Law & Regulation
Preparing for the New Companies Act 2014
By PWC
Mar 3, 2015 - 11:10:40 AM

The new Companies Act 2014 (“the Act”) is here and all companies will have to comply with this legislation once commenced. The greater the number of entities in the group the larger the costs will be for the group.

• Do you have dormant companies or companies which have ceased trading in your group?
• Have you considered group simplification to save time and money in complying with the new Act?

Now is the opportune time for organisations with a large number of companies to review their group structure. Reducing the number of companies now will reduce the impact the new Companies Act will have on your organisation and the resultant costs. There is also the added advantage of reduction in the annual costs incurred in maintaining these companies.

Dormant companies or those companies which have ceased trading should be reviewed and where solvent can consider applying for Voluntary Strike Off (VSO) or placing in Members Voluntary Liquidation (MVL).

Voluntary Strike Off (VSO)
Section 311 of the Companies Act, 1963, as amended, gives the Registrar of Companies power to strike companies off the register. This is a discretionary power which the Registrar will only use if the directors of a company furnish a statement to the effect that the company has ceased trading or has never traded, does not intend trading in the future, that it has no assets or liabilities exceeding EUR150 and that it wishes its name to be struck off the register.

For a VSO you should consider:

• Is the company up to date at the Companies Registration Office? 
• Do you have asset or liabilities greater than €150 ? 
• Do you have a Letter of No Objection from the Revenue Commissioners?

Once the application for VSO is submitted to the Companies Registration Office it takes approximately 3 months for the company to be dissolved. A company can apply to the Registrar to be restored within 12 months of strike off. Thereafter restoration can only take place by way of a Court Ordered Restoration. A creditor can apply to the Courts for the company to be restored for a period of up to 20 years.

Voluntary Strike Off (VSO)

• You must review the balance sheet and ensure assets or liabilities do not exceed €150 
• No statement of assets and liabilities required 
• No independent persons report required 
• Letter of no Objection from Revenue required 
• Company can be restored for a period of up to 20 years post dissolution 
• Most cost effective method of dissolution 
• 3-4 months to complete

Members Voluntary Liquidation (MVL)
The second option available to solvent companies is a Members Voluntary Liquidation.

An MVL involves:

• A statement of assets and liabilities must be prepared by the directors.
• A declaration of solvency is sworn by a majority of the directors and will contain the above statement and a report by an independent person (usually the auditors).
• A liquidator is appointed and will make a thorough inquiry into the affairs of the company to ensure that all liabilities are discharged and assets realised in advance of the dissolution.

Once the final winding up meeting has taken place and the final filings registered by the Companies Registration Office, a period of 3 months must elapse before the company is dissolved.

The dissolution can be voided during a period of 2 years post dissolution by way of a court ordered restoration.

Members Voluntary Liquidation (MVL)

• You must review the balance sheet to ensure the company is solvent 
• Statement of assets and liabilities required Independent persons report required 
• Formal tax clearance certificate required 
• Company can be restored for a period of up to 2 years post dissolution 
• Costs will include liquidators and independent persons fees 
• 6-12 months minimum to complete

Price Waterhouse Coopers
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