Companies (Amendment) (No. 2) Act 1999.

Notes: Number 30 of 1999 [15th December, 1999]

COMPANIES (AMENDMENT) (NO. 2) ACT, 1999

Table of Sections

PART I Preliminary and General

1. Short title,
collective citation, construction and commencement.

2. Interpretation generally.

3. Orders.

PART II Examinerships

4. Definition.

5. Amendment of section 2 of Act of 1990.

6. Amendment of section 3 of Act of 1990.

7. Pre-petition report in relation to company.

8. Amendment of section 3(5) of Act of 1990.

9. Interim protection pending report.

10. Creditors to be heard.

11. Availability of independent accountant’s report.

12. Amendment of section 4 of Act of 1990.

13. Duty to act in good faith.

14. Amendment of section 5 of Act of 1990.

15. Restriction on payment of pre-petition debts.

16. Amendment of section 6 of Act of 1990.

17. Disapplication of section 98 of Principal Act to receivers in certain
circumstances.

18. Repudiation of contracts.

19. Amendment of section 8 of Act of 1990.

20. Amendment of section 12 of Act of 1990.

21. Hearing regarding irregularities.

22. Amendment of section 18 of Act of 1990.

23. Amendment of section 23 of Act of 1990.

24. Amendment of section 24 of Act of 1990.

25. Provisions with respect to guarantees.

26. Provisions with respect to leases.

27. Amendment of section 27 of Act of 1990.

28. Priority of costs, remuneration and expenses of examiner.

29. Amendment of section 30 of Act of 1990.

30. Repeals.

PART III Exemption from requirement to have accounts audited

31. Definitions.

32. Exemption from requirement to have accounts audited.

PART I Preliminary and General

1.-#(1) This Act may be cited as the Companies (Amendment)
(No. 2) Act, 1999.

(2) The Companies Acts, 1963 to 1986, the Companies (Amendment) Act,
1990, the Companies Act, 1990, the Companies (Amendment) Act, 1999,
and this Act (other than section 40) may be cited together as the Companies
Acts, 1963 to 1999.

(3) The enactments referred to in subsection (2) shall be construed
together as one.

(4) This Act shall come into operation on such day or days as the Minister
may appoint by order or orders either generally or with reference to
any particular purpose or provision and different days may be so appointed
for different purposes or different provisions.

(5) The power under subsection (4) shall be so exercised that-

(a) the one day is appointed on which every provision of Part III (other
than subsections (2), (3) and (7) of section 33), the First Schedule
and the Second Schedule (in so far as it relates to the said Part) shall
come into operation, and

(b) the day appointed on which subsections (2), (3) and (7) of section
33 shall come into operation is the day that is 2 months earlier than
the said day.

2.-#(1) In this Act-

  • ”the Central Bank” means the Central Bank of Ireland;
  • ”the Principal Act” means the Companies Act, 1963.

(2) In this Act-

(a) a reference to a Part, section or Schedule is a reference to a
Part or section of, or a Schedule to, this Act unless it is indicated
that reference to some other enactment is intended,

(b) a reference to a subsection, paragraph or subparagraph is a reference
to the subsection, paragraph or subparagraph of the provision in which
the reference occurs unless it is indicated that reference to some other
provision is intended,

(c) a reference to any enactment is a reference to that enactment as
amended, extended or adapted by or under any subsequent enactment (including
this Act).

3.-#(1) The Minister may by order prescribe any matter
or thing which is referred to in this Act as prescribed or to be prescribed.

(2) The Minister may by order amend or revoke an order under this Act
(other than an order under section 1(4) but including an order under
this subsection).

(3) Every order under this Act (other than an order under section 1(4))
shall be laid before each House of the Oireachtas as soon as may be
after it is made and, if a resolution annulling the order is passed
by either such House within the next 21 days on which that House has
sat after the order is laid before it, the order shall be annulled accordingly
but without prejudice to the validity of anything previously done thereunder.

PART II Examinerships

4.-In this Part ”the Act of 1990” means the Companies
(Amendment) Act, 1990.

5.-Section 2 of the Act of 1990 is hereby amended-

(a) in subsection (1) (as amended by the Companies Act, 1990), by the
substitution for ”Where it appears to the court that” of ”Subject
to subsection (2), where it appears to the court that”, and

(b) by the substitution for subsection (2) of the following subsection:
**”(2) The court shall not make an order under this section unless
it is satisfied that there is a reasonable prospect of the survival
of the company and the whole or any part of its undertaking as a going
concern.”,**

  • and the said subsection (1), as so amended, is set out in the Table
    to this section.
  • TABLE

(1) Subject to subsection (2), where it appears to the court that-

(a) a company is or is likely to be unable to pay its debts, and

(b) no resolution subsists for the winding-up of the company, and

(c) no order has been made for the winding-up of the company,

  • it may, on application by petition presented, appoint an examiner
    to the company for the purpose of examining the state of the company’s
    affairs and performing such duties in relation to the company as may
    be imposed by or under this Act.

6.-Section 3 of the Act of 1990 is hereby amended by
the substitution of the following paragraphs for paragraph (b) of subsection
(2): **”(b) Where the company referred to in section 2 is-

(i) the holder of a licence under section 9 of the Central Bank Act,
1971,

(ii) a company which a building society has converted itself into under
Part XI of the Building Societies Act, 1989,

(iii) a company which one or more trustee savings banks have been reorganised
into pursuant to an order under section 57 of the Trustee Savings Banks
Act, 1989,

(iv) the ACC Bank public limited company,

(v) the ICC Bank public limited company, or

(vi) the ICC Investment Bank Limited,

  • a petition under section 2 may be presented only by the Central
    Bank, and subsection (1) of this section shall not apply to the company.

(c) Where the company referred to in section 2 is a company referred
to in the Second Schedule to the Companies (Amendment) (No. 2) Act,
1999, (not being a company referred to in paragraph 18, 19 or 20 of
that Schedule or to which paragraph (b) applies) the following provisions
shall apply-

(i) a petition under section 2 may be presented by-

(I) any of the persons referred to in paragraph (a), (b), (c) or (d)
of subsection (1) of this section (including by one or more of such
persons acting together),

(II) the Central Bank, or

(III) one or more of such persons and the Central Bank acting together,

(ii) if the Central Bank does not present such a petition-

(I) the petitioner shall, before he presents the petition at the office
of the court, cause to be received by the Central Bank a notice in writing
of his intention to present the petition, and shall serve a copy of
the petition on the Central Bank as soon as may be after the presentation
of it at the said office,

(II) the Central Bank shall be entitled to appear and be heard at any
hearing relating to the petition.”.**

7.-Section 3 of the Act of 1990 is hereby amended by
the insertion of the following subsections after subsection (3): **”(3A)
In addition to the matters specified in subsection (4), a petition presented
under section 2 shall be accompanied by a report in relation to the
company prepared by a person (in this Act referred to as ‘the independent
accountant’) who is either the auditor of the company or a person who
is qualified to be appointed as an examiner of the company.

(3B) The report of the independent accountant shall comprise the following:

(a) the names and permanent addresses of the officers of the company
and, in so far as the independent accountant can establish, any person
in accordance with whose directions or instructions the directors of
the company are accustomed to act,

(b) the names of any other bodies corporate of which the directors
of the company are also directors,

(c) a statement as to the affairs of the company, showing in so far
as it is reasonably possible to do so, particulars of the company’s
assets and liabilities (including contingent and prospective liabilities)
as at the latest practicable date, the names and addresses of its creditors,
the securities held by them respectively and the dates when the securities
were respectively given,

(d) whether in the opinion of the independent accountant any deficiency
between the assets and liabilities of the company has been satisfactorily
accounted for or, if not, whether there is evidence of a substantial
disappearance of property that is not adequately accounted for,

(e) his opinion as to whether the company, and the whole or any part
of its undertaking, would have a reasonable prospect of survival as
a going concern and a statement of the conditions which he considers
are essential to ensure such survival, whether as regards the internal
management and controls of the company or otherwise,

(f) his opinion as to whether the formulation, acceptance and confirmation
of proposals for a compromise or scheme of arrangement would offer a
reasonable prospect of the survival of the company, and the whole or
any part of its undertaking, as a going concern,

(g) his opinion as to whether an attempt to continue the whole or any
part of the undertaking would be likely to be more advantageous to the
members as a whole and the creditors as a whole than a winding-up of
the company,

(h) recommendations as to the course he thinks should be taken in relation
to the company including, if warranted, draft proposals for a compromise
or scheme of arrangement,

(i) his opinion as to whether the facts disclosed would warrant further
inquiries with a view to proceedings under section 297 or 297A of the
Principal Act,

(j) details of the extent of the funding required to enable the company
to continue trading during the period of protection and the sources
of that funding,

(k) his recommendations as to which liabilities incurred before the
presentation of the petition should be paid,

(l) his opinion as to whether the work of the examiner would be assisted
by a direction of the court in relation to the role or membership of
any creditor’s committee referred to in section 21, and

(m) such other matters as he thinks relevant.”.**

8.-Section 3 of the Act of 1990 is hereby amended by
the deletion in subsection (5) of ”, and until a prima facie case for
the protection of the court has been established to the satisfaction
of the court”, and the said subsection (5), as so amended, is set out
in the Table to this section.

  • TABLE

(5) The court shall not give a hearing to a petition under section
2 presented by a contingent or prospective creditor until such security
for costs has been given as the court thinks reasonable.

9.-The Act of 1990 is hereby amended by the insertion
of the following section after section 3: **”3A. (1) If a petition
presented under section 2 shows, and the court is satisfied-

(a) that, by reason of exceptional circumstances outside the control
of the petitioner, the report of the independent accountant is not available
in time to accompany the petition, and

(b) that the petitioner could not reasonably have anticipated the circumstances
referred to in paragraph (a),

  • and, accordingly, the court is unable to consider the making of
    an order under that section, the court may make an order under this
    section placing the company concerned under the protection of the
    court for such period as the court thinks appropriate in order to
    allow for the submission of the independent accountant’s report.

(2) That period shall be a period that expires not later than the 10th
day after the date of making of the order concerned or, if the 10th
day after that date would fall on a Saturday, Sunday or public holiday,
the first following day that is not a Saturday, Sunday or public holiday.

(3) For the avoidance of doubt, the fact that a receiver stands appointed
to the whole or any part of the property or undertaking of the company
at the time of the presentation of a petition under section 2 in relation
to the company shall not, in itself, constitute, for the purposes of
subsection (1), exceptional circumstances outside the control of the
petitioner.

(4) If the petition concerned has been presented by any of the persons
referred to in paragraph (c) or (d) of section 3(1) and an order under
subsection (1) is made in relation to the company concerned, the directors
of the company shall co-operate in the preparation of the report of
the independent accountant, particularly in relation to the matters
specified in paragraphs (a), (b) and (c) of section 3(3B).

(5) If the directors of the company concerned fail to comply with subsection
(4), the person who has presented the petition concerned or the independent
accountant may apply to the court for an order requiring the directors
to do specified things by way of compliance with subsection (4) and
the court may, as it thinks fit, grant such an order accordingly.

(6) If the report of the independent accountant is submitted to the
court before the expiry of the period of protection specified in an
order under subsection (1), the court shall proceed to consider the
petition together with the report as if they were presented in accordance
with section 2.

(7) If the report of the independent accountant is not submitted to
the court before the expiry of the period of protection specified in
an order under subsection (1), then, at the expiry of that period, the
company concerned shall cease to be under the protection of the court,
but without prejudice to the presentation of a further petition under
section 2.

(8) Any liabilities incurred by the company concerned during the period
of protection specified in an order under subsection (1) may not be
the subject of a certificate under section 10(2).”.**

10.-The Act of 1990 is hereby amended by the insertion
of the following section after section 3A (inserted by section 9): **”3B.
(1) The court shall not make an order dismissing a petition presented
under section 2 or an order appointing an examiner to a company without
having afforded each creditor of the company who has indicated to the
court his desire to be heard in the matter an opportunity to be so heard.

(2) Nothing in this section shall affect the power of the court under
section 3(7) to make an interim order in the matter.”.**

11.-The Act of 1990 is hereby amended by the insertion
of the following section after section 3B (inserted by section 10):
**”3C. #(1) The independent accountant shall supply a copy of the report
prepared by him under section 3(3A) to the company concerned or any
interested party on written application being made to him in that behalf.

(2) If the court, on application to it in that behalf, directs that
that supply may be the subject of such omission, there may be omitted
from any copy of the report supplied to the company or an interested
party such parts of it as are specified in the direction of the court.

(3) The court may, in particular, on such an application, direct that
there may be omitted from such a supply of a copy of the report any
information the inclusion of which in such a copy would be likely to
prejudice the survival of the company or the whole or any part of its
undertaking as a going concern.

(4) If the company concerned is a company referred to in section 3(2)(c)
and the Central Bank does not propose to present, or has not presented,
(whether alone or acting together with other persons) a petition under
section 2 in relation to the company, the independent accountant shall,
as soon as may be after it is prepared, supply a copy of the report
prepared by him under section 3(3A) to the Central Bank and subsections
(2) and (3) shall not apply to such a copy.”.**

12.-Section 4 of the Act of 1990 is hereby amended-

(a) in subsection (1), by the substitution for ”Where the court appoints
an examiner to a company” of ”Subject to subsection (2), where the
court appoints an examiner to a company”, and

(b) in subsection (2), by the insertion of the following at the end
of that subsection: **”and shall not, in any case, make such an order
unless it is satisfied that there is a reasonable prospect of the survival
of the related company, and the whole or any part of its undertaking,
as a going concern”,**

  • and the said subsections (1) and (2), as so amended, are set out
    in paragraphs 1 and 2, respectively, of the Table to this section.
  • TABLE
  • 1. (1) Subject to subsection (2), where the court appoints an examiner
    to a company, it may, at the same or any time thereafter, make an
    order-

(a) appointing the examiner to be examiner for the purposes of this
Act to a related company, or

(b) conferring on the examiner, in relation to such company, all or
any of the powers or duties conferred on him in relation to the first-mentioned
company.

  • 2. (2) In deciding whether to make an order under subsection (1),
    the court shall have regard to whether the making of the order would
    be likely to facilitate the survival of the company, or of the related
    company, or both, and the whole or any part of its or their undertaking,
    as a going concern and shall not, in any case, make such an order
    unless it is satisfied that there is a reasonable prospect of the
    survival of the related company, and the whole or any part of its
    undertaking, as a going concern.

13.-The Act of 1990 is hereby amended by the insertion
of the following section after section 4: **”4A. The court may decline
to hear a petition presented under section 2 or, as the case may be,
may decline to continue hearing such a petition if it appears to the
court that, in the preparation or presentation of the petition or in
the preparation of the report of the independent accountant, the petitioner
or independent accountant-

(a) has failed to disclose any information available to him which is
material to the exercise by the court of its powers under this Act,
or

(b) has in any other way failed to exercise utmost good faith.”.**

14.-Section 5 of the Act of 1990 is hereby amended-

(a) by the substitution for subsection (1) of the following subsection:
**”(1) Subject to section 3A, during the period beginning with the
date of the presentation of a petition under section 2 and (subject
to subsections (3) and (4) of section 18) ending on the expiry of 70
days from that date or on the withdrawal or refusal of the petition,
whichever first happens, the company shall be deemed to be under the
protection of the court.”,**

(b) in subsection (2)-

(i) by the substitution for paragraph (d) of the following paragraph:
**”(d) where any claim against the company is secured by a mortgage,
charge, lien or other encumbrance or a pledge of, on or affecting the
whole or any part of the property, effects or income of the company,
no action may be taken to realise the whole or any part of that security,
except with the consent of the examiner;”,**

  • and

(ii) by the deletion of paragraph (h) (inserted by the Companies Act,
1990).

15.-The Act of 1990 is hereby amended by the insertion
of the following section after section 5: **”5A. #(1) Subject to subsection
(2), no payment may be made by a company, during the period it is under
the protection of the court, by way of satisfaction or discharge of
the whole or a part of a liability incurred by the company before the
date of the presentation under section 2 of the petition in relation
to it unless the report of the independent accountant contains a recommendation
that the whole or, as the case may be, the part of that liability should
be discharged or satisfied.

(2) Notwithstanding subsection (1), the court may, on application being
made to it in that behalf by the examiner or any interested party, authorise
the discharge or satisfaction, in whole or in part, by the company concerned
of a liability referred to in subsection (1) if it is satisfied that
a failure to discharge or satisfy, in whole or in part, that liability
would considerably reduce the prospects of the company or the whole
or any part of its undertaking surviving as a going concern.”.**

16.-Section 6 of the Act of 1990 is hereby amended-

(a) in subsection (1), by the substitution for ”Where the court appoints
an examiner to a company and” of ”Where, at the date of the presentation
of a petition under section 2 in relation to a company,”,

(b) in subsection (2), by the substitution for ”Where the court appoints
an examiner to a company and” of ”Where, at the date of the presentation
of a petition under section 2 in relation to a company,”, and

(c) by the substitution for subsection (3) of the following subsection:
**”(3) The court shall not make an order under paragraph (a) or (b)
of subsection (1) or paragraph (c) of subsection (2) unless the court
is satisfied that there is a reasonable prospect of the survival of
the company, and the whole or any part of its undertaking, as a going
concern.”,**

  • and the said subsection (1), as so amended, (other than paragraphs
    (a) to (d) thereof) and the said subsection (2), as so amended, (other
    than paragraphs (a) to (e) thereof) are set out in paragraphs 1 and
    2, respectively, of the Table to this section.
  • TABLE
  • 1. (1) Where, at the date of the presentation of a petition under
    section 2 in relation to a company, a receiver stands appointed to
    the whole or any part of the property or undertaking of that company
    the court may make such order as it thinks fit including an order
    as to any or all of the following matters-
  • 2. (2) Where, at the date of the presentation of a petition under
    section 2 in relation to a company, a provisional liquidator stands
    appointed to that company, the court may make such order as it thinks
    fit including an order as to any or all of the following matters-

17.-The Act of 1990 is hereby amended by the insertion
of the following section after section 6: **”6A. (1) Without prejudice
to the generality of section 6 (1), the court, on application being
made in that behalf, may, in relation to a receiver who stands appointed
to the whole or any part of the property or undertaking of a company,
make an order providing that section 98 of the Principal Act shall not
apply as respects payments made by the receiver out of assets coming
into his hands as such receiver if-

(a) #(i) an examiner has been appointed to the company, or

(ii) an examiner has not been appointed to the company but, in the
opinion of the court, such an appointment may yet be made,

  • and

(b) the making of the order would, in the opinion of the court, be
likely to facilitate the survival of the company, and the whole or any
part of its undertaking, as a going concern.

(2) An order under subsection (1) shall not be made without each creditor
of the company of the following class being afforded an opportunity
to be heard, namely a creditor any of the debts owed to whom by the
company are debts which in a winding-up are, by virtue of the provisions
of Part VI of the Principal Act relating to preferential payments, required
to be paid in priority to all other debts.”.**

18.-Section 7 of the Act of 1990 is hereby amended by
the insertion of the following subsections after subsection (5): **”(5A)
Without prejudice to subsection (5B), nothing in this section shall
enable an examiner to repudiate a contract that has been entered into
by the company prior to the period during which the company is under
the protection of the court.

(5B) A provision referred to in subsection (5C) shall not be binding
on the company at any time after the service of the notice under this
subsection and before the expiration of the period during which the
company concerned is under the protection of the court if the examiner
is of the opinion that the provision, were it to be enforced, would
be likely to prejudice the survival of the company or the whole or any
part of its undertaking as a going concern and he serves a notice on
the other party or parties to the agreement in which the provision is
contained informing him or them of that opinion.

(5C) The provision referred to in subsection (5B) is a provision of
an agreement entered into by the company concerned and any other person
or persons at any time (including a time that is prior to the period
during which the company is under the protection of the court) that
provides that the company shall not, or shall not otherwise than in
specified circumstances-

(a) borrow moneys or otherwise obtain credit from any person other
than the said person or persons, or

(b) create or permit to subsist any mortgage, charge, lien or other
encumbrance or any pledge over the whole or any part of the property
or undertaking of the company.”.**

19.-Section 8 of the Act of 1990 is hereby amended by
the substitution for subsection (5) and subsection (5A) (inserted by
the Companies Act, 1990) of the following subsections: **”(5) If any
officer or agent of such company or other person-

(a) refuses to produce to the examiner any book or document which it
is his duty under this section to produce, or

(b) refuses to attend before the examiner when requested to do so,
or

(c) refuses to answer any question which is put to him by the examiner
with respect to the affairs of the company,

  • the examiner may certify the refusal under his hand to the court,
    and the court may thereupon enquire into the case and, after hearing
    any witnesses who may be produced against or on behalf of the said
    officer, agent or other person or any statement which may be offered
    in defence, make any order or direction it thinks fit.

(5A) Without prejudice to the generality of subsection (5), the court
may, after a hearing under that subsection, make a direction-

(a) to the person concerned to attend or re-attend before the examiner
or produce particular books or documents or answer particular questions
put to him by the examiner, or

(b) that the person concerned need not produce a particular book or
document or answer a particular question put to him by the examiner.”.**

20.-#(1) Section 12 of the Act of 1990 is hereby amended
by the substitution for paragraph (a) of subsection (2) of the following
paragraph: **”(a) An examiner shall, within the time limits specified
in paragraph (b), cause to be published in Iris Oifigiúil and in at
least two daily newspapers circulating in the district in which the
registered office or principal place of business of the company is situate
a notice of his appointment and the date thereof.”.**

(2) Section 12 of the Act of 1990 is hereby further amended by the
substitution for subsection (4) of the following subsection: **”(4)
Where a company is, by virtue of section 5, deemed to be under the protection
of the court, every invoice, order for goods or business letter issued
by or on behalf of the company, being a document on or in which the
name of the company appears, shall, immediately after the mention of
that name, include the words ‘in examination (under the Companies (Amendment)
Act, 1990)’.”.**

21.-The Act of 1990 is hereby amended by the insertion
of the following section after section 13: **”13A. (1) Where, arising
out of the presentation to it of the report of the independent accountant
or otherwise, it appears to the court that there is evidence of a substantial
disappearance of property of the company concerned that is not adequately
accounted for, or of other serious irregularities in relation to the
company’s affairs having occurred, the court shall, as soon as it is
practicable, hold a hearing to consider that evidence.

(2) If, before the hearing referred to in subsection (1) is held, the
court directs the examiner to do so, the examiner shall prepare a report
setting out any matters which he considers will assist the court in
considering the evidence concerned on that hearing.

(3) The examiner shall supply a copy of a report prepared by him under
subsection (2) to the company concerned on the same day as he causes
the report to be delivered to the office of the court.

(4) The examiner shall also supply a copy of a report prepared by him
under subsection (2) to each person who is mentioned in the report and
any interested party on written application being made to him in that
behalf.

(5) If the court, on application to it in that behalf, directs that
that supply may be the subject of such omission, there may be omitted
from any copy of the report supplied to a person referred to in subsection
(4) or an interested party such parts of it as are specified in the
direction of the court.

(6) The court may, in particular, on such an application, direct that
there may be omitted from such a supply of a copy of the report any
information the inclusion of which in such a copy would be likely to
prejudice the survival of the company or the whole or any part of its
undertaking as a going concern.

(7) The examiner shall, as soon as may be after it is prepared, supply
a copy of the report prepared by him under subsection (2) to-

(a) if the company concerned is a company referred to in paragraph
(a) of section 3(2), the Minister, or

(b) if the company concerned is a company referred to in paragraph
(b) or (c) of section 3(2), the Central Bank,

  • and subsections (5) and (6) shall not apply to such a copy.

(8) The following persons shall be entitled to appear and be heard
at a hearing under this section-

(a) the examiner,

(b) if the court decided to hold a hearing under this section because
of matters contained in the report of the independent accountant, the
independent accountant,

(c) the company concerned,

(d) any interested party,

(e) any person who is referred to in the report of the independent
accountant or the report prepared under subsection (2),

(f) if the company concerned is a company referred to in paragraph
(a) of section 3 (2), the Minister,

(g) if the company concerned is a company referred to in paragraph
(b) or (c) of section 3(2), the Central Bank.

(9) The court may, on a hearing under this section, make such order
or orders as it deems fit (including, where appropriate, an order for
the trial of any issue relating to the matter concerned).

(10) The court may, if it considers it appropriate to do so, direct
that an office copy of an order under subsection (9) shall be delivered
to the registrar of companies by the examiner or such other person as
it may specify.”.**

22.-Section 18 of the Act of 1990 is hereby amended-

(a) by the substitution of the following subsection for subsection
(1): **”(1) An examiner shall-

(a) as soon as practicable after he is appointed, formulate proposals
for a compromise or scheme of arrangement in relation to the company
concerned,

(b) without prejudice to any other provision of this Act, carry out
such other duties as the court may direct him to carry out.”,**

(b) in subsection (2), by the deletion of all the words from ”to consider
such proposals” to the end of that subsection and the substitution
of the following: **”for the purpose of section 23 and shall report
on those proposals to the court, within 35 days of his appointment or
such longer period as the court may allow, in accordance with section
19.”,**

(c) in subsection (3), by the substitution of ”70 days” for ”three
months”,

(d) by the substitution of the following subsections for subsections
(5) and (6): **”(5) The examiner shall supply a copy of his report
under this section-

(a) to the company concerned on the same day as he causes the report
to be delivered to the office of the court, and

(b) to any interested party on written application being made to him
in that behalf.

(6) The examiner shall, as soon as may be after it is prepared, supply
a copy of his report under this section to-

(a) if the company concerned is a company referred to in paragraph
(a) of section 3(2), the Minister, or

(b) if the company concerned is a company referred to in paragraph
(b) or (c) of section 3(2), the Central Bank.

(7) If the court, on application to it in that behalf, directs that
that supply may be the subject of such omission, there may be omitted
from any copy of the report supplied under subsection (5)(b) to an interested
party such parts of it as are specified in the direction of the court.

(8) The court may, in particular, on such an application, direct that
there may be omitted from such a supply of a copy of the report any
information the inclusion of which in such a copy would be likely to
prejudice the survival of the company or the whole or any part of its
undertaking as a going concern.

(9) If the examiner is not able to enter into an agreement with the
interested parties and any other persons concerned in the matter or
formulate proposals for a compromise or scheme of arrangement in relation
to the company concerned, he may apply to the court for the grant of
directions in the matter and the court may, on such application, give
such directions or make such order as it deems fit, including, if it
considers it just and equitable to do so, an order for the winding-up
of the company.”,**

  • and the said subsections (2) and (3), as so amended, are set out
    in paragraphs 1 and 2, respectively, of the Table to this section.
  • TABLE
  • 1. (2) Notwithstanding any provision of the Companies Acts relating
    to notice of general meetings, (but subject to notice of not less
    than 3 days in any case) the examiner shall convene and preside at
    such meetings of members and creditors as he thinks proper, for the
    purpose of section 23 and shall report on those proposals to the court,
    within 35 days of his appointment or such longer period as the court
    may allow, in accordance with section 19.
  • 2. (3) Where, on the application of the examiner, the court is satisfied
    that the examiner would be unable to report to the court within the
    period of 70 days referred to in section 5(1) but that he would be
    able to make a report if that period were extended, the court may
    by order extend that period by not more than 30 days to enable him
    to do so.

23.-Section 23 of the Act of 1990 is hereby amended-

(a) in subsection (1), by the substitution for ”compromise or scheme
of arrangement.” of ”compromise or scheme of arrangement; save where
expressly provided otherwise in this section, this section shall not
authorise, at such a meeting, anything to be done in relation to such
proposals by any member or creditor.”,

(b) by the deletion of subsection (3),

(c) by the insertion of the following subsection after subsection (4):
**”(4A) Nothing in subsection (4) shall, in the case of a creditor
who abstains from voting, or otherwise fails to cast a vote, in respect
of the proposals, be construed as permitting such an abstention or failure
to be regarded as a casting by that person of a vote against the proposals.”,**

(d) in subsection (6), by the deletion of ”(3) or”,

  • and

(e) by the addition of the following subsection after subsection (8):
**”(9) Without prejudice to subsections (1) to (8), in the case of
a company referred to in paragraph (b) or (c) of section 3(2), the examiner
shall also afford the Central Bank an opportunity to consider the proposals
for a compromise or scheme of arrangement and for this purpose shall
furnish to the Central Bank a statement containing the like information
to that referred to in subsection (8).”,**

  • and the said subsections (1) and (6), as so amended, are set out
    in paragraphs 1 and 2, respectively, of the Table to this section.
  • TABLE
  • 1. (1) This section applies to a meeting of members or creditors
    or any class of members or creditors summoned to consider proposals
    for a compromise or scheme of arrangement; save where expressly provided
    otherwise in this section, this section shall not authorise, at such
    a meeting, anything to be done in relation to such proposals by any
    member or creditor.
  • 2. (6) Section 144 of the Principal Act shall apply to any resolution
    to which subsection (4) relates which is passed at any adjourned meeting.

24.-Section 24 of the Act of 1990 is hereby amended-

(a) in subsection (2), by the addition of the following paragraph after
paragraph (c): **”(d) in case the company is a company referred to
in paragraph (b) or (c) of section 3(2), the Central Bank.”,**

(b) in subsection (4), by the substitution of the following paragraph
for paragraph (a): **”(a) unless at least one class of creditors whose
interests or claims would be impaired by implementation of the proposals
has accepted the proposals, or”,**

(c) by the insertion of the following subsection after subsection (4):
**”(4A) Without prejudice to subsection (4), the court shall not confirm
any proposals in respect of a company to which an examiner has been
appointed under section 4 if the proposals would have the effect of
impairing the interests of the creditors of the company in such a manner
as to favour the interests of the creditors or members of any company
to which it is related, being a company to which that examiner has been
appointed examiner under section 2 or, as the case may be, 4.”,**

(d) in subsection (11), by the deletion in paragraph (b) of ”members
and”,

  • and

(e) by the substitution of the following subsection for subsection
(12) (inserted by the Companies Act, 1990): **”(12) Notwithstanding
subsection (4), or any other provision of this Act, nothing in this
Act shall prevent the examiner from including in a report under section
18 proposals which will not involve the impairment of the interests
of members or creditors of the company, nor the court from confirming
any such proposals.”,**

  • and the said paragraph (b) of the said subsection (11), as so amended,
    is set out in the Table to this section.
  • TABLE
  • (b) the report of an examiner under section 18 concludes that, following
    the required meetings of creditors of a company under this Act, it
    has not been possible to reach agreement on a compromise or scheme
    of arrangement.

25.-The Act of 1990 is hereby amended by the insertion
of the following section after section 25: **”25A. #(1) The following
provisions shall have effect in relation to the liability of any person
(‘the third person’) whether under a guarantee or otherwise, in respect
of a debt (‘the debt’) of a company to which an examiner has been appointed:

(a) subject to paragraph (b) and save where the contrary is provided
in an agreement entered into by the third person and the person to whom
he is liable in respect of the debt (‘the creditor’), the liability
shall, notwithstanding section 24(6), not be affected by the fact that
the debt is the subject of a compromise or scheme of arrangement that
has taken effect under section 24(9),

(b) neither paragraph (a) nor any of the subsequent provisions of this
subsection shall apply if the third person is a company to which an
examiner has been appointed,

(c) if the creditor proposes to enforce by legal proceedings or otherwise
the obligation of the third person in respect of the liability, then-

(i) he shall-

(I) if 14 days’ or more notice is given of such meeting, at least 14
days before the day on which the meeting concerned under section 23
to consider the proposals is held, or

(II) if less than 14 days’ notice is given of such meeting, not more
than 48 hours after he has received notice of such meeting,

  • serve a notice on the third person containing an offer in writing
    by the creditor to transfer to the third person (which the creditor
    is hereby empowered to do) any rights, so far as they relate to the
    debt, he may have under section 23 to vote in respect of proposals
    for a compromise or scheme of arrangement in relation to the company,

(ii) if the said offer is accepted by the third person, that offer
shall, if the third person furnishes to the examiner at the meeting
concerned a copy of the offer and informs the examiner of his having
accepted it, operate, without the necessity for any assignment or the
execution of any other instrument, to entitle the third person to exercise
the said rights, but neither the said transfer nor any vote cast by
the third person on foot of the transfer shall operate to prejudice
the right of the creditor to object to the proposals under section 25,

(iii) if the creditor fails to make the said offer in accordance with
subparagraph (ii), then, subject to subparagraph (iv), the creditor
may not enforce by legal proceedings or otherwise the obligation of
the third person in respect of the liability,

(iv) subparagraph (iii) shall not apply if a compromise or scheme of
arrangement in relation to the company is not entered into or does not
take effect under section 24(9) and the creditor has obtained the leave
of the court to enforce the obligation of the third person in respect
of the liability,

(d) if the third person makes a payment to the creditor in respect
of the liability after the period of protection has expired, then any
amount that would, but for that payment, be payable to the creditor
in respect of the debt under a compromise or scheme of arrangement that
has taken effect under section 24(9) in relation to the company shall
become and be payable to the third person upon and subject to the same
terms and conditions as the compromise or scheme of arrangement provided
that it was to be payable to the creditor.

(2) Nothing in subsection (1) shall affect the operation of-

(a) section 5(2)(f), or

(b) any rule of law whereby any act done by the creditor referred to
in that subsection results in the third person referred to therein being
released from his obligation in respect of the liability concerned.”.**

26.-The Act of 1990 is hereby amended by the insertion
of the following section after section 25A (inserted by section 25):
**”25B. (1) Subject to subsection (3), proposals for a compromise or
scheme of arrangement shall not contain, nor shall any modification
by the court under section 24 of such proposals result in their containing,
a provision providing for either or both-

(a) a reduction in the amount of any rent or other periodical payment
reserved under a lease of land that falls to be paid after the compromise
or scheme of arrangement would take effect under section 24(9) or the
complete extinguishment of the right of the lessor to any such payments,

(b) as respects a failure-

(i) to pay an amount of rent or make any periodical payment reserved
under a lease of land, or

(ii) to comply with any other covenant or obligation of such a lease,

  • that falls to be paid or complied with after the date referred to
    in paragraph (a), a requirement that the lessor under such a lease
    shall not exercise, or shall only exercise in specified circumstances,
    any right, whether under the lease or otherwise, to recover possession
    of the land concerned, effect a forfeiture of the lease or otherwise
    enter on the land or to recover the amount of such rent or other payment
    or to claim damages or other relief in respect of the failure to comply
    with such a covenant or obligation.

(2) Subject to subsection (3), proposals for a compromise or scheme
of arrangement in relation to a company shall not be held by the court
to satisfy the condition specified in paragraph (c)(ii) of section 24(4)
if the proposals contain a provision relating to a lease of, or any
hiring agreement in relation to, property other than land and, in the
opinion of the court-

(a) the value of that property is substantial, and

(b) the said provision is of like effect to a provision referred to
in paragraph (a) or (b) of subsection (1).

(3) Subsection (1) or (2) shall not apply if the lessor or owner of
the property concerned has consented in writing to the inclusion of
the provision referred to in subsection (1) or (2) in the proposals
for the compromise or scheme of arrangement.

(4) In deciding, for the purposes of subsection (2), whether the value
of the property concerned is substantial the matters to which the court
shall have regard shall include the length of the unexpired term of
the lease or hiring agreement concerned.”.**

27.-Section 27 of the Act of 1990 is hereby amended-

(a) by the insertion of ”(1)” before ”The company or any interested
party”, and

(b) by the addition of the following subsection: **”(2) As soon as
practicable after the revocation under this section of such a confirmation,
a copy of the order made by the court shall be delivered to-

(a) the registrar of companies,

(b) in case the company to which the order relates is a company referred
to in paragraph (a) of section 3 (2), the Minister, and

(c) in case the company to which the order relates is a company referred
to in paragraph (b) or (c) of section 3(2), the Central Bank,

  • by such person as the court may direct.”.**

28.-Section 29 of the Act of 1990 is hereby amended
by the substitution for subsection (3) of the following subsections:
**”(3) The remuneration, costs and expenses of an examiner which have
been sanctioned by order of the court (other than the expenses referred
to in subsection (3A)) shall be paid in full and shall be paid before
any other claim, secured or unsecured, under any compromise or scheme
of arrangement or in any receivership or winding-up of the company to
which he has been appointed.

(3A) Liabilities incurred by the company to which an examiner has been
appointed that, by virtue of section 10(1), are treated as expenses
properly incurred by the examiner shall be paid in full and shall be
paid before any other claim (including a claim secured by a floating
charge), but after any claim secured by a mortgage, charge, lien or
other encumbrance of a fixed nature or a pledge, under any compromise
or scheme of arrangement or in any receivership or winding-up of the
company to which he has been appointed.

(3B) In subsections (3) and (3A) references to a claim shall be deemed
to include references to any payment in a winding-up of the company
in respect of the costs, charges and expenses of that winding-up (including
the remuneration of any liquidator).”.**

29.-Section 30 of the Act of 1990 is hereby amended
by the substitution in subsection (1) of ”section 13A, 24 or 27” for
”section 17 or 24” and the said subsection (1), as so amended, is
set out in the Table to this section.

  • TABLE
  • (1) An examiner or, where appropriate, such other person as the
    court may direct, shall, within 14 days after the delivery to the
    registrar of companies of every order made under section 13A, 24 or
    27, cause to be published in Iris Oifigiúil notice of such delivery.

30.-The following provisions of the Act of 1990 are
hereby repealed-

  • paragraphs (b) and (c) of section 3(3), sections 14, 15, 16 and
    17.

PART III Exemption from requirement to have accounts audited

31.-In this Part-

  • ”the Act of 1986” means the Companies (Amendment) Act, 1986;
  • ”the exemption” means the non-application, by virtue of section
    32, of section 160 of the Principal Act and the provisions referred
    to in subsection (2) of section 32;
  • ”financial year” means the financial year of the company concerned;
  • ”private company” does not include an unlimited company other
    than such a company (being a private company) to which Part III of
    the 1993 Regulations applies;
  • ”the 1993 Regulations” means the European Communities (Accounts)
    Regulations, 1993 (S.I. No. 396 of 1993).

32.-#(1) Subject to section 33(1), if-

(a) the directors of a private company are of opinion that the company
will satisfy the conditions specified in subsection (3) in respect of
a financial year and decide that the company should avail itself of
the exemption in that year (and they record that decision in the minutes
of the meeting concerned), and

(b) unless that financial year is the first financial year of the company,
the company satisfied the said conditions in respect of the preceding
financial year,

  • then-

(i) without prejudice to section 35, section 160 of the Principal Act
(which requires the appointment of an auditor to a company) shall not
apply to the said company in respect of that financial year, and

(ii) unless and until circumstances, if any, arise in that financial
year which result in one or more of the said conditions not being satisfied
in respect of that year, the provisions mentioned in subsection (2)
shall not apply to the said company in respect of that year.

(2) The provisions mentioned in subsection (1) are those provisions
of the Companies Acts, 1963 to 1999, (other than this Part) the 1993
Regulations and the European Communities (Single – Member Private Limited
Companies) Regulations, 1994 (S.I. No. 275 of 1994), that apply to the
company, being provisions that-

(a) confer any powers on an auditor or require anything to be done
by or to or as respects an auditor,

(b) make provision on the basis of a report of an auditor having been
prepared in relation to the accounts of the company in a financial year,

  • and, without prejudice to the generality of the foregoing, include
    the provisions specified in the First Schedule.

(3) The conditions mentioned in subsection (1) are that-

(a) in respect of the year concerned-

(i) the company is a company to which the Act of 1986 applies,

(ii) the amount of the turnover of the company does not exceed £250,000,

(iii) the balance sheet total of the company does not exceed £1,500,000,

(iv) the average number of persons employed by the company does not
exceed 50,

(v) the company is not-

(I) a parent undertaking or a subsidiary undertaking (within the meaning
of the European Communities (Companies: Group Accounts) Regulations,
1992 (S.I. No. 201 of 1992)),

(II) a holder of a licence under section 9 of the Central Bank Act,
1971, or a company that is exempt from the requirement under that Act
to hold such a licence,

(III) a company to which the European Communities (Insurance Undertakings:
Accounts) Regulations, 1996 (S.I. No. 23 of 1996) apply, or

(IV) a company referred to in the Second Schedule (other than paragraph
18 thereof),

  • and

(b) a failure to comply with the requirement of section 127(1) of the
Principal Act as regards the forwarding, to the registrar of companies,
of an annual return in respect of the company does not occur in the
year concerned.

(4) In this section ”amount of turnover” and ”balance sheet total”
have the same meaning as they have in section 8 of the Act of 1986.

(5) For the purpose of subsection (3)(a)(iv), the average number of
persons employed by a company shall be determined by applying the method
of calculation prescribed by paragraph 42(4) of the Schedule to the
Act of 1986 for determining the number required by subparagraph (1)
of that paragraph to be stated in a note to the accounts of a company.

(6) In the application of this section to any period which is a financial
year of a company, but is not in fact a year, the amount specified in
subsection (3)(a)(ii) shall be proportionally adjusted.

(7) Each occasion of an amendment of the kind referred to in subsection
(8) being effected shall operate to enable the Minister to amend, by
order, subparagraphs (ii) and (iii) of subsection (3)(a) by substituting
for the amount and the total, respectively, specified in those provisions
a greater amount and total (not being an amount or total that is greater
than the amount or total it replaces by 25 per cent.).

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