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Liquidators

The Companies Act 2014 (‘the 2014 Act’) came into force on 1 June 2015. The 2014 Act provides, at Sections 633 and 634, for the qualifications governing those who wish to become authorised to act as company liquidators.

Section 633 of the 2014 Act provides for the qualifications necessary for those who wish to be qualified for appointment as a liquidator.

Do I have to be qualified to act as a liquidator?

  • Yes. Under the 2014 Act, there are certain qualifications necessary for a person to be qualified for appointment as a liquidator of a company. There are five categories of individuals who are qualified for appointment as company liquidators as set out in the 2014 Act as follows:-

    • Category 1: members of a prescribed accountancy body (“PAB”) holding a practising certificate;
    • Category 2:  solicitors holding a practising certificate;
    • Category 3:  members of other professional bodies recognised by IAASA (currently none);
    • Category 4:  persons qualified under the laws of another EEA State to act as a liquidator in insolvency proceedings; and
    • Category 5:  persons with practical experience of windings-up and knowledge of relevant law who have applied to IAASA for authorisation to act as a liquidator. [emphasis added]

What if the liquidation was commenced prior to the commencement of the Act?

  • The new requirements do not prevent a person from continuing to act as a liquidator in a winding up in relation to which he or she was appointed liquidator before 1 June 2015.

What are the qualifications for appointment as liquidator?

  • The 2014 Act requires the following qualifications for appointment:

     

    1. Category 1 – Member of a prescribed accountancy body (“PAB”)

    The person is a member of a PAB, being a person who-

    • holds a current practising certificate issued by that body; and
    • is not prohibited by virtue of rules of that body or a direction, ruling or decision of that  body, or any disciplinary or professional practice committee of it, from acting as a liquidator.

    3.1.1 What is a Prescribed Accountancy Body?

    A Prescribed Accountancy Body (“PAB”) is any accountancy body that comes within the supervisory remit of IAASA under the 2014 Act. There are currently nine PABs, each of which has its own formal system for dealing with complaints relating to its members/member firms, including, where necessary an investigation and disciplinary process. The nine PABs and the designatory letters for their members are:

     

    Accountancy Body

    Full Name

    Designatory Letters

    ACCA

    Association of Chartered Certified Accountants

    ACCA or FCCA

    AIA

    Association of International Accountants

    AAIA or FAIA

    CIMA

    Chartered Institute of Management Accountants

    ACMA or FCMA

    CIPFA

    Chartered Institute of Public Finance and Accountancy

    CPFA

    ICAEW

    Institute of Chartered Accountants in England & Wales

    ACA or FCA

    ICAI

    Institute of Chartered Accountants in Ireland

    ACA or FCA

    ICAS

    Institute of Chartered Accountants of Scotland

    CA

    ICPAI

    Institute of Certified Public Accountants in Ireland

    CPA or FCPA

    IIPA

    Institute of Incorporated Public Accountants

    AIPA or FIPA

    1. Category 2 – Practising Solicitor

    The person is a solicitor, being a solicitor who –

    • holds a current practising certificate issued by the Law Society of Ireland under the Solicitors Acts 1954 to 2002; and
    • is not prohibited by virtue of regulations made by the Law Society of Ireland, or a decision or order made by the Solicitors Disciplinary Tribunal or the High Court, under those Acts from acting as a liquidator.

     

    1. Category 3 – Members of other professional bodies recognised by IAASA

    The person is a member of such professional body as the IAASA may from time to time recognise, being a person who –

    • is authorised for the time being by that professional body to pursue the particular activities that body aims to promote or foster or as respects the pursuit of which by its members that body has been represent; and
    • is not prohibited by virtue of rules of that body or a direction, ruling or decision of that body, or any disciplinary or professional practice committee of it, from acting as a liquidator.

     

    At present, there are no such professional bodies recognised by IAASA.

     

    1. Category 4 – Person qualified under the laws of other EEA State

    The person is entitled under the laws of an EEA state, (other than Ireland), to act as a liquidator in insolvency proceedings and the qualifications held by, or the circumstances

    otherwise relating to the person, that entitle him or her so to act are ones that by virtue of any Community act, entitle him or her to act as a liquidator in Ireland.

     

    1. Category 5 – Persons with practical experience of windings up and knowledge or relevant law

                IAASA may authorise persons to be qualified to act as liquidators where the person has —

    1. made application in that behalf to IAASA in the prescribed form within 2 years following 1 June, 2015; and
    2. paid the prescribed fee to the Supervisory Authority.

    IAASA may grant such authorisation where the following grounds are satisfied—

    1. the person has, prior to 1 June, 2015, obtained adequate relevant experience of the winding up of companies and knowledge of the law applicable thereto by virtue of the person’s either—
      1. having been—
        1. employed in relevant work by a person who at the relevant time fell (or, if this section had been in operation at that time, who would have fallen) within category 1, 2 or 3 above; or
        2. engaged on his or her own account in relevant work; or
      2. having practised in an EEA state (other than Ireland) as a liquidator;
    2. the person is, in the opinion of IAASA, after consultation with the Director of Corporate Enforcement, a fit and proper person to act as a liquidator; and the person does not fall within category 1, 2, 3 or 4 above.

How do I become authorised by IAASA to act as a liquidator?

  • You must make an application to IAASA within 30 months after the commencement of section 634 of the 2014 Act (1 June 2015) and pay the prescribed fee (€2,500). The application will then be considered in accordance with the requirements of the 2014 Act. After this consideration, applicants will be contacted to inform them of the rejection or acceptance of their application.

     

Can I accept new appointments after 1 June 2015 if I have not made an application to IAASA?

  • No, you cannot accept any new appointments to act as a liquidator until you have made a valid application to IAASA.

     

What are the requirements regarding the need to have in place professional indemnity insurance?

  • In accordance with the Companies Act 2014 IAASA has made Regulations setting Professional Indemnity cover requirements for liquidators required by Section 634 of the 2014 Act. 

    The Statutory Instrument (S.I.127 of 2016), which comes into effect on 1 June 2016, can be accessed here:

    It is a matter for individuals currently acting as liquidators to seek their own legal advice to ensure that they are in compliance with all legal and professional requirements in relation to their acting as liquidator in any particular case.

     

     

     

How can members of the public verify I am authorised to act as a liquidator under category 5

  • If your application is approved, the Authority will make available on its website a list of persons who hold authorisations to act as liquidators issued by the Authority. The list will contain your first and second names, your registration number and the date of expiration of your current authorisation period.