The Gazette 1990

GAZETTE

A 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. 13 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. 14

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

"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. 15 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 16 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 17 and some of these decisions have suggested that this duty is owed directly to the creditors themselves. 18 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

Doyle Court Reporters Principal: Ái ne O'Far rell Court and Conference Verbatim Reporting Specialists in Overnight Transcription 2, Arran Quay, Dublin 7. Tel: 722833 or 862097 (After Hours) Excettence in Sporting since 1954

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