A regular feature of the annual report of the Irish Companies Registration Office (CRO) is the number of Irish companies which have been struck off the Companies Registrar (approximately 5,000 each year), primarily due to a failure to comply with filing obligations and in particular for a failure to file annual returns.
Where a company is struck off it is treated as having been dissolved. The consequences of a strike off/dissolution for a company are potentially very serious, especially where the company continues to trade. The most obvious and hazardous consequence is that the company ceases to be a separate legal entity and loses the protection of limited liability from the date of strike off/dissolution. Where the company continues to trade beyond this date, there is no corporate veil to protect its officers and shareholders from incurring personal liability.
A further consequence of strike off/dissolution is that the assets of the company become vested in the State. Accordingly, the property owned by a company prior to strike off is no longer an asset of the company and cannot be sold by that company.
There is a straightforward and inexpensive mechanism to apply for the restoration of a company within 12 months from the date of its dissolution. Where a company has been dissolved for more than 12 months, the CRO restoration procedure will not be available. It is still possible to restore the company (within 20 years of its dissolution) but this can only be achieved by order of the court on application to the High Court, at significantly greater expense than restoration by the Registrar.
In short, if steps are not taken to restore a company within 12 months of it being struck off, any application for restoration must be made in the High Court. It should be noted that the timelines and processes for company restoration also apply to companies which have been voluntarily or deliberately struck off/dissolved.
Contributed by Craig Sowman.
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