Ireland · Winding up, strike off and restoration

Distribution in a winding up: preferential payments, proof of debts and unclaimed dividends

the Companies Act 2014 · sections 618 to 623

Preference is capped and it is time limited, and both limits catch employees and advisers who assume otherwise. The sum to which priority is given under section 621(2)(b) may not, in the case of any one claimant, exceed 10,000 euro, subject to section 621(5) (section 621(4)). The priority conferred by section 621(2) applies only to those debts notified within the period of 6 months after the date of the liquidator's advertisement for claims in at least two daily newspapers (section 622(6)).

Unclaimed money does not stay with the liquidator. Where a company has been wound up and is about to be dissolved, the liquidator must lodge the whole unclaimed amount to the prescribed account in the manner prescribed (section 623(1)). Where money invested or deposited at interest by the liquidator forms part of that amount, section 623(4) sets what the liquidator must do.

Subject to the provisions on preferential payments, the property of a company on its winding up is applied in satisfaction of its liabilities pari passu, subject to section 618(2) (section 618(1)). In the winding up of an insolvent company the same rules prevail as to the respective rights of secured and unsecured creditors, the debts provable and the valuation of annuities and future and contingent liabilities (section 619(1)). The value of debts and claims admissible to proof is estimated, so far as possible, according to their value at the date section 620(2) identifies.

Section 621(2) lists the debts paid in priority to all others, beginning with the rates and taxes it names. Those debts rank equally among themselves and are paid in full unless the assets are insufficient, in which case they abate in equal proportions (section 621(7)), and, subject to the retention of sums needed for the costs and expenses of the winding up, they are discharged forthwith so far as the assets allow (section 621(8)).

Working file 100 of the IE-COMPANY agent toolkit covers this situation on its own. It works through the claims received, the date of the advertisement, which claims arrived inside the 6-month window, which qualify for priority and under which paragraph of section 621(2), how the 10,000 euro cap was applied to each claimant, and how unclaimed dividends and balances were dealt with before dissolution.

• Working file 100 · Distribution in a winding up: preferential payments and unclaimed dividends

ComplianceSME tracks the Companies Act 2014 and updates the toolkit on your account through the Compliance Complete account, so that you are never working from a superseded version. Compliance Complete

• A members' voluntary winding up and the final dissolution
• A creditors' voluntary winding up and the final meetings
• Realising the assets, the statement of affairs and antecedent transactions
• The liquidator: qualification, appointment, powers and remuneration
• Contributories, the committee of inspection and the court's powers
• Running the winding up: annual meetings, progress reports and offences
• Voluntary strike off and restoration to the register

The Irish library holds all 75 situations →