Who can act as Liquidator or Receiver?

 There are certain restrictions on who can act as Liquidator or Receiver. There are Company Law requirements and  Ethical guidelines.

Company Law Requirements

Irish Company law does not lay down any qualification requirement to be a Liquidator. However, section 300 of the Companies Act 1963 states that a body corporate it not qualified to be a Liquidator. Section 300A of the Companies Act 1963 lists persons who are specifically stated to be not qualified for appointment a Liquidator of a company, namely:

a)      A person who is, or who has within 12 months of the commencement of the winding up been, an officer or servant of the company;

b)      Except with the leave of the court, a parent, spouse, brother, sister or child of an officer of the company;

c)      A person who is a partner or in the employment of an officer or servant of the company;

d)      A person who is not qualified by virtue of this subsection for appointment as Liquidator of any other body corporate which is that company’s subsidiary or holding company or a subsidiary of that company’s holding company, or would be so disqualified if the body corporate were a company.

Section 315 of the 1963 Companies Acts contains similar provisions in relation to those qualified to act as Receivers.

It should be noted that an auditor is considered to be an officer of the Company for the purposes of the relevant statutory provisions.

Just because a client is audit exempt does not mean that the company’s accountant may act as Liquidator, as he may be deemed to be a servant of the company. 

Acting in breach of Sections 300A and 315 of the Companies Acts is a criminal offence.

Ethical Guidelines

The Institute of Chartered Accountants have strong ethical guidelines on Insolvency Practice, and other accountancy bodies have similar guidelines.

In summary, an Insolvency Practitioner is required to comply with the following fundamental principles:

a)      Integrity

An Insolvency Practitioner should be straightforward and honest in all professional and business relationships.

b)      Objectivity

An Insolvency Practitioner should not allow bias, conflict of interest or undue influence of others to override professional or business judgements.

c)      Professional Competence and Due Care

An Insolvency Practitioner has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques. An Insolvency Practitioner should act diligently and in accordance with applicable technical and professional standards when providing professional services.

d)      Confidentiality

An Insolvency Practitioner should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority unless there is a legal or professional and business relationships should not be used for the personal advantage of the Insolvency Practitioner or third parties.

e)      Professional Behaviour

An Insolvency Practitioner should comply with relevant laws and regulations and should avoid any action that discredits the profession.

Acting in breach of the Ethical Guidelines may result in disciplinary action.

For further information please contact Jim Stafford or Tom Murray on 01 661 4066 or stafford@liquidation .ie  or murray@liquidation.ie