have the power to restore the company so the judgement could be made against it?
 
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