Involuntary struck off company

Nia7

Hello I was looking to get some advice re a company that was created but never actually traded.

The first annual return was submitted but not the second which lead to the company being struck off, there is no money in the company nor does the company owe anyone money.

What should the next steps be? There are no plans to ever operate under this company in the future.

Many thanks,

dbran

Hi

You can either do one of two things;

1) leave everything as it is and leave the company struck off, or
2) Apply for the company to be reinstated, pay all the late filing fees, pay for audited dormant accounts to be prepared and then apply to have the company properly struck off via voluntary strike off procedures.

Leaving everything as it is will cost you nothing. However you could potentially be prosecuted by the CRO for failing to file annual returns and ultimately disqualified as a director of a limited company. If this were to happen it would be a very expensive experience indeed with a day out in the high court to answer the charges a certainty, as well as all of the costs in 2) also.

Regards


dban

Peterdalkey

Dbran, you are well experienced in this area and while you are of course correct in the scenarios as outlined. For the directors of a never traded entity to be pursued in this manner would be highly unusual, especially given the record of the ODCE in failing to chase many real rogues, it is extremely unlikely.
My suggestion, not a legal opinion and of no standing whatsoever, would be to write to the ODCE explaining the situation, and most judges would give any proceedings the door!

Alan Shore

Peter,

While there is merit in your arguememt, the law applies to all directors equally. Look up the case of cautious trading ltd

http://www.cpdseminars.ie/articles/the-common-law-directors-duties-and-responsibilities/

Peterdalkey

I make no argument as to the law as stated. I do not espouse ignoring the situation and have suggested a course of proactive engagement, unlike the actions of cautious trading. But hey there are risks, some are big and some are small, you make a choice! Unless it is tried, the result will be forever unknown!

Gloomtastic!

Peterdalkey wrote: »

I make no argument as to the law as stated. I do not espouse ignoring the situation and have suggested a course of proactive engagement, unlike the actions of cautious trading. But hey there are risks, some are big and some are small, you make a choice! Unless it is tried, the result will be forever unknown!

No response to this Peter, they must all have fainted. The world will surely end!

dbran

Hi Peter

In a case like the opening poster, it would be certainly be unusual for the Companies Office/ODCE to prosecute the directors given the workload that they already have. There would usually have to be something else, perhaps a complaint of some kind, to make this company stand out.

I have heard from other accountants where directors have been prosecuted by CRO/ODCE. In those cases even though they had repaired the company's record in the CRO they were still taken to court and had to plead with the judge that there was no loss to anyone from their actions in order to avoid disqualification.

So on that basis it would be remiss to give the advice to do nothing on its own because if there was a prosecution it would be too late to do anything as you would be already due in court.

Also advising anyone to break the law usually never ends well.

Best Regards

dbran

Peterdalkey

dbran, could not agree more! This is why I suggested that they at least make an enquiry of the ODCE on the basis that the company never traded, so never had associated liabilities other than the annual returns violation. That the directors/shareholders are impecunious and that there are no funds of any sort avaiable to deal with the costs of restoring the company etc.
There are some 7000 involuntary strike offs alone each year and the average number of court proceedings by the OCDE total less than 250 per annum covering all areas of company law. Prosecution is highly unlikely but I would still feel more secure if I had at least shown some willinghness to engage and would be able to rely on this if it came before a judge. if the company had actually traded, I would be much less sanguine.

The downside risk is that having put your head above the parapet, you draw their ire!! But they nhave much bigger fish to fry and the PR implications for the reputation of the ODCE would be rather negative in such a case, in my opinion.

dbran

ODCE are unlikely to ever give advice to break company law.

Peterdalkey

dbran wrote: »

ODCE are unlikely to ever give advice to break company law.

I am sure you are right there. So it looks like the OP has to make the Hobsons choice between the legally correct thing to do versus the more pragmatic option with ithe risks attached!. Perhaps a call to them and keep notes might be a psosible middle grounds and provide a bit of a safety net in a doomsday scenario.

On the wider topic, it would seem that we do need a simpler. low cost and efficient way for citizens to regularise their affairs in this area. One for Senator Quinn perhaps?

Peterdalkey

Does the Satute of Limitations Act apply to the ADCE/CRO?