Recently, we discussed some proposed changes to bankruptcy terms in Ireland. We can now report that these legislative changes have been largely accepted by the government. These changes have been hailed as being one of the most positive changes to Irish bankruptcy law for the many people currently suffering from debt issues.


It has been reported recently that although these changes will be widely accepted, some minor changes may need to be made. As we previously stated, the main proposed change would be that the discharge term for bankruptcy is to be reduced from three years to one year. This would be a major change in Irish bankruptcy procedures and would allow for those individuals who have been made bankrupt to return to business far sooner than was previously possible.


An amendment has been suggested on the proposed document. It was originally stated that those who have been bankrupt for more than one year prior to legislation being passed would see their bankruptcy discharged after 3 months. It is suggested that the government may now amend this to six months. This will still allow for many people to have their bankruptcy period greatly shortened, and it is hoped we will then see many entrepreneurs surge back into the market.


Another major change to Irish bankruptcy proceedings is in relation to the seizure of family homes following bankruptcy. TD Willie Penrose who is the main driving force behind these changes has proposed in his bill that these properties must be sold within three years, or be returned.


There have been some whisperings of these changes making bankruptcy appear a more attractive option. IMHO Chief Executive David Hall has rubbished these claims stating that:

“Going bankrupt is a daunting process for anyone – subjecting yourself to having the knives and forks in your house counted by a third party to establish what asset value you have in your house.”


Indeed, the very idea of the word bankruptcy is an incredibly daunting notion for anyone to face. It is hoped, however that these new changes, whilst bringing Irish law into line with Northern Ireland and the UK, will also make the process somewhat less devastating. This perhaps will then assist in Irish recovery as we see some of our entrepreneurs and hard-working business owners who have fallen on hard times make a swifter return to business.


Once again, we hope that this clears up any confusion about the ongoing changes within bankruptcy law and procedures in Ireland. If you yourself are experiencing difficulty and would like to know more about the process, please don’t hesitate to give us a call here at DCA Accountants.


From June 1st 2015, the Companies Act of 2014 will come into effect. This new Act will replace the existing Companies act, which was in place from 1963-2013. This is the largest reform of Irish Business Law that we have seen in decades. Its purpose is to make running a business in Ireland easier. This new Act will carry on some of the features of its predecessor and will have a number of new features including:

  • All company directors must be over 18.
  • Existing private companies must choose their new company type: a private company limited by shares or as a Designated Activity Company (DCA).
  • A new company type will be created; a private company limited by shares can be registered with the CRO (Companies Registration Office). This company can be a single director company.
  • Private limited companies will be entitled to have a single director but all companies must retain the office of the company secretary.
  • All company directors who are subject to a foreign disqualification must file an appropriate form with the CRO.
  • There will be changes to the registration procedures, and required methods of notifying the CRO.
  • External companies will no longer be able to register a place of business.
  • As of June 1st 2015, all existing external companies registered as a place of business will be deleted.
  • A company will no longer be required to have an annual general physical meeting, instead an annual general written meeting will now suffice.
  • The existing duties of directors are translated into eight principle duties, which will apply to all directors.
  • Reintroduction of the requirement that directors provide compliance statements.
  • Some holding companies will be exempt from the obligation to prepare audited group financial statements where they and their subsidiaries do not exceed certain thresholds.


With all these changes in mind, what does this new legislation mean for you and your company?


The most important thing this means for you and your company is that integral changes to your business, whilst often stressful, must be made and this will be the ideal moment to begin deciding what changes can truly benefit your company.


Despite this legislation not coming into effect until June 1st, companies and their directors must now begin to prepare for these changes to come into effect.  At this juncture, it would be wise to begin looking at your company structure and making decisions about what structure and accompanying rules best suit your company.

For example you may want to remove the second “silent” director from the company that never had any involvement in the running of the business.


There will be a transition period of 18 months from June 1st to allow companies to act upon the relevant changes. If a private company has not chosen their new company type during this time, it will automatically become a new private limited company with a single-document constitution. This company type does not allow for the future changing of articles contained within its constitution.


This new default will naturally not be appropriate for all companies and this is a good moment to begin doing some housekeeping within your company. Taking a closer look at your company now may make all the difference in the future and, as always, DCA Accountants are available to provide any guidance necessary during this period of transition for your company.


Recent legislation allows smaller firms to seek Examinership in the Circuit Court, making it easier and more cost-effective for SMEs to restructure.

The Government doesn’t often give struggling small businesses a Christmas president, but new legislation signed by Michael D Higgins on Christmas Eve will come as a boon to many. After a lot of pressure from lobby groups, the Companies (Miscellaneous Provisions) Bill sets out a framework for a kind of ‘examinership light’, giving firms access to court protection from creditors without forcing them to go through the expensive High Court process.


What it Means

For many companies, Examinership provides the best way to negotiate with creditors, review contracts and devise a rescue plan that keeps the business running as a growing concern. Historically, however, the procedure has come with the rather large downside of legal fees: it is extremely difficult to go through a High Court Examinership for less than five figures, and processing a complicated case can end up costing nearly €1m. For a business that is already struggling, such a large cost will often make a bad situation irretrievable.

Moving the venue for smaller firms seeking Examinership to the circuit court has an instant impact: for one, the Government estimates that legal fees are at least 30% lower in the lower court. The change in venues will also lead to less pressure on the overworked high-court system, and hopefully lead to speedier processing times for both large and smaller cases.



There are, of course, certain conditions attached to the rules: a large firm can’t avail of the cheaper Examinership process. To be eligible for Circuit Court Examinership, a company needs to meet two of three conditions. These are a balance sheet of €4.4m or less, a turnover of €8.8m or less, and a workforce of 50 or under. These broad and flexible criteria should allow most struggling small businesses to seek court protection rather than proceeding straight to insolvency.


Other Benefits

Another provision of the bill will make a smaller impact, but should benefit just about every company. Under previous legislation, when filing accounts at the Companies Registration Office, both a director and the company secretary must sign a statement to verify that the accounts are a true copy. However, the new legislation allows type signed accounts to be electronically filed using the online CORE system. It’s not a huge cut in the volume of red tape faced by businesses, but every little helps!

Here at DCA, we have been advising our clients about the impact of the bill on their day-to-day business. We also help companies facing difficulties to determine their best course forward, whether this is through restructuring or insolvency. To set up an initial, no-obligation meeting to discuss your situation and your options, simply contact us.


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