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COMPANIES ACT 1990

COMPANIES ACT 1990 - LONG TITLE
AN ACT TO AMEND THE LAW RELATING TO COMPANIES AND TO PROVIDE FOR RELATED MATTERS.
[22nd December, 1990]
BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:
COMPANIES ACT 1990 - PART VI
- WINDING UP AND RELATED MATTERS
Registration of Charges
COMPANIES ACT 1990 - SECT 122
Amendment of section 99 of the Principle Act.
122.—Section 99 of The Principal Act is hereby amended—
( a ) in subsection (2), by the substitution for paragraph (h) of
the following paragraph—
"( h ) a charge on a ship or aircraft or any share in a ship
or aircraft;", and
( b ) by the insertion of the following subsections—
"(2A) The Minister may by regulations amend subsection (2) so as to
add any description of charge to, or remove any description of
charge from, the charges requiring registration under this section.
(2B) The power of the Minister under subsection (2A) shall include
a power to amend by regulations the description of any charge
referred to in subsection (2).
(2C) Every regulation made by the Minister under this section shall
be laid before each House of the Oireachtas as soon as may be
after it is made and, if a resolution annulling the regulation is
passed by either House within the next 21 days on which that House
has sat after the regulation is laid before it, the regulation
shall be annulled accordingly, but without prejudice to the validity
of any thing previously done thereunder.".
Winding Up by the Court
COMPANIES ACT 1990 - SECT 123
Amendment of sections 214 and 345 of Principal Act.
123.—Section 214 (a) (which relates to the circumstances in which a
company is unable to pay its debts) and Section 345(5) (a) (which
relates to unregistered companies) of The Principal Act are hereby
amended by the substitution in each case for "£50" of "£1,000".
COMPANIES ACT 1990 - SECT 124
Amendment of section 231 of the Principal Act.
124.—section 231 of the Principal Act is hereby amended by the
insertion after subsection (1) of the following subsection—
"(1A) (a) The liquidator of a company shall not sell by private
contract a non-cash asset of the requisite value to a person who
is, or who, within three years prior to the date of commencement
of the winding-up, has been, an officer of the company unless the
liquidator has given at least 14 days' notice of his intention to
do so to all creditors of the company who are known to him or
who have been intimated to him.
( b ) In this subsection—
(i) 'non-cash asset' and 'requisite value' have the meanings assigned
to them by section 29 of the Companies Act, 1990, and
(ii) 'officer' includes a person connected, within the meaning of
section 26 of the Companies Act, 1990, with a director, and a
shadow director.".
COMPANIES ACT 1990 - SECT 125
No lien over company's books, records etc.
125.—The Principal Act is hereby amended by the insertion after
section 244 of the following section—
"244A.—Where the court has appointed a provisional liquidator or a
company is being wound up by the court or by means of a
creditors' voluntary winding up, no person shall be entitled as
against the liquidator or provisional liquidator to withhold
possession of any deed, instrument, or other document belonging to
the company, or the books of account, receipts, bills, invoices, or
other papers of a like nature relating to the accounts or trade,
dealings or business of the company, or to claim any lien thereon
provided that—
( a ) where a mortgage, charge or pledge has been created by the
deposit of any such document or paper with a person, the production
of the document or paper to the liquidator or provisional liquidator
by the person shall be without prejudice to the person's rights
under the mortgage, charge or pledge (other than any right to
possession of the document or paper),
( b ) where by virtue of this section a liquidator or provisional
liquidator has possession of any document or papers of a receiver
or that a receiver is entitled to examine, the liquidator or
provisional liquidator shall, unless the court otherwise orders, make
the document or papers available for inspection by the receiver at
all reasonable times.".
COMPANIES ACT 1990 - SECT 126
Power of court to summon persons for examination.
126.—The Principal Act is hereby amended by the substitution for
section 245 of the following section—
"245.—(1) The court may, at any time after the appointment of a
provisional liquidator or the making of a winding-up order, summon
before it any officer of the company or person known or suspected
to have in his possession any property of the company or supposed
to be indebted to the company, or any person whom the court deems
capable of giving information relating to the promotion, formation,
trade, dealings, affairs or property of the company.
(2) The court may examine such person on oath concerning the
matters aforesaid, either by word of mouth or on written
interrogatories, and may reduce his answers to writing and require
him to sign them.
(3) The court may require such person to produce any accounting
records, deed, instrument, or other document or paper relating to
the company that are in his custody or power.
(4) The court may, before the examination takes place, require such
person to place before it a statement, in such form as the court
may direct, of any transactions between him and the company of a
type or class which the court may specify.
(5) If, in the opinion of the court, it is just and equitable to
do so, it may direct that the costs of the examination be paid by
the person examined.
(6) A person who is examined under this section shall not be
entitled to refuse to answer any question put to him on the ground
that his answer might incriminate him but none of the answers of
such person shall be admissible in evidence against him in any
other proceedings, civil or criminal, except in the case of any
criminal proceedings for perjury in respect of any such answer.
(7) If a person without reasonable excuse fails at any time to
attend his examination under this section, he shall be guilty of
contempt of court and liable to be punished accordingly.
(8) In a case where a person without reasonable excuse fails at
any time to attend his examination under this section or there are
reasonable grounds for believing that a person has absconded, or is
about to abscond, with a view to avoiding or delaying his
examination under this section, the court may cause that person to
be arrested and his books and documents and moveable personal
property to be seized and him and them to be detained until such
time as the court may order.".
COMPANIES ACT 1990 - SECT 127
Order for payment or delivery of property against person examined
under section 245 of Principal Act.
127.—The Principal Act is hereby amended by the insertion before
section 246 of the following section—
"245A.—If in the course of an examination under section 245 it
appears to the court that any person being examined.-
( a ) is indebted to the company, or
( b ) has in his possession or control any money, property or
books and papers of the company,
the court may order such person—
(i) to pay to the liquidator the amount of the debt or any part
thereof, or
(ii) to pay, deliver, convey, surrender or transfer to the
liquidator such money, property or books and papers or any part
thereof,
as the case may be, at such time and in such manner and on such
terms as the court may direct.".
Declaration of Solvency
COMPANIES ACT 1990 - SECT 128
Statutory declaration of solvency in case of proposal to wind up
voluntarily.
128.—The Principal Act is hereby amended by the substitution for
section 256 of the following section—
"256. (1) Where it is proposed to wind up a company voluntarily,
the directors of the company or, in the case of a company having
more than two directors, the majority of the directors may, at a
meeting of the directors, make a statutory declaration to the effect
that they have made a full inquiry into the affairs of the
company, and that having done so, they have formed the opinion that
the company will be able to pay its debts in full within such
period not exceeding 12 months from the commencement of the winding
up as may be specified in the declaration.
(2) A declaration made as aforesaid shall have no effect for the
purposes of this Act unless—
( a ) it is made within the 28 days immediately preceding the
date of the passing of the resolution for winding up the company
and delivered to the registrar of companies not later than the date
of the delivery to the registrar, in accordance with the provisions
of section 143, of a copy of the resolution for winding up the
company;
( b ) it embodies a statement of the company's assets and
liabilities as at the latest practicable date before the making of
the declaration and in any event at a date not more than three
months before the making of the declaration;
( c ) a report made by an independent person in accordance with
the provisions of this section is attached thereto;
( d ) it embodies a statement by the independent person referred
to in paragraph (c) that he has given and has not withdrawn his
written consent to the issue of the declaration with the report
attached thereto; and
( e ) a copy of the declaration is attached to the notice issued
by the company of the general meeting at which it is intended to
propose a resolution for voluntary winding up under paragraph (a) or
(b) of section 251 (1).
(3) The report referred to in paragraph (c) of subsection (2) shall
be made by an independent person, that is to say, a person
qualified at the time of the report to be appointed, or to
continue to be, auditor of the company.
(4) The report shall state whether, in his opinion and to the best
of his information and according to the explanations given to him—
( a ) the opinion of the directors referred to in subsection (1),
and
( b ) the statement of the company's assets and liabilities
embodied in the said declaration,
are reasonable.
(5) If within 28 days after the resolution for voluntary winding up
has been advertised under subsection (1) of section 252, a creditor
applies to the court for an order under this subsection, and the
court is satisfied that such creditor together with any creditors
supporting him in his application represents one-fifth at least in
number or value of the creditors of the company, and the court is
of opinion that it is unlikely that the company will be able to
pay its debts within the period specified in the declaration, the
court may order that all the provisions of this Act relating to a
creditors' voluntary winding up shall apply to the winding up.
(6) If the court orders that all the provisions of this Act in
relation to a creditors' voluntary winding up shall apply to the
winding up, the person who held the office of liquidator immediately
prior to the making of the order or, if no liquidator is acting,
the company shall within 21 days after the making of the order,
deliver an office copy of such order to the registrar of companies.
(7) If default is made in complying with subsection (6), any person
who is in default shall be liable to a fine not exceeding £1,000.
(8) Where a statutory declaration is made under this section and it
is subsequently proved to the satisfaction of the court that the
company is unable to pay its debts, the court on the application
of the liquidator or any creditor or contributory of the company
may, if it thinks it proper to do so, declare that any director
who was a party to the declaration without having reasonable grounds
for the opinion that the company would be able to pay its debts
in full within the period specified in the declaration shall be
personally responsible, without any limitation of liability, for all
or any of the debts or other liabilities of the company as the
court may direct.
(9) Where a company's debts are not paid or provided for in full
within the period stated in the declaration of solvency, it shall
for the purposes of subsection (8) be presumed, until the contrary
is shown, that the director did not have reasonable grounds for his
opinion.
(10) Where the court makes a declaration under subsection (8), it
may give such further directions as it thinks proper for the
purpose of giving effect to that declaration.
(11) A winding up in the case of which a declaration has been
made and delivered in accordance with this section is in this Act
referred to as 'a members' voluntary winding up' and a voluntary
winding up in the case of which a declaration has not been made
and delivered as aforesaid or in the case of which an order is
made under subsection (5) or in the case to which section 261 (3)
applies is in this Act referred to as 'a creditors' voluntary
winding up'.".
Provisions applicable to a Members' Voluntary Winding Up
COMPANIES ACT 1990 - SECT 129
Duty of liquidator to call creditors' meeting if he is of opinion
that company is unable to pay its debts.
129.—The Principal Act is hereby amended by the substitution for
section 261 of the following section to pay its debts.
"261.—(1) If the liquidator is at any time of the opinion that the
company will not be able to pay its debts in full within the
period stated in the declaration under section 256 he shall—
( a ) summon a meeting of creditors for a day not later than the
fourteenth day after the day on which he formed that opinion;
( b ) send notices of the creditors' meeting to the creditors by
post not less than seven days before the day on which that meeting
is to be held;
( c ) cause notice of the creditors' meeting to be advertised, at
least ten days before the date of the meeting, once in Iris Ofigi
il and once at least in two daily newspapers circulating in the
locality in which the company's principal place of business in the
State was situated during the relevant period; and
( d ) during the period before the day on which the creditors'
meeting is to be held, furnish creditors free of charge with such
information concerning the affairs of the company as they may
reasonably require;
and the notice of the creditors' meeting shall state the duty
imposed by paragraph (d).
(2) The liquidator shall also—
( a ) make out a statement in the prescribed form as to the
affairs of the company, including a statement of the company's
assets and liabilities, a list of the out standing creditors and
the estimated amount of their claims;
( b ) lay that statement before the creditors' meeting; and
( c ) attend and preside at that meeting.
(3) As from the day on which the creditors' meeting is held under
this section, the Companies Acts shall have effect as if—
( a ) without prejudice to the powers of the court under section
256, the directors' declaration under that section had not been
made; and
( b ) the creditors' meeting and the company meetings at which it
was resolved that the company be wound up voluntarily were the
meetings mentioned in section 266;
and, accordingly, the winding up shall become a creditors' voluntary
winding up and any appointment made or committee established by the
creditors' meeting shall be deemed to have been made or established
by the creditors' meeting so mentioned.
(4) The appointment of a liquidator at a meeting called under this
section shall not, subject to subsection (5), affect the validity of
any action previously taken by the liquidator appointed by the
members of the company.
(5) Where the creditors appoint a liquidator at a meeting called
under this section and there is a dispute as to any or all of
the costs, charges or expenses incurred by, including the
remuneration of, the liquidator appointed by the members of the
company, the liquidator appointed by the creditors, or any creditor,
may apply to the court to determine the dispute and the court may,
on such application, make such order as it deems fit.
(6) Nothing in this section shall be deemed to take away any right
in this Act of any person to present a petition to the court for
the winding up of a company.
(7) If the liquidator fails to comply with subsection (1) he shall
be liable to a fine.".
Provisions applicable to a Creditors' Voluntary Winding Up
COMPANIES ACT 1990 - SECT 130
Amendment of section 266 of the Principal Act.".
130.—Section 266 of the Principal Act is hereby amended by the
insertion in subsection (2) after "advertised" of the following:
"at least ten days before the date of the meeting,".
COMPANIES ACT 1990 - SECT 131
Creditors' voluntary winding up.
131.—(1) This section applies where, in the case of a creditors'
voluntary winding up, a liquidator has been nominated by the
company.
(2) The powers conferred on the liquidator by section 276 of the
Principal Act shall not be exercised, except with sanction of the
court, during the period before the holding of the creditors'
meeting under section 266 of that Act.
(3) Subsection (2) does not apply in relation to the power of the
liquidator—
( a ) to take into his custody or under his control all the
property to which the company is or appears to be entitled;
( b ) to dispose of perishable goods and other goods the value of
which is likely to diminish if they are not immediately disposed
of;
( c ) to do all such other things as may be necessary for the
protection of the company's assets.
(4) The liquidator shall attend the creditors' meeting held under
section 266 of the Principal Act and shall report to the meeting
on any exercise by him of his powers (whether or not under this
section or under section 276 or 280 of that Act).
(5) If default is made—
( a ) by the company in complying with subsection (1) or (2) of
section 266 of the Principal Act, or
( b ) by the directors in complying with subsection (3) of the
said section,
the liquidator shall, within 7 days of the relevant day, apply to
the court for directions as to the manner in which that default is
to be remedied.
(6) 'The relevant day" means the day on which the liquidator was
nominated by the company or the day on which he first became aware
of the default, whichever is the later.
(7) If a liquidator without reasonable excuse fails to comply with
this section, he shall be guilty of an offence.
Provisions applicable to every Voluntary Winding Up
COMPANIES ACT 1990 - SECT 132
Amendment of section 275 of the Principal Act.
132.—The Principal Act is hereby amended by the substitution for
section 275 of the following section—
"275.—(1) Subject to the provisions of this Act as to preferential
payments, the property of a company on its winding up—
( a ) shall, subject to subsection (2), be applied in satisfaction
of its liabilities pari passu, and
( b ) shall, subject to such application, and unless the articles
otherwise provide, be distributed among the members according to
their rights and interests in the company.
(2) Nothing in paragraph (a) of subsection (1) shall in any way
affect any rights or obligations of the company or any other person
arising as a result of any agreement entered into (whether before
or after the commencement of section 132 of the Companies Act,
1990) by any person under which any particular liability of the
company to any general creditor is postponed in favour of or
subordinated to the rights or claims of any other person to whom
the company may be in any way liable.
(3) In subsection (2)—
'liability' includes a contingent liability; and
'person' includes a class of persons.".
COMPANIES ACT 1990 - SECT 133
Consent to appointment as liquidator and notification of appointment.
133.—The Principal Act is hereby amended by the insertion after
section 276 of the following section—
"276A.—(1) The appointment of a liquidator shall be of no effect
unless the person nominated has, prior to his appointment, signified
his written consent to the appointment.
(2) The chairman of any meeting at which a liquidator is appointed
shall, within 7 days of the meeting, notify the liquidator in
writing of his appointment, unless the liquidator or his duly
authorised representative is present at the meeting where the
appointment is made.
(3) A person who fails to comply with subsection (2) shall be
liable to a fine not exceeding £1,000. ".
Provisions applicable to every Winding Up
COMPANIES ACT 1990 - SECT 134
Preferential payments in a winding up.
134.—section 285 of the Principal Act is hereby amended by the
payments in a insertion of the following subsection
"(14) The priority conferred by subsection (2) shall apply only to
those debts which, within the period of six months after
advertisement by the liquidator for claims in at least two daily
newspapers circulating in the district where the registered office of
the company is situated, either—
( a ) have been notified to him; or
( b ) have become known to him.".
COMPANIES ACT 1990 - SECT 135
Fraudulent preference.
135.—The Principal Act is hereby amended by the substitution for
section 286 of the following section—
"286.—(1) Subject to the provisions of this section, any conveyance,
mortgage, delivery of goods, payment, execution or other act relating
to property made or done by or against a company which is unable
to pay its debts as they become due in favour of any creditor, or
of any person on trust for any creditor, with a view to giving
such creditor, or any surety or guarantor for the debt due to such
creditor, a preference over the other creditors, shall, if a
winding-up of the company commences within 6 months of the making
or doing the same and the company is at the time of the
commencement of the winding-up unable to pay its debts (taking into
account the contingent and prospective liabilities), be deemed a
fraudulent preference of its creditors and be invalid accordingly.
(2) Any conveyance or assignment by a company of all its property
to trustees for the benefit of all its creditors shall be void to
all intents.
(3) A transaction to which subsection (1) applies in favour of a
connected person which was made within two years before the
commencement of the winding up of the company shall, unless the
contrary is shown, be deemed in the event of the company being
wound up—
( a ) to have been made with a view to giving such person a
preference over the other creditors, and
( b ) to be a fraudulent preference,
and be invalid accordingly.
(4) Subsections (1) and (3) shall not affect the rights of any
person making title in good faith and for valuable consideration
through or under a creditor of the company.
(5) In this section, 'a connected person' means a person who, at
the time the transaction was made, was—
( a ) a director of the company;
( b ) a shadow director of the company;
( c ) a person connected, within the meaning of section 26 (1)
(a) of the Companies Act, 1990, with a director;
( d ) a related company, within the meaning of section 140 of the
said Act, or
( e ) any trustee of, or surety or guarantor for the debt due
to, any person described in paragraph (a), (b), (c) or (d).".
COMPANIES ACT 1990 - SECT 136
Circumstances in which floating charge is invalid.
136.—The Principal Act is hereby amended by the substitution for
section 288 of the following section —
"288.— (1) Where a company is being wound up, a floating charge on
the undertaking or property of the company created within 12 months
before the commencement of the winding up shall, unless it is
proved that the company immediately after the creation of the charge
was solvent, be invalid, except as to money actually advanced or
paid, or the actual price or value of goods or services sold or
supplied, to the company at the time of or subsequently to the
creation of, and in consideration for, the charge, together with
interest on that amount at the rate of 5 per cent per annum.
(2) For the purposes of subsection (1) the value of any goods or
services sold or supplied by way of consideration for a floating
charge is the amount in money which at the time they were sold
supplied could reasonably have been expected to be obtained for the
goods or services in the ordinary course of business and on the
same terms (apart from the consideration) as those on which they
were sold or supplied to the company.
(3) Where a floating charge on the undertaking or property of a
company is created in favour of a connected person, subsection (1)
shall apply to such a charge as if the period of 12 months
mentioned in that subsection were a period of 2 years.
(4) In this section 'a connected person' means a person who, at
the time the transaction was made, was—
( a ) a director of the company;
( b ) a shadow director of the company;
( c ) a person connected, within the meaning of section 26 (1)
(a) of the Companies Act, 1990, with a director;
( d ) a related company, within the meaning of section 140 of the
said Act; or
( e ) any trustee of, or any surety or guarantor for the debt
due to, any person described in paragraph ( a ), (b), (c) or
(d).".
COMPANIES ACT 1990 - SECT 137
Criminal liability of persons concerned for fraudulent trading of
company.
137.—The Principal Act is hereby amended by the substitution for
section 297 of the following section
"297.—(1) If any person is knowingly a party to the carrying on of
the business of a company with intent to defraud creditors of the
company or creditors of any other person or for any fraudulent
purpose, that person shall be guilty of an offence.
(2) Any person who is convicted of an offence under this section
shall be liable—
( a ) on summary conviction to imprisonment for a term not
exceeding 12 months or to a fine not exceeding £1,000 or to both,
or
( b ) on conviction on indictment, to imprisonment for a term not
exceeding 7 years or to a fine not exceeding £50,000 or to both.".
COMPANIES ACT 1990 - SECT 138
Civil liability of persons concerned for fraudulent or reckless
trading of company.
138.—The Principal Act is hereby amended by the insertion after
section 297 of the following section
"297A.—(1) If in the course of winding up of a company or in the
course of proceedings under the Companies (Amendment) Act, 1990, it
appears that—
( a ) any person was, while an officer of the company, knowingly
a party to the carrying on of any business of the company in a
reckless manner; or
( b ) any person was knowingly a party to the carrying on of any
business of the company with intent to defraud creditors of the
company, or creditors of any other-person or for any fraudulent
purpose;
the court, on the application of the receiver, examiner, liquidator
or any creditor or contributory of the company, may, if it thinks
it proper to do so, declare that such person shall be personally
responsible, without any limitation of liability, for all or any
part of the debts or other liabilities of the company as the court
may direct.
(2) Without prejudice to the generality of subsection (1) ( a ),
an officer of a company shall be deemed to have been knowingly a
party to the carrying on of any business of the company in a
reckless manner if—
( a ) he was a party to the carrying on of such business and,
having regard to the general knowledge, skill and experience that
may reasonably be expected of a person in his position, he ought
to have known that his actions or those of the company would cause
loss to the creditors of the company, or any of them, or
( b ) he was a party to the contracting of a debt by the
company and did not honestly believe on reasonable grounds that the
company would be able to pay the debt when it fell due for
payment as well as all its other debts (taking into account the
contingent and prospective liabilities).
(3) Notwithstanding anything contained in subsection (1) the court
may grant a declaration on the grounds set out in paragraph (a)of
that subsection only if—
( a ) paragraph (a), ( b ) or (c)of section 214 applies to the
company concerned, and
( b ) an applicant for such a declaration, being a creditor or
contributory of the company. or any person on whose behalf such
application is made, suffered loss or damage as a consequence of
any behaviour mentioned in subsection (1).
(4) In deciding whether it is proper to make an order on the
ground set out in subsection (2) (b), the court shall have regard
to whether the creditor in question was, at the time the debt was
incurred, aware of the company's financial state of affairs and,
notwithstanding such awareness, nevertheless assented to the incurring
of the debt.
(5) On the hearing of an application under this section, the
applicant may himself give evidence or call witnesses.
(6) Where it appears to the court that any person in respect of
whom a declaration has been sought under subsection (1) ( a ), has
acted honestly and responsibly in relation to the conduct of the
affairs of the company or any matter or matters on the ground of
which such declaration is sought to be made, the court may, having
regard to all the circumstances of the case, relieve him either
wholly or in part, from personal liability on such terms as it may
think fit.
(7) Where the court makes any such declaration, it may—
( a ) give such further directions as it thinks proper for the
purpose of giving effect to that declaration and in particular may
make provision for making the liability of any such person under
the declaration a charge on any debt or obligation due from the
company to him, or on any mortgage or charge or any interest in
any mortgage or charge on any assets of the company held by or
vested in him or any company or person on his behalf, or any
person claiming as assignee from or through the person liable or
any company or person acting on his behalf, and may from time to
time make such further order as may be necessary for the purpose
of enforcing any charge imposed under this subsection;
( b ) provide that sums recovered under this section shall be paid
to such person or classes of persons, for such purposes, in such
amounts or proportions at such time or times and in such respective
priorities among themselves as such declaration may specify.
(8) Subsection (1) ( a ) shall not apply in relation to the
carrying on of the business of a company during a period when the
company is under the protection of the court.
(9) This section shall have effect notwithstanding that—
( a ) the person in respect of whom the declaration has been
sought under subsection (1) may be criminally liable in respect of
the matters on the ground of which such declaration is to be made;
or
( b ) any matter or matters on the ground of which the
declaration under subsection (1) is to be made have occurred outside
the State.
(10) For the purposes of this section—
'assignee' includes any person to whom or in whose favour, by the
directions of the person liable, the debt, obligation, mortgage or
charge was created, issued or transferred or the interest created,
but does not include an assignee for valuable consideration (not
including consideration by way of marriage) given in good faith and
without notice of any of the matters on the ground of which the
declaration is made;
'company' includes any body which may be wound up under the
Companies Acts; and
'officer' includes any auditor, liquidator, receiver, or shadow
director.".
COMPANIES ACT 1990 - SECT 139
Power of the court to order the return of assets which have been
improperly transferred.
139.—(1) Where, on the application of a liquidator, creditor or
contributory of a company which is being wound up, it can be shown
to the satisfaction of the court that—
( a ) any property of the company of any kind whatsoever was
disposed of either by way of conveyance, transfer, mortgage,
security, loan, or in any way whatsoever whether by act or
omission, direct or indirect, and
( b ) the effect of such disposal was to perpetrate a fraud on
the company, its creditors or members, the court may, if it deems
it just and equitable to do so, order any person who appears to
have the use, control or possession of such property or the
proceeds of the sale or development thereof to deliver it or pay a
sum in respect of it to the liquidator on such terms or conditions
as the court sees fit.
(2) Subsection (1) shall not apply to any conveyance, mortgage,
delivery of goods, payment, execution or other act relating to
property made or done by or against a company to which section 286
(1) of the Principal Act applies.
(3) In deciding whether it is just and equitable to make an order
under this section, the court shall have regard to the rights of
persons who have bona fide and for value acquired an interest in
the property the subject of the application.
COMPANIES ACT 1990 - SECT 140
Company may be required to contribute to debts of related companies.
140.—(1) On the application of the liquidator or any creditor or
contributory of any company that is being wound up, the court, if
it is satisfied that it is just and equitable to do so, may order
that any company that is or has been related to the company being
wound up shall pay to the liquidator of that company an amount
equivalent to the whole or part of all or any of the debts
provable in that winding up. Any order under this section may be
made on such terms and conditions as the court thinks fit.
(2) In deciding whether it is just and equitable to make an order
under subsection (1) the court shall have regard to the following
matters—
( a ) the extent to which the related company took part in the
management of the company being wound up;
( b ) the conduct of the related company towards the creditors of
the company being wound up;
( c ) the effect which such order would be likely to have on the
creditors of the related company concerned.
(3) No order shall be made under subsection (1) unless the court
is satisfied that the circumstances that gave rise to the winding
up of the company are attributable to the actions or omissions of
the related company.
(4) Notwithstanding any other provision, it shall not be just and
equitable to make an order under subsection (1) if the only ground
for making the order is—
( a ) the fact that a company is related to another company, or
( b ) that creditors of the company being wound up have relied on
the fact that another company is or has been related to the first
mentioned company.
(5) For the purposes of this Act, a company is related to another
company if—
( a ) that other company is its holding company or subsidiary; or
( b ) more than half in nominal value of its equity share capital
(as defined in section 155 (5) of the Principal Act) is held by
the other company and companies related to that other company
(whether directly or indirectly, but other than in a fiduciary
capacity); or
( c ) more than half in nominal value of the equity share capital
(as defined in section 155 (5) of the Principal Act) of each of
them is held by members of the other (whether directly or
indirectly, but other than in a fiduciary capacity); or
( d ) that other company or a company or companies related to
that other company or that other company together with a company or
companies related to it are entitled to exercise or control the
exercise of more than one half of the voting power at any general
meeting of the company; or
( e ) the businesses of the companies have been so carried on
that the separate business of each company, or a substantial part
thereof, is not readily identifiable; or
( f ) there is another company to which both companies are
related;
and "related company" has a corresponding meaning.
(6) For the purposes of this section "company" includes any body
which is liable to be wound up under the Companies Acts and
"creditor" means one or more creditors to whom the company being
wound up is indebted by more, in aggregate, than £10,000.
(7) Where an application for an order under subsection (1) seeks to
require a licensed bank, within the meaning of section 25, to
contribute to the debts of a related company, a copy of every such
application shall be sent by the applicant to the Central Bank who
shall be entitled to be heard by the court before an order is
made.
COMPANIES ACT 1990 - SECT 141
Pooling of assets of related companies.
141.—(1) Where two or more related companies are being wound up and
the court, on the application of the liquidator of any of the
companies, is satisfied that it is just and equitable to make an
order under this section, the court may order that, subject to such
terms and conditions as the court may impose and to the extent
that the court orders, the companies shall be wound up together as
if they were one company, and, subject to the provisions of this
section, the order shall have effect and all the provisions of this
Part and Part VI of The Principal Act shall apply accordingly.
(2) In deciding the terms and conditions of an order under this
section the court shall have particular regard to the interests of
those persons who are members of some, but not all, of the
companies.
(3) Where the court makes an order under subsection (1)—
( a ) the court may remove any liquidator of any of the
companies, and appoint any person to act as liquidator of any one
or more of the companies;
( b ) the court may give such directions as it thinks fit for
the purpose of giving effect to the order;
( c ) nothing in this section or the order shall affect the
rights of any secured creditor of any of the companies;
( d ) debts of a company that are to be paid in priority to all
other debts of the company pursuant to section 285 of the Principal
Act shall, to the extent that they are not paid out of the assets
of that company, be subject to the claims of holders of debentures
under any floating charge (as defined in that section) created by
any of the other companies;
( e ) unless the court otherwise orders, the claims of all
unsecured creditors of the companies shall rank equally among
themselves.
(4) In deciding whether it is just and equitable to make an order
under subsection (1) the court shall have regard to the following
matters—
( a ) the extent to which any of the companies took part in the
management of any of the other companies;
( b ) the conduct of any of the companies towards the creditors
of any of the other companies;
( c ) the extent to which the circumstances that gave rise to the
winding up of any of the companies are attributable to the actions
or omissions of any of the other companies;
( d ) the extent to which the businesses of the companies have
been intermingled.
(5) Notwithstanding any other provision, it shall not be just and
equitable to make an order under subsection (1) if the only ground
for making the order is—
( a ) the fact that a company is related to another company, or
( b ) that creditors of a company being wound up have relied on
the fact that another company is or has been related to the first
mentioned company.
(6) Notice of an application to the court for the purposes of this
section shall be served on every company specified in the
application, and on such other persons as the court may direct, not
later than the end of the eighth day before the day the
application is heard.
COMPANIES ACT 1990 - SECT 142
Amendment of section 298 of the Principle Act.
142.—The Principal Act is hereby amended by the substitution for
Amendment of section 298 of the following section—
"298.—(1) Subsection (2) applies if in the course of winding up a
company it appears that any person who has taken part in the
formation or promotion of the company, or any past or present
officer, liquidator, receiver or examiner of the company, has
misapplied or retained or become liable or accountable for any money
or property of the company, or has been guilty of any misfeasance
or other breach of duty or trust in relation to the company.
(2) The court may, on the application of the liquidator, or any
creditor or contributory, examine into the conduct of the promoter,
officer, liquidator, receiver or examiner, and compel him—
( a ) to repay or restore the money or property or any part
thereof respectively with interest at such rate as the court thinks
just, or
( b ) to contribute such sum to the assets of the company by way
of compensation in respect of the misapplication, retainer,
misfeasance or other breach of duty or trust as the court thinks
just.
(3) This section has effect notwithstanding that the offence is one
for which the offender may be criminally liable.".
COMPANIES ACT 1990 - SECT 143
Amendment of section 299 of the Principal Act .
143.—Section 299 of the Principle Act is hereby amended by the
subsection of the following subsection for subsection (1)—
"(1) If it appears to the court in the course of a winding-up by
the court that any past or present officer, or any member, of the
company has been guilty of an offence in relation to the company
for which he is criminally liable, the court may either on the
application of any person interested in the winding-up or of its
own motion direct the liquidator to refer the matter to the
Director of Public Prosecutions and in such a case the liquidator
shall furnish to the Director of Public Prosecutions such information
and give to him such access to and facilities for inspecting and
taking any copies of any documents, being information or documents
in the possession or under the control of the liquidator and
relating to the matter in question, as the Director of Public
Prosecutions may require.".
COMPANIES ACT 1990 - SECT 144
Duty of liquidators and receives to include certain information in
returns etc.
144.—(1) Where a receiver or liquidator of a company is obliged by
the Companies Acts to make a periodic account, abstract, statement
or return in relation to his activities as receiver or liquidator
he shall incorporate in such account, abstract, statement or return
a report as to whether, at the date of such account, abstract,
statement or return any past or present director or other officer,
or any member, of the company is a person—
( a ) in respect of whom a declaration has been made under any
provision of the Companies Acts that he should be personally liable
for all or any part of the debts of a company,
( b ) who is, or is deemed to be, subject to a disqualification
order under Part VII.
(2) A receiver or liquidator who contravenes subsection (1) shall be
guilty of an offence and liable to a fine.
COMPANIES ACT 1990 - SECT 145
Penalty for default of receiver or liquidator in making certain
accounts and returns.
145.—(1) Where a receiver or liquidator is in default in relation
to the making or filing of a periodic account, abstract, statement
or return in pursuance of any provision of the Companies Acts he
shall be guilty of an offence and liable—
( a ) on summary conviction to a fine not exceeding £1,000 and,
for continued contravention, to a daily default fine not exceeding
£50;
( b ) on conviction on indictment to a fine not exceeding £10,000
and, for continued contravention, to a daily default fine not
exceeding £250.
(2) A person convicted of an offence under any of the following
provisions, namely section 262, 272, 306, 319 (2) or 321 of The
Principal Act, shall, in lieu of the penalty provided in any such
section (as increased by section 15 of the Companies (Amendment)
Act, 1982),be liable to the penalties specified in subsection (1).
Supplementary Provisions
COMPANIES ACT 1990 - SECT 146
Disqualification for appointment as liquidator.
146.—The Principal Act is hereby amended by the insertion after
section 300 of the following section—
"300A.—(1) None of the following persons shall be qualified for
appointment as liquidator of a company—
( a ) a person who is, or who has within 12 months of the
commencement of the winding up been, an officer or servant of the
company;
( b ) except with the leave of the court, a parent, spouse,
brother, sister or child of an officer of the company;
( c ) a person who is a partner or in the employment of an
officer or servant of the company;
( d ) a person who is not qualified by virtue of this subsection
for appointment as liquidator of any other body corporate which is
that company's subsidiary or holding company or a subsidiary of that
company's holding company, or would be so disqualified if the body
corporate were a company.
References in this subsection to an officer or servant of the
company include references to an auditor.
(2) An application for leave under subsection (1) ( b ) shall be
supported by such evidence as the court may require.
(3) If a liquidator becomes disqualified by virtue of this section
he shall thereupon vacate his office and give notice in writing
within 14 days to—
( a ) the court in a court winding up,
( b ) the company in a members' voluntary winding up,
( c ) the company and the creditors in a creditors' voluntary
winding up,
that he has vacated it by reason of such disqualification.
(4) Any person who acts as a liquidator when disqualified by this
section from so doing or who fails to comply with subsection (3),
if that subsection applies to him, shall be guilty of an offence
and shall be liable—
( a ) on summary conviction, to a fine not exceeding £1,000 and,
for continued contravention, a daily default fine not exceeding £50;
( b ) on conviction on indictment, to a fine of £10,000 and, for
continued contravention, a daily default fine not exceeding £250.
(5) This section shall not apply to a winding-up commenced before
the commencement of section 146 of the Companies Act, 1990.".
COMPANIES ACT 1990 - SECT 147
Disclosure of interest by creditors etc. at creditors' meeting.
147.—The Principal Act is hereby amended by the insertion after
section 301 of the following section—
"301A.—(1) Where, at a meeting of creditors, a resolution is
proposed for the appointment of a liquidator, any creditor who has
a connection with the proposed liquidator shall, before the
resolution is put, make such connection known to the chairman of
the meeting who shall disclose that fact to the meeting, together
with details thereof.
(2) Subsection (1) shall also apply to any person at the meeting,
being a representative of a creditor and entitled to vote on the
resolution on his behalf.
(3) Where the chairman of a meeting of creditors has any such
connection as is mentioned in subsection (1), he shall disclose that
fact to the meeting, together with details thereof.
(4) For the purposes of this section, a person has a connection
with a proposed liquidator if he is—
( a ) a parent, spouse, brother, sister or child of, or
( b ) employed by, or a partner of,
the proposed liquidator.
(5) A person who fails to comply with this section shall be liable
to a fine not exceeding £1,000.
(6) In exercising its jurisdiction under section 267 (2) or 272 (2)
(which relate to the appointment or removal of a liquidator) the
court may have regard to any failure to comply with this section.".
COMPANIES ACT 1990 - SECT 148
Extension of power of court to assess damages against directors.
148.—(1) Subsection (2) applies if in the course of winding up a
company which is a subsidiary of another company, it appears that
any director of the subsidiary's holding company has misapplied or
retained or become liable or accountable for any money or property
of the subsidiary, or has been guilty of any misfeasance or other
breach of duty or trust in relation to the subsidiary.
(2) The court may, on the application of the liquidator, any
creditor or contributory of the subsidiary, examine into the conduct
of the director concerned and compel him—
( a ) to repay or restore the money or property or any part
thereof respectively with interest at such rate as the court thinks
just, or
( b ) to contribute such sum to the assets of the subsidiary by
way of compensation in respect of the misapplication, retainer,
misfeasance or other breach of duty or trust as the court thinks
just.