Characteristics

Key characteristics of a Creditors’ Voluntary Liquidations:

• the liquidation is instigated by the directors of the company and unlike a Court Liquidation an application to the High Court to wind up the company is not necessary;
• the liquidator realises the assets;
• all employees are made redundant and their claims for arrears of pay, arrears of holiday pay, minimum notice are processed by the Department of Enterprise, Trade and Employment;
• the preferential creditor and unsecured creditor claims are agreed;
• Retention of Title claims are agreed;
• the Section 56 Report to the Director of Corporate Enforcement is submitted. In cases where the liquidator feels that the directors of the company have acted honestly and responsibly in relation to the running of the company, the liquidator will seek relief from his obligation to make a Section 150 application to the High Court. However, if a liquidator has evidence that one or more of the directors of the company did not act honestly and responsibly he will instruct his solicitor to issue proceedings under Section 150 of the Companies Acts 1963-2003 to restrict the errant directors.
• on the realisation of all the assets, the costs of the liquidation are paid;
• if there are surplus funds available the preferential creditor is paid;
• any remaining funds are distributed to the creditors, usually in the form of a dividend; and 
• a final meeting of the members and creditors is called. The final account is filed with the companies registration office. The company should be dissolved within 3 months of filing the final return.