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Involuntary Strike Off

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When setting up your company, it is incredibly easy to dismiss the idea of a negative or unfavourable end to your business life. However, as we have gone over many times in the past, it is essential to have a realistic outlook and to be aware of the consequences of your business actions. Today we will be focusing on Involuntary Strike Off. As we are all aware, there are a certain number of requirements of all companies including the filing of annual returns. Non-compliance in this area can result in the company being struck off the register, an action which can have some far-reaching consequences that many business owners may not be aware of.

Failure to file an annual return is the most common reason for strike off in Ireland. In some cases, not filing a return can be a simple case of missing the date accidentally, but in some cases business owners may view being struck off by the CRO as a cheap and easy way of disposing of a company,

Under what circumstances could a company fact involuntary strike off?

  • Failure to make an annual return for one year.
  • Where the company receives notice in writing from Revenue of failure to deliver a statement.
  • Where the registrar may believe that there is no EEA resident director or bond in place.
  • The company is being wound up and the Registrar believes that there is no liquidator in place.
  • Where the company has already been wound up, but no returns have been made by the liquidator for a period of 6 months.
  • No current director is noted in the office.

What does the strike off process involve?

  • A non-statutory reminder will be sent to a non-compliant company.
  • A strike off notice will be issued which will detail the reasoning behind strike off and ways in which this can be avoided.
  • 28 days following this notice, a notice will be published in the CRO Gazette unless remedial actions have been taken.
  • 28 days following this second notice, the company will be officially struck off the register.
  • A notice dissolving the company will then be published in the CRO Gazette.
  • Should a company be struck off for failure to file annual returns, the business owner may face legal issues.

Should your company experience involuntary strike off while still trading, some of the negative consequences include:

  • The company ceases to exist as a legal entity from the date of publication.
  • The assets of the company become the property of the State.
  • The protection of the company’s limited liability is lost from the date of publication, meaning that should trading continue, it is in a personal capacity.
  • Banks cannot lend funds to an entity which does not exist.
  • Business owners may face legal issues.

Should your company be struck off, it is possible to reinstate a company through the CRO within 12 months of the strike off, by filing all outstanding returns, paying all fees. Alternatively, you can voluntarily strike off your company which will have less of the negative consequences.

We hope that this information will be of benefit to you. If you have any queries or concerns on any business or financial matters, please don’t hesitate to contact us here at EcovisDCA.

 

 

 

NO DIVERSIONS, IT’S TIME FOR CONVERSION

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Looming deadlines are rarely anyone’s favourite topic of discussion so it is vital to remain up to date on any action that needs to be taken in regards to your business matters to avoid falling behind and encountering any issues. The deadline for company conversions under the Companies Act of 2014 is fast approaching and it is important to be aware ahead of time of your obligations to the conversion process. To make this process a much less painful one, we have compiled some of the most important points to be considered. It is expected that a great many Irish companies are to choose the “Do Nothing” option (as many an Irish mammy would say is the Irish way) so as a business owner you must stay informed of the implications of all choices.

Companies in existence as of 1st June 2015 must either opt in to the Model Private Company (Ltd.) regime or opt out of this regime and into the Designated Activity Company Regime (DAC).

There has been a provided transition period of 18 months from the date of the commencement of the Act (June 1st 2015), to allow companies sufficient time to comply and for the Companies Registration Office to act on the results and this time is now running out.

Any company incorporated after this date will be registered as one of the new company types under the act i.e. Ltd., DAC, CLG, etc. All existing companies must comply with the rules of the act during this period of adjustment. August 31st will be the deadline for all companies to initiate the conversion process whilst November 30th ends the deadline period. Any companies which have not actively converted to a new company type during this period will automatically be converted to Ltd. Companies will then be required to show their company type in their name which will then be reflected on a new certificate of incorporation

Although there is an option of taking no action and utilising a statutory default, there are many implications of doing so and it is actively advised to take action yourself in order to have full control over the process. Taking no action may result in delays in banking and legal transactions as despite having a new certificate of incorporation, the company will not have an updated constitution, as well as causing possible issues in the future as it will be deemed that directors did not follow the appropriate duties in this case. This is the future of your business at stake and there can be no room for ambiguity. When it comes to your business, you should always be in the driving seat on matters such as these.

Should you require any assistance or guidance on this or any other business or financial matters please don’t hesitate to contact us at DCA Accountants where we can help you make this and many other business matters as quick and painless as possible to ensure the continued success of your business.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY