The Gazette 1990

GAZETTE

PRIL

1990

Winding up of company struck

off the register

If the company has been struck

off the register in circumstances

where it owes monies to its trade

and other creditors, (such as

employees and the Revenue), it

may still be possible to have it

wound up. Such a course of action

will, however, only be worthwhile

if it had any assets immediately

prior to dissolution.

Under Section 12(5) of the 1982

Act it is expressly envisaged that a

company whose name has been

struck off, may yet be wound up.

Nonetheless, it will still be

necessary to apply beforehand to

have its name restored to the

register.

This seems to be quite

logical. If the company were not

restored to the register, its assets

would technically belong to the

State (the company being dis-

solved) and accordingly there

would be no property or other

assets for the liquidator and

accordingly there would be nothing

to distribute among the creditors.

Furthermore, if the company were

not restored to the register, the

court would in effect be asking the

liquidator to wind up something

which did not legally exist!

Liability under Section 12(4)

Although it is clear that as a

result of dissolution, no action may

be taken by or against the

company, Section 12(4) of the

1982 Act provides that the liability,

if any, of every director, officer and

member of the company shall con-

tinue and may be enforced as if the

company had not been dissolved.

Liability under this section might

for example, include criminal

liability of directors for past

breaches of the Companies Acts.

"Liability [of every director,

officer and member of the

company] under [Section

12(4)] might . . . include

criminal [or civil] liability of

directors for past

breaches

Similarly, under various other

statutes, the directors and officers

may have incurred criminal liability

for past acts and omissions of the

company itself.

These individuals may also have

incurred civil liability prior to

dissolution. For example, the

directors will have stood in a

fiduciary relationship to the

company

and may have acted in

breach of their duty to it. Such

breach of duty will have given rise

to a possible cause of action by the

company, witha

consequent

remedy in damages against the

wrongdoers. Section 12(4) keeps

the liability of such directors alive

and as the cuase of action is now

vested in the State, proceedings

may be issued against them by the

Minister for Finance.

More importantly, a number of

recent cases have suggested that,

at least where the company is

insolvent or threatened with

insolvency, the directors owe a duty

to consider the interests of the

company's creditors

and some

of these decisions have suggested

that this duty is owed directly to

the creditors themselves.

If such

is the case, the otherwise unpaid

unsecured creditors may, in

appropriate circumstances, have a

right of action against the directors

for damages, despite the fact that

the company has since been

dissolved.

It should be noted, however, that

Section 12(4) only continues in

force such liabilities of the

directors, officers or members

which existed prior to the

dissolution of the company. The

section does not create any new

liabilities. Accordingly, personal

liability for the company's debts

will not be incurred solely on the

ground that the company has now

been dissolved.

Restoration to the register

As has been seen, the dissolution

of a company as a result of it being

struck off the reigster, can create

potentially serious difficulties for

various parties. In practice,

however, where the company has

been trading or has owned property

prior to its dissolution, the normal

course will be to apply to have it

restored to the register under

Section 12(6) of the 1982 Act. This

subsection provides that if any

member or creditor of the company

feels aggrieved by the company

having being struck off, the court

may upon application order that the

company be restored to the

register. Any such application must

be made within 20 years from the

publication in

Iris Oifigiuil

of the

notice striking the company off the

register.

The application, if any, may be

made by a member or creditor of

the company, or the company itself.

It seems to defy logic that a

company which, by virtue of its

own dissolution has ceased to exist

in the eyes of the law, may apply to

the court to have itself restored to

the register! If an order is made

restoring the company to the

register, then upon an office copy

of that order being delivered to the

Registrar for registration, the

company is deemed to have

Doyle Court Reporters

Principal:

Ái ne O'Far rell

Court and Conference Verbatim Reporting

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