Directors Responsibilities

When a company is insolvent and goes into liquidation, the conduct of its Directors will be investigated by the liquidator and by the Office of the Director of Corporate Enforcement to determine if they are to be held responsible for the failure. Legal cases have precedents to determine whether a director acted “honestly and responsibly”:

The following are some of the questions concerning a Directors’ conduct that will determine whether they are seen to have acted honestly and responsible.

• Is the debt to the Revenue large, how old is it, were correct returns made up to date of the liquidation on time?

• Were some creditors paid off before others?

• Have the employees been paid, if not have they been advised of their rights?

• Do the Directors owe any monies to the company?

• Did the directors put the company into liquidation as soon as they saw it was insolvent?

• Have the Directors started the business again under another name? Were the directors involved in a previous insolvency?

• Are there customers’ deposits included in the deficiency of assets?

• Were the returns made up to date to the Companies’ Office?

Services

Consider your behaviour as a director by reviewing the list above.

If you have concerns, contact me at dvm@dvmannion.ie