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Dáil Éireann debate -
Tuesday, 29 Feb 2000

Vol. 515 No. 3

Written Answers. - Register of Companies.

Nora Owen

Question:

94 Mrs. Owen asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has examined the case being made by the Irish Institute of Credit Management; if she will make a statement on its contention that unscrupulous directors are availing of the strike-off provisions in the law by failing to file the necessary annual returns and if she will make a statement on the matter. [5954/00]

I have recently received correspondence from the Irish Institute of Credit Management outlining its views on alleged difficulties associated with the present strike-off regime. I will be issuing a full reply to the institute's concerns shortly.

The Companies Acts, 1963-1999 permit the strike-off of companies from the Register of Companies in circumstances where a company fails to file returns or where the registrar has reasonable cause to believe that a company is not carrying on business. The Companies (Amendment) (No. 2) Act, 1999 has recently provided that a company is eligible for strike-off after failing to file an annual return for one year. Previously, the period of eligibility was two years.

The Act has also made it easier for a creditor to restore a company to the register after strike-off by providing that such an application may be made to the Circuit Court rather than the High Court. It also now provides that the Circuit Court may appoint a liquidator to a company after it is struck off. Rather than denying creditors their entitlement, I would suggest that the recent legislative changes have in fact facilitated applications by creditors for the re-instatement or liquidation of a company.

In its representations to me, the Irish Institute of Credit Management has suggested that the strike-off process is being used as a vehicle for tax evasion. I understand that the registrar of companies has had a series of meetings with the Revenue Commissioners in relation to the new Act, and I am assured that Revenue plans to make full use of the powers available to it to counter any threat of tax evasion.

The institute also suggested that the current strike-off policy may be unconstitutional. As the 1999 Act was drafted by the Office of the Attorney General taking account of constitutional considerations, I am satisfied that it is compatible with the Constitution.
The current strike-off process is also consistent with the thrust of the Working Group on Company Law Compliance and Enforcement which advocated a stronger enforcement of company law.
I note that the institute will be making a full submission on a number of related issues to the new Company Law Review Group. However, in the light of the above considerations, I do not intend to accede to the institute's request to suspend the current strike-off process, pending completion of the review group's report.
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