Strike off - Irish registered companies

What is a company strike off?

A company strike off is a process whereby a company is removed from the Register of Companies and ceases to exist. A company which has been struck off or dissolved can no longer trade, sell assets or make payments.

There are two types of strike off – voluntary and involuntary.

What is a voluntary strike off?

When a company is no longer needed, i.e. following a group reorganisation or the company ceased to trade and is no longer required, the directors may decide to apply to the Registrar of the Companies for the Company to be voluntarily struck off. When this decision is made internally by the business and the strike off process is initiated by the board the strike off is voluntary.

Before the company can make the strike off application the board needs to ensure that ALL of the following conditions are satisfied:

*Issued share capital is not to be reckoned when confirming that the amount of the assets of the company do not exceed €150

When the board is satisfied that all the above conditions are met they can commence the procedure.

What are the steps of voluntary strike off process?

Step 1.

A special resolution must be passed by the members, resolving to apply to the Registrar for the company to be struck off the register and that pending the determination of its application to be struck off, that the company will not carry on any business or incur any liabilities. The resolution must be made no more than 3 months before the application.

Step 2.

A letter of no objection from the Revenue Commissioners is required. The letter must be dated not more than three months before the date of the receipt of the application by the Companies Registration Office (the “CRO”).

Step 3.

An advertisement is placed in one daily newspaper published and circulated nationwide. This advertisement should appear in a newspaper published not more than 30 days prior to the delivery to the CRO of the application for voluntary strike off.

Step 4.

Deliver a form H15 to the CRO. This form can only be filed electronically via CORE and must be signed by all directors.

Can the strike off application be cancelled or withdrawn?

Once the duly completed strike off application is filed with the CRO the Registrar will publish a notice of the intention to strike the company off the register in the CRO Gazette. The company will be dissolved within 90 days of the notice unless an objection to the strike off is filed.

An objection to the strike off can be filed within 90 days of the publication of the notice by any person on the grounds that the one or more conditions as set out in the table above have not been satisfied.

The company can also request cancellation of the strike off within 90 days of the publication of the notice.

What is an involuntary strike off?

Some strike offs are initiated by the CRO. The strike offs initiated by the CRO are involuntary strike offs.

The Registrar can commence the strike off proceeding if:

• a company has failed to make an annual return for one year;
• Revenue Commissioners issued a notice under section 882(3) Taxes Consolidation Act 1997 where an incorporated company has not yet registered for taxes;
• the registrar has reasonable cause to believe that the requirement to have an EEA resident director is not being complied with;
• there are no current directors registered for the company;
• the company is being wound up and the Registrar has reasonable cause to believe that no liquidator is acting;
• the company is being wound up and the registrar has reasonable cause to believe that the affairs of the company are fully wound up and that the returns required to be made by the liquidator have not been made for a period of six consecutive months;

How  does the involuntary strike off work? Can it be stopped before the company is struck off and dissolved?

• The strike off process commences when the CRO issues a strike off notice (the “Notice”) to the company’s registered office address. The notice states the grounds for the strike off and explains the steps the company needs to take to stop the process.
• If the company did not take any action to stop the process, 28 days after the date of the notice, the CRO publishes a strike off notice in the CRO Gazette. At this stage it is still possible to stop the process by following the steps outlined in the Notice;
• 28 days after the notice was published in the CRO Gazette the company is struck off the register of companies and a notice dissolving the company is published in the CRO Gazette.
• The company is dissolved.

It may seem that involuntary strike off  can be an alternative solution to liquidation or voluntary strike off however the consequences of involuntary strike off are very serious.

What are the consequences of involuntary strike off?

• Company is dissolved and ceases to exist;
• Company’s assets become the property of the State;
• Banks will be unwilling to lend money and may freeze accounts of the Company if any;
• The liability (if any) of every director, officer and member^* of the company continues, after the company has been dissolved and may be enforced as if the company had not been dissolved;
• The protection of limited liability is lost where the business carries on trading;
• Directors of involuntary struck off companies may be disqualified by a High Court order made on the application of the Corporate Enforcement Authority from acting as directors or having any involvement in the management of any company. They may be also ordered to pay for the legal costs incurred by the Corporate Enforcement Authority in bringing such application and the costs incurred in investigating the matter. The length of the disqualification period is a matter for the Court.

Is the strike off and dissolution the end of a company?

A struck off company can be restored within 20 years from the date of dissolution.

If a company has been struck off for a period no longer that 12 months an application can be made to the Registrar of the Companies to restore the company by administrative order. If the 12 months already elapsed the application must be made to court.

*members’ liability is limited to any amount of unpaid capital only