Companies Act , 1990

(6) Notice of an application to the court for the purposes of this section shall be served on every company specified in the application, and on such other persons as the court may direct, not later than the end of the eighth day before the day the application is heard.

142 Amendment of section 298 of the Principal Act.

142.—The Principal Act is hereby amended by the substitution for section 298 of the following section—

“298.—(1) Subsection (2) applies if in the course of winding up a company it appears that any person who has taken part in the formation or promotion of the company, or any past or present officer, liquidator, receiver or examiner of the company, has misapplied or retained or become liable or accountable for any money or property of the company, or has been guilty of any misfeasance or other breach of duty or trust in relation to the company.

(2) The court may, on the application of the liquidator, or any creditor or contributory, examine into the conduct of the promoter, officer, liquidator, receiver or examiner, and compel him—

(a) to repay or restore the money or property or any part thereof respectively with interest at such rate as the court thinks just, or

(b) to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or other breach of duty or trust as the court thinks just.

(3) This section has effect notwithstanding that the offence is one for which the offender may be criminally liable.”.

143 Amendment of section 299 of the Principal Act.

143.—Section 299 of the Principal Act is hereby amended by the substitution of the following subsection for subsection (1)—

“(1) If it appears to the court in the course of a winding-up by the court that any past or present officer, or any member, of the company has been guilty of an offence in relation to the company for which he is criminally liable, the court may either on the application of any person interested in the winding-up or of its own motion direct the liquidator to refer the matter to the Director of Public Prosecutions and in such a case the liquidator shall furnish to the Director of Public Prosecutions such information and give to him such access to and facilities for inspecting and taking any copies of any documents, being information or documents in the possession or under the control of the liquidator and relating to the matter in question, as the Director of Public Prosecutions may require.”.

144 Duty of liquidators and receivers to include certain information in returns etc.

144.—(1) Where a receiver or liquidator of a company is obliged by the Companies Acts to make a periodic account, abstract, statement or return in relation to his activities as receiver or liquidator he shall incorporate in such account, abstract, statement or return a report as to whether, at the date of such account, abstract, statement or return any past or present director or other officer, or any member, of the company is a person—

(a) in respect of whom a declaration has been made under any provision of the Companies Acts that he should be personally liable for all or any part of the debts of a company,

(b) who is, or is deemed to be, subject to a disqualification order under Part VII.

(2) A receiver or liquidator who contravenes subsection (1) shall be guilty of an offence and liable to a fine.

145 Penalty for default of receiver or liquidator in making certain accounts and returns.

145.—(1) Where a receiver or liquidator is in default in relation to the making or filing of a periodic account, abstract, statement or return in pursuance of any provision of the Companies Acts he shall be guilty of an offence and liable—

(a) on summary conviction to a fine not exceeding £1,000 and, for continued contravention, to a daily default fine not exceeding £50;

(b) on conviction on indictment to a fine not exceeding £10,000 and, for continued contravention, to a daily default fine not exceeding £250.

(2) A person convicted of an offence under any of the following provisions, namely section 262, 272, 306, 319 (2) or 321 of the Principal Act, shall, in lieu of the penalty provided in any such section (as increased by section 15 of the Companies (Amendment) Act, 1982), be liable to the penalties specified in subsection (1).

Supplementary Provisions

146 Disqualification for appointment as liquidator.

146.—The Principal Act is hereby amended by the insertion after section 300 of the following section—

“300A.—(1) None of the following persons shall be qualified for appointment as liquidator of a company—

(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.

References in this subsection to an officer or servant of the company include references to an auditor.

(2) An application for leave under subsection (1) (b) shall be supported by such evidence as the court may require.

(3) If a liquidator becomes disqualified by virtue of this section he shall thereupon vacate his office and give notice in writing within 14 days to—

(a) the court in a court winding up,

(b) the company in a members' voluntary winding up,

(c) the company and the creditors in a creditors' voluntary winding up,

that he has vacated it by reason of such disqualification.

(4) Any person who acts as a liquidator when disqualified by this section from so doing or who fails to comply with subsection (3), if that subsection applies to him, shall be guilty of an offence and shall be liable—

(a) on summary conviction, to a fine not exceeding £1,000 and, for continued contravention, a daily default fine not exceeding £50;

(b) on conviction on indictment, to a fine of £10,000 and, for continued contravention, a daily default fine not exceeding £250.

(5) This section shall not apply to a winding-up commenced before the commencement of section 146 of the Companies Act, 1990.”.

147 Disclosure of interest by creditors etc. at creditors' meetings.

147.—The Principal Act is hereby amended by the insertion after section 301 of the following section—

“301A.—(1) Where, at a meeting of creditors, a resolution is proposed for the appointment of a liquidator, any creditor who has a connection with the proposed liquidator shall, before the resolution is put, make such connection known to the chairman of the meeting who shall disclose that fact to the meeting, together with details thereof.

(2) Subsection (1) shall also apply to any person at the meeting, being a representative of a creditor and entitled to vote on the resolution on his behalf.

(3) Where the chairman of a meeting of creditors has any such connection as is mentioned in subsection (1), he shall disclose that fact to the meeting, together with details thereof.

(4) For the purposes of this section, a person has a connection with a proposed liquidator if he is—

(a) a parent, spouse, brother, sister or child of, or

(b) employed by, or a partner of,

the proposed liquidator.

(5) A person who fails to comply with this section shall be liable to a fine not exceeding £1,000.

(6) In exercising its jurisdiction under section 267 (2) or 272 (2) (which relate to the appointment or removal of a liquidator) the court may have regard to any failure to comply with this section.”.

148 Extension of power of court to assess damages against directors.

148.—(1) Subsection (2) applies if in the course of winding up a company which is a subsidiary of another company, it appears that any director of the subsidiary's holding company has misapplied or retained or become liable or accountable for any money or property of the subsidiary, or has been guilty of any misfeasance or other breach of duty or trust in relation to the subsidiary.

(2) The court may, on the application of the liquidator, any creditor or contributory of the subsidiary, examine into the conduct of the director concerned and compel him—

(a) to repay or restore the money or property or any part thereof respectively with interest at such rate as the court thinks just, or

(b) to contribute such sum to the assets of the subsidiary by way of compensation in respect of the misapplication, retainer, misfeasance or other breach of duty or trust as the court thinks just.

PART VII Disqualifications and Restrictions: Directors and other Officers

Chapter 1 Restriction on Directors of Insolvent Companies

149 Application of Chapter I.

149.—(1) This Chapter applies to any company if—

(a) at the date of the commencement of its winding-up it is proved to the court, or

(b) at any time during the course of its winding-up the liquidator of the company certifies, or it is otherwise proved, to the court,

that it is unable to pay its debts (within the meaning of section 214 of the Principal Act).

(2) This Chapter applies to any person who was a director of a company to which this section applies at the date of, or within 12 months prior to, the commencement of its winding-up.

(3) This Chapter shall not apply to a company which commences to be wound up before the commencement of this section.

(4) In this Chapter “company” includes a company to which section 351 of the Principal Act applies.

(5) This Chapter applies to shadow directors as it applies to directors.

150 Restriction.

150.—(1) The court shall, unless it is satisfied as to any of the matters specified in subsection (2), declare that a person to whom this Chapter applies shall not, for a period of five years, be appointed or act in any way, whether directly or indirectly, as a director or secretary or be concerned or take part in the promotion or formation of any company unless it meets the requirements set out in subsection (3); and, in subsequent provisions of this Part, the expression “a person to whom section 150 applies” shall be construed as a reference to a person in respect of whom such a declaration has been made.

(2) The matters referred to in subsection (1) are—

(a) that the person concerned has acted honestly and responsibly in relation to the conduct of the affairs of the company and that there is no other reason why it would be just and equitable that he should be subject to the restrictions imposed by this section, or

(b) subject to paragraph (a), that the person concerned was a director of the company solely by reason of his nomination as such by a financial institution in connection with the giving of credit facilities to the company by such institution, provided that the institution in question has not obtained from any director of the company a personal or individual guarantee of repayment to it of the loans or other forms of credit advanced to the company, or

(c) subject to paragraph (a), that the person concerned was a director of the company solely by reason of his nomination as such by a venture capital company in connection with the purchase of, or subscription for, shares by it in the first-mentioned company.

(3) The requirements specified in subsection (1) are that—

(a) the nominal value of the allotted share capital of the company shall—

(i) in the case of a public limited company, be at least £100,000,

(ii) in the case of any other company, be at least £20,000,

(b) each allotted share to an aggregate amount not less than the amount referred to in subparagraph (i) or (ii) of paragraph (a), as the case may be, shall be fully paid up, including the whole of any premium thereon, and

(c) each such allotted share and the whole of any premium thereon shall be paid for in cash.

(4) Where a court makes a declaration under subsection (1), a prescribed officer of the court shall cause the registrar of companies to be furnished with prescribed particulars of the declaration in such form and manner as may be prescribed.

(5) In this section—

“financial institution” means—

(a) a licensed bank, within the meaning of section 25, or

(b) a company the ordinary business of which includes the making of loans or the giving of guarantees in connection with loans, and

“venture capital company” means a company prescribed by the Minister the principal ordinary business of which is the making of share investments.

151 Duty of liquidator under this Chapter.

151.—(1) Where it appears to the liquidator of a company to which this Chapter applies that the interests of any other company or its creditors may be placed in jeopardy by the relevant matters referred to in subsection (2) the liquidator shall inform the court of his opinion forthwith and the court may, on receipt of such report, make whatever order it sees fit.

(2) The relevant matters are that a person to whom section 150 applies is appointed or is acting in any way, whether directly or indirectly, as a director or is concerned or is taking part in the promotion or formation of such other company as is referred to in subsection (1).

(3) Any liquidator who contravenes subsection (1) shall be guilty of an offence and shall be liable—

(a) on summary conviction, to a fine not exceeding £1,000 and,for continued contravention, to a daily default fine not exceeding £50, or

(b) on conviction on indictment, to a fine not exceeding £10,000 and, for continued contravention, to a daily default fine not exceeding £250.

152 Relief.

152.—(1) A person to whom section 150 applies may, within not more than one year after a declaration has been made in respect of him under that section, apply to the court for relief, either in whole or in part, from the restrictions referred to in that section or from any order made in relation to him under section 151 and the court may, if it deems it just and equitable to do so, grant such relief on whatever terms and conditions it sees fit.

(2) Where it is intended to make an application for relief under subsection (1) the applicant shall give not less than 14 days' notice of his intention to the liquidator (if any) of the company the insolvency of which caused him to be subject to this Chapter.

(3) On receipt of a notice under subsection (2), the liquidator shall forthwith notify such creditors and contributories of the company as have been notified to him or become known to him, that he has received such notice.

(4) On the hearing of an application under this section the liquidator or any creditor or contributory of the company, the insolvency of which caused the applicant to be subject to this Chapter may appear and give evidence.

(5) Any liquidator who contravenes subsection (3) shall be guilty of an offence and liable to a fine.

153 Register of restricted persons.

153.—(1) The registrar shall, subject to the provisions of this section, keep a register of the particulars which have been notified to him under section 150, and the following provisions of this section shall apply to the keeping of such a register.

(2) Where the court grants partial relief to a person under section 152 a prescribed officer of the court shall cause the registrar to be furnished with prescribed particulars of the relief, and the registrar shall, as soon as may be, enter the particulars on the register referred to in subsection (1).

(3) Where the court grants full relief to a person under section 152 a prescribed officer of the court shall cause the registrar to be so notified, and the registrar shall, as soon as may be, remove the particulars of any such person from the register referred to in subsection (1).

(4) The registrar shall also remove from the register any particulars in relation to a person on the expiry of five years from the date of the declaration to which the original notification under section 150 relates.

(5) Nothing in this section shall prevent the registrar from keeping the register required by this section as part of any other system of classification, whether pursuant to section 247 or otherwise.

154 Application of this Chapter to receivers.

154.—Where a receiver of the property of a company is appointed, the provisions of this Chapter shall, with the necessary modifications, apply as if the references therein to the liquidator and to winding up were construed as references to the receiver and to receivership.

155 Restrictions on company to which section 150 (3) applies.

155.—(1) This section applies to any company in relation to which a person who is the subject of a declaration under section 150 is appointed or acts in any way, whether directly or indirectly, as a director or secretary or is concerned in or takes part in the promotion or formation of that company.

(2) Subsections (2) to (11) of section 60 of the Principal Act shall not apply to any company to which this section applies.

(3) Sections 32 to 36 of the Companies (Amendment) Act, 1983, shall, with the necessary modifications, apply to any company to which this section applies as if the company were a public limited company so, however, that for the purposes of this subsection those sections shall apply as if—

(a) in subsection (1) of section 32 the words “during the initial period” were deleted;

(b) any other reference in any of those sections to “initial period” were deleted; and

(c) in subsection (2) of section 32 the words “relevant person” were defined to mean “any subscriber to the memorandum, any director or any person involved in the promotion or formation of the company”.

(4) Without prejudice to section 39, sections 32 and 37 shall not apply to any company to which subsection (1) applies.

(5) From the date of a declaration under section 150 a person in respect of whom the declaration was made shall not accept appointment to a position or act in any manner mentioned in subsection (1) of this section in relation to a company unless he has, within the 14 days immediately preceeding such appointment or so acting, sent to the registered office of the company a notification that he is a person to whom section 150 applies.

156 Requirements as to shares allotted by a company to which section 155 applies.

156.—(1) Where a company to which section 155 applies allots a share which is not fully paid up as required by section 150 (3) (b) the share shall be treated as if its nominal value together with the whole of any premium had been received, but the allottee shall be liable to pay the company in cash the full amount which should have been received in respect of the share under that subsection less the value of any consideration actually applied in payment up (to any extent) of the share and any premium on it, and interest at the appropriate rate on the amount payable under this subsection.

(2) Where a company to which section 155 applies allots a share which is not fully paid for in cash as required by section 150 (3) (c) the allottee of the share shall be liable to pay the company in cash an amount equal to its nominal value, together with the whole of any premium, and shall be liable to pay interest at the appropriate rate on the amount payable under this subsection.

(3) Subsection (1) shall not apply in relation to the allotment of abonus share which is not fully paid up as required by section 150 (3) (b) unless the allottee knew or ought to have known that the share was so allotted.

(4) Subsection (1) does not apply to shares allotted in pursuance of an employees' share scheme within the meaning of section 2 of the Companies (Amendment) Act, 1983.

(5) In this section, “appropriate rate” has the meaning assigned to it by section 2 of the Companies (Amendment) Act, 1983.

(6) Section 26 (4) of the Companies (Amendment) Act, 1983, shall apply for the purposes of this section as it applies for the purposes of that section.

157 Relief for a company in respect of prohibited transactions.

157.—(1) The court may, if it deems it just and equitable to do so, grant relief to a company to which section 155 applies in respect of any act or omission which, by virtue of that section, contravened a provision of the Companies Acts or to any person adversely affected thereby, on whatever terms and conditions the court sees fit, including exemption from any such provision.

(2) Relief shall not be granted to the company where the person referred to in section 155 (1) complied with subsection (5) of that section.

158 Power to vary amounts mentioned in section 150 (3).

158.—The Minister may, by order, vary the amounts mentioned in section 150 (3) (a) and the order may—

(a) require any company to which that section applies having an allotted share capital of which the nominal value is less than the amount specified in the order to increase the value to not less than that amount;

(b) make, in connection with any such requirement provision for any of the matters for which provision is made in the Companies Acts in relation to a company's registration, re-registration, change of name, winding-up or dissolution, payment for any share comprised in a company's capital and offers of shares in or debentures of a company to the public, including provision as to the consequences (whether in criminal law or otherwise) of a failure to comply with any requirement of the order, and

(c) contain such supplemental and transitional provisions as the Minister thinks appropriate, specify different amounts in relation to companies of different classes or descriptions and, in particular, provide for any provision of the order to come into operation on different days for different purposes.

Chapter 2 Disqualification Generally

159 Interpretation of Chapters 2 and 3.

159.—In this Chapter and Chapter 3, except where the context otherwise requires—

“company” includes every company and every body, whether corporate or unincorporated, which may be wound up under Part X of the Principal Act and, without prejudice to the generality of the foregoing, includes a friendly society within the meaning of the Friendly Societies Acts, 1896 to 1977;

“the court” means the High Court except in relation to a disqualification order made by a court of its own motion under section 160 (2), paragraph (a), (b), (c), (d) or (f), in which case it includes any court;

“default order” means an order made against any person under section 371 of the Principal Act by virtue of any contravention of or failure to comply with any relevant requirement (whether on his own part or on the part of any company);

“disqualification order” means—

(a) an order under this Part that the person against whom the order is made shall not be appointed or act as an auditor, director or other officer, receiver, liquidator or examiner or be in any way, whether directly or indirectly, concerned or take part in the promotion, formation or management of any company, or any society registered under the Industrial and Provident Societies Acts, 1893 to 1978, or

(b) an order under section 184 of the Principal Act;

“officer” in relation to any company, includes any director, shadow director or secretary of the company;

“relevant requirement” means any provision of the Companies Acts (including a provision repealed by this Act) which requires or required any return, account or other document to be filed with, delivered or sent to, or notice of any matter to be given to, the registrar of companies.

160 Disqualification of certain persons from acting as directors or auditors of or managing companies.

160.—(1) Where a person is convicted on indictment of any indictable offence in relation to a company, or involving fraud or dishonesty, then during the period of five years from the date of conviction or such other period as the court, on the application of the prosecutor and having regard to all the circumstances of the case, may order—

(a) he shall not be appointed or act as an auditor, director or other officer, receiver, liquidator or examiner or be in any way, whether directly or indirectly, concerned or take part in the promotion, formation or management of any company or any society registered under the Industrial and Provident Societies Acts, 1893 to 1978;

(b) he shall be deemed, for the purposes of this Act, to be subject to a disqualification order for that period.

(2) Where the court is satisfied in any proceedings or as a result of an application under this section that—

(a) a person has been guilty, while a promoter, officer, auditor, receiver, liquidator or examiner of a company, of any fraud in relation to the company, its members or creditors; or

(b) a person has been guilty, while a promoter, officer, auditor, receiver, liquidator or examiner of a company, of any breach of his duty as such promoter, officer, auditor, receiver, liquidator or examiner; or

(c) a declaration has been granted under section 297A of the Principal Act (inserted by section 138 of this Act) in respect of a person; or

(d) the conduct of any person as promoter, officer, auditor, receiver, liquidator or examiner of a company, makes him unfit to be concerned in the management of a company; or

(e) in consequence of a report of inspectors appointed by the court or the Minister under the Companies Acts, the conduct of any person makes him unfit to be concerned in the management of a company; or

(f) a person has been persistently in default in relation to the relevant requirements;

the court may, of its own motion, or as a result of the application, make a disqualification order against such a person for such period as it sees fit.

(3) (a) For the purposes of subsection (2) (f) the fact that a person has been persistently in default in relation to the relevant requirements may (without prejudice to its proof in any other manner) be conclusively proved by showing that in the five years ending with the date of the application he has been adjudged guilty (whether or not on the same occasion) of three or more defaults in relation to those requirements.

(b) A person shall be treated as being adjudged guilty of a default in relation to a relevant requirement for the purposes of this subsection if he is convicted of any offence consisting of a contravention of a relevant requirement or a default order is made against him.

(4) An application under paragraph (a), (b), (c) or (d) of subsection (2) may be made by—

(a) the Director of Public Prosecutions; or

(b) any member, contributory, officer, employee, receiver, liquidator, examiner or creditor of any company in relation to which the person who is the subject of the application—

(i) has been or is acting or is proposing to or being proposed to act as officer, auditor, receiver, liquidator or examiner, or

(ii) has been or is concerned or taking part, or is proposing to be concerned or take part, in the promotion, formation or management of any company,

and where the application is made by a member, contributory, employee or creditor of the company, the court may require security for all or some of the costs of the application.

(5) An application under paragraph (e) of subsection (2) may be made by the Director of Public Prosecutions.

(6) An application under paragraph (f) of subsection (2) may be made by—

(a) the Director of Public Prosecutions; or

(b) the registrar of companies.

(7) Where it is intended to make an application under subsection (2) in respect of any person, the applicant shall give not less than ten days' notice of his intention to that person.

(8) Any person who is subject or deemed subject to a disqualification order by virtue of this Part may apply to the court for relief, either in whole or in part, from that disqualification and the court may, if it deems it just and equitable to do so, grant such relief on whatever terms and conditions it sees fit.

(9) A disqualification order may be made on grounds which are or include matters other than criminal convictions notwithstanding that the person in respect of whom the order is to be made may be criminally liable in respect of those matters.

(10) A reference in any other enactment to section 184 of the Principal Act shall be construed as including a reference to this section.

Chapter 3 Enforcement

161 Penalty for acting contrary to the provisions of Chapter 1 or 2.

161.—(1) Any person who, in relation to any company, acts in a manner or capacity which, by virtue of being a person to whom section 150 applies or being subject or deemed to be subject to a disqualification order, he is prohibited from doing shall be guilty of an offence.

(2) Where a person is convicted of an offence under subsection (1) he shall be deemed to be subject to a disqualification order from the date of such conviction if he was not, or was not deemed to be, subject to such an order on that date.

(3) Where a person convicted of an offence under subsection (1) was subject, or deemed to be subject, to a disqualification order immediately prior to the date of such conviction, the period for which he was disqualified shall be extended for a further period of ten years from such date, or such other further period as the court, on the application of the prosecutor and having regard to all the circumstances of the case, may order.

(4) Section 160 (8) shall not apply to a person convicted of an offence under subsection (1) of this section.

(5) Where—

(a) a person who is a person to whom section 150 applies is or becomes a director of a company which commences to be wound up within the period of 5 years after the date of commencement of the winding-up of the company whose insolvency caused that section to apply to him; and

(b) it appears to the liquidator of the first-mentioned company that that company is, at the date of commencement of its winding-up or at any time during the course of its winding-up, unable to pay its debts;

the liquidator shall report those matters to the court and the court, on receiving the report and if it considers it proper to do so, may make a disqualification order against that person for such period as it thinks fit.

(6) If the liquidator fails to comply with subsection (5) he shall be liable to a fine not exceeding £1,000.

162 Period of disqualification order to which person is deemed to be subject.

162.—Where a person is, as a consequence of his conviction of an offence under this Chapter, deemed to be subject to a disqualification order, he shall be deemed to be so subject for a period of five years from the date of such conviction or such other period as the court, on the application of the prosecutor and having regard to all the circumstances of the case, may order.

163 Civil consequences of acting contrary to the provisions of Chapter 1 or 2.

163.—(1) Subsections (2) and (3) apply to any person who acts, in relation to a company, in a manner or capacity which, by virtue of being a person to whom section 150 applies or being subject or deemed to be subject to a disqualification order, he is prohibited from doing.

(2) Where any consideration is given by or on behalf of a company for an act done or service performed by a person referred to in subsection (1) while he was acting in a manner or capacity described in that subsection, the company shall be entitled to recover from him, as a simple contract debt in any court of competent jurisdiction, the consideration or an amount representing its value.

(3) Where—

(a) a person referred to in subsection (1) acts, in relation to a company, in a manner or capacity described in that subsection, and

(b) the company concerned commences to be wound up—

(i) while he is acting in such a manner or capacity, or

(ii) within 12 months of his so acting, and

(c) the company is unable to pay its debts, within the meaning of section 214 of the Principal Act,

the court may, on the application of the liquidator or any creditor of the company, declare that such person shall be personally liable, without any limitation of liability, for all or any part of the debts or other liabilities of the company incurred in the period during which he was acting in such a manner or capacity.

(4) Where a company which has received a notification under section 155 (5) and which carries on business following such notification without the requirements of section 150 (3) being fulfilled within a reasonable period—

(a) is subsequently wound up, and

(b) is at the time of the commencement of the winding-up unable to pay its debts (taking into account the contingent and prospective liabilities),

the court may, on the application of the liquidator or any creditor or contributory of the company, declare that any person who was an officer of the company while the company so carried on business and who knew or ought to have known that the company had been so notified shall be personally responsible, without any limitation of liability, for all or any part of the debts or other liabilities of the company as the court may direct.

(5) In any proceedings brought against a person by virtue of this section the court may if, having regard to the circumstances of the case, it considers it just and equitable to do so, grant relief in whole or in part from the liability to which he would otherwise be subject thereunder and the court may attach to its order such conditions as it sees fit.

164 Penalty for acting under directions of disqualified person.

164.—(1) If any person while a director or other officer or a member of a committee of management or trustee of any company acts in accordance with the directions or instructions of another person knowing that such other person is disqualified or that, in giving the directions or instructions, he is acting in contravention of any provision of this Part he shall be guilty of an offence.

(2) Where a person is convicted of an offence under subsection (1) he shall be deemed to be subject to a disqualification order from the date of such conviction if he was not, or was not deemed to be, subject to such an order on that date.

165 Civil consequences of acting under directions of disqualified person.

165.—(1) A person who is convicted of an offence under section 164 for acting in accordance with the directions or instructions of a disqualified person shall, subject to subsection (2), be personally liable for the debts of the company concerned incurred in the period during which he was so acting.

(2) In any proceedings brought against a person for the recovery of any such debt the court may if, having regard to the circumstances of the case, it considers it just and equitable to do so, grant relief in whole or in part from the liability to which he would otherwise be subject under subsection (1) and the court may attach to its order such conditions as it sees fit.

166 Information to be given by directors to the court.

166.—(1) Where—

(a) a director of a company is charged with an offence or civil proceedings are instituted against such a director, and

(b) the charge or proceedings relate to the company or involve alleged fraud or dishonesty,

the director shall, by notice in writing to the court lodged before the hearing of the case—

(i) give the names of all companies of which he is a director at the date of the notice,

(ii) give the names of all companies of which he was a director within a period commencing not earlier than 12 months prior to the commencement of proceedings and ending at the date of the notice,

(iii) state whether he is at the date of the notice or ever was subject or deemed to be subject to a disqualification order, and

(iv) give the dates and duration of each period in respect of which he is or was disqualified.

(2) This section applies to shadow directors as it applies to directors.

(3) Any person who contravenes subsection (1) shall be guilty of an offence.

167 Information to be supplied to registrar of companies.

167.—Where a court—

(a) makes a disqualification order;

(b) grants or varies relief under section 160 (8); or

(c) convicts a person of an offence—

(i) which has the effect of his being deemed to be subject to a disqualification order, or

(ii) under section 161 (1) or 164,

a prescribed officer of the court shall cause the registrar of companies to be furnished with prescribed particulars of the order, relief or conviction at such time and in such form and manner as may be prescribed.

168 Register of persons subject to disqualification orders.

168.—(1) The registrar shall, subject to the provisions of this section, keep a register of the particulars which have been notified to him under section 167, and the following provisions of this section shall apply to the keeping of such a register.

(2) Where the particulars referred to in section 167 (b) comprise the grant of full relief under section 160 (8), the registrar shall not enter such particulars on the register referred to in subsection (1), but shall, as soon as may be, remove any existing particulars in respect of the person concerned from the register.

(3) The registrar shall also remove from the register any particulars in relation to a person on the expiry of five years from the date of the original notification under section 167, or such other period in respect of which the person concerned is deemed to be subject to a disqualification order, unless the registrar has received a further notification in respect of that person under this section.

(4) Nothing in this section shall prevent the registrar from keeping the register required by this section as part of any other system of classification, whether pursuant to section 247 or otherwise.

169 Prohibition of undischarged bankrupts acting as directors or other officers of companies.

169.—The Principal Act is hereby amended by the substitution for section 183 of the following section—

“183.—(1) Subject to subsection (2), if any person being an undischarged bankrupt acts as officer, auditor, liquidator or examiner of, or directly or indirectly takes part or is concerned in the promotion, formation or management of, any company except with the leave of the court, he shall be guilty of an offence.

(2) Where a person is convicted of an offence under subsection (1) he shall be deemed to be subject to a disqualification order from the date of such conviction if he was not, or was not deemed to be, subject to such an order on that date.

(3) In this section ‘company’ includes a company incorporated outside the State which has an established place of business within the State.”.

PART VIII Receivers

170 Disqualification for appointment as receiver.

170.—The Principal Act is hereby amended by the substitution for section 315 of the following section—

“315.—(1) None of the following persons shall be qualified for appointment as receiver of the property of a company—

(a) an undischarged bankrupt;

(b) a person who is, or who has within 12 months of the commencement of the receivership been, an officer or servant of the company;

(c) a parent, spouse, brother, sister or child of an officer of the company;

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

(e) a person who is not qualified by virtue of this subsection for appointment as receiver of the property 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.

References in this subsection to an officer or servant of the company include references to an auditor.

(2) If a receiver of the property of a company becomes disqualified by virtue of this section, he shall thereupon vacate his office and give notice in writing within 14 days to—

(a) the company;

(b) the registrar of companies;

(c) (i) the debenture-holder, if the receiver was appointed by a debenture-holder, or

(ii) the court, if the receiver was appointed by the court, that he has vacated it by reason of such disqualification.

(3) Subsection (2) is without prejudice to sections 107, 319 (2) and 321.

(4) Nothing in this section shall require a receiver appointed before the commencement of section 170 of the Companies Act, 1990, to vacate the office to which he was so appointed.

(5) Any person who acts as a receiver when disqualified by this section from so doing or who fails to comply with subsection (2), if that subsection applies to him, shall be guilty of an offence and shall be liable—

(a) on summary conviction, to a fine not exceeding £1,000 and, for continued contravention, to a daily default fine not exceeding £50;

(b) on conviction on indictment, to a fine not exceeding £5,000 and, for continued contravention, to a daily default fine not exceeding £250.”.

171 Amendment of section 316 of the Principal Act.

171.—Section 316 of the Principal Act is hereby amended by the substitution for subsection (1) of the following subsections—

“(1) Where a receiver of the property of a company is appointed under the powers contained in any instrument, any of the following persons may apply to the court for directions in relation to any matter in connection with the performance or otherwise by the receiver of his functions, that is to say—

(a) (i) the receiver;

(ii) an officer of the company;

(iii) a member of the company;

(iv) employees of the company comprising at least half in number of the persons employed in a full-time capacity by the company;

(v) a creditor of the company; and

(b) (i) a liquidator;

(ii) a contributory;

and on any such application, the court may give such directions, or make such order declaring the rights of persons before the court or otherwise, as the court thinks just.

(1A) An application to the court under subsection (1), except an application under paragraph (a) (i) of that subsection, shall be supported by such evidence that the applicant is being unfairly prejudiced by any actual or proposed action or omission of the receiver as the court may require.

(1B) For the purposes of subsection (1), ‘creditor’ means one or more creditors to whom the company is indebted by more, in aggregate, than £10,000.”.

172 Duty of receiver selling property to get best price reasonably obtainable.

172.—The Principal Act is hereby amended by the insertion after section 316 of the following section—

“316A.—(1) A receiver, in selling property of a company, shall exercise all reasonable care to obtain the best price reasonably obtainable for the property as at the time of sale.

(2) Notwithstanding the provisions of any instrument—

(a) it shall not be a defence to any action or proceeding brought against a receiver in respect of a breach of his duty under subsection (1) that the receiver was acting as the agent of the company or under a power of attorney given by the company; and

(b) notwithstanding anything in section 316 (2), a receiver shall not be entitled to be compensated or indemnified by the company for any liability he may incur as a result of a breach of his duty under this section.

(3) (a) A receiver shall not sell by private contract a non-cash asset of the requisite value to a person who is, or who, within three years prior to the date of appointment of the receiver, has been, an officer of the company unless he has given at least 14 days' notice of his intention to do so to all creditors of the company who are known to him or who have been intimated to him.

(b) In this subsection—

(i) ‘non-cash asset’ and ‘requisite value’ have the meanings assigned to them by section 29 of the Companies Act, 1990, and

(ii) ‘officer’ includes a person connected, within the meaning of section 26 of the Companies Act, 1990, with a director, and a shadow director.”.

173 Amendment of section 320 of the Principal Act.

173.—Section 320 of the Principal Act is hereby amended by the substitution for subsection (5) of the following subsection—

“(5) If any person to whom subsection (2) applies makes default in complying with the requirements of this section, he shall, unless he can prove to the satisfaction of the court that it was not possible for him to comply with the requirements of the section, be liable—

(a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding £1,000 or to both; or

(b) on conviction on indictment, to imprisonment for a term not exceeding three years or to a fine not exceeding £5,000 or to both.”.

174 Consequences of contravention of section 319 or 320 of the Principal Act.

174.—The Principal Act is hereby amended by the insertion after section 320 of the following section—

“320A.—Where, in contravention of section 319 (1) (b) and section 320, a statement of affairs is not submitted to the receiver as required by those provisions, the court may, on the application of the receiver or any creditor of the company, and notwithstanding the provisions of section 320 (5) (inserted by section 173 of the Companies Act, 1990), make whatever order it thinks fit, including an order compelling compliance with section 319 and section 320.”.

175 Removal of receiver.

175.—The Principal Act is hereby amended by the insertion after section 322 of the following section—

“322A.—(1) The court may, on cause shown, remove a receiver and appoint another receiver.

(2) Notice of such proceedings shall be served on the receiver and on the person who appointed him not less than 7 days before the hearing of such proceedings and, in any such proceedings, the receiver and the person who appointed him may appear and be heard.”.

176 Court may determine or limit receivership on application of liquidator.

176.—The Principal Act is hereby amended by the insertion after section 322 of the following section—

“322B.—(1) On the application of the liquidator of a company that is being wound up (other than by means of a members' voluntary winding up) and in respect of which a receiver has been appointed (whether before or after the commencement of the winding up), the court may—

(a) order that the receiver shall cease to act as such from a date specified by the court, and prohibit the appointment of any other receiver; or

(b) order that the receiver shall, from a date specified by the court, act as such only in respect of certain assets specified by the court.

An order under this subsection may be made on such terms and conditions as the court thinks fit.

(2) The court may from time to time, on an application made either by the liquidator or by the receiver, rescind or amend an order made under subsection (1).

(3) A copy of an application made under this section shall be served on the receiver and on the person who appointed him not less than 7 days before the hearing of the application, and the receiver and any such party may appear before and be heard by the court in respect of the application.

(4) Except as provided in subsection (1), no order made under this section shall affect any security or charge over the undertaking or property of the company.”.

177 Resignation of receiver.

177.—The Principal Act is hereby amended by the insertion after section 322 of the following section—

“322C.—(1) A receiver of the property of a company appointed under the powers contained in any instrument may resign, provided he has given one month's notice thereof to—

(a) the holders of floating charges over all or any part of the property of the company;

(b) the company or its liquidator; and

(c) the holders of any fixed charge over all or any part of the property of the company.

(2) A receiver appointed by the court may resign only with the authority of the court and on such terms and conditions, if any, as may be laid down by the court.

(3) If any person makes default in complying with the requirements of this section, he shall be liable to a fine not exceeding £1,000.”.

178 Application of section 139 to receivers.

178.—The provisions of section 139 shall, with the necessary modifications, apply to a company in receivership as if the references therein to the liquidator and to winding up were construed as references to the receiver and to receivership.

179 Application of section 299 (2), (4) and (5) of the Principal Act to receivers.

179.—Section 299 (2), (4) and (5) of the Principal Act shall apply, with the necessary modifications, to receivers as it applies to liquidators.

PART IX Companies under Court Protection

180 Amendments to the Companies (Amendment) Act, 1990.

180.—(1) The Companies (Amendment) Act, 1990, is hereby amended as follows:

(a) by the substitution in section 3 (6) for “14 days” of “3 days”,

(b) by the insertion after section 5 (2) (f) of the following paragraph:

“(g) no order for relief shall be made under section 205 of the Principal Act against the company in respect of complaints as to the conduct of the affairs of the company or the exercise of the powers of the directors prior to the presentation of the petition.”,

(c) by the deletion in section 8 (3), of “, or past director,”,

(d) by the insertion in section 8 (3), after “Act”, where it secondly occurs, of “and ‘director’ includes any present or past director or any person connected, within the meaning of section 26 of the Companies Act, 1990, with such director, and any present or past shadow director”,

(e) by the insertion in section 8 of the following subsections:

“(5A) Without prejudice to its power under subsection (5), the court may, after a hearing under that subsection, make any order or direction it thinks fit, including a direction to the person concerned to attend or re-attend before the examiner or produce particular books or documents or answer particular questions put to him by the examiner, or a direction that the person concerned need not produce a particular book or document or answer a particular question put to him by the examiner.

(5B) Section 23 (1) of the Companies Act, 1990 shall apply for the purposes of this section.”,

(f) by the substitution in section 10 (1) of “Any” for “Where an order is made under this Act for the winding-up of the company or a receiver is appointed, any”,

(g) by the substitution, for section 16 (i), of the following:

“(i) his opinion as to whether the facts disclosed would warrant further inquiries with a view to proceedings under section 297 or 297A of the Principal Act (inserted by the Companies Act, 1990), or both,”,

(h) by the insertion in section 23 (5) (b), after “Government” of “, a local authority”,

(i) by the insertion in section 24 of the following subsection:

“(12) Notwithstanding subsection (4), or any other provision of this Act, where the examiner forms the opinion that the company will be able to survive as a going concern, nothing in this Act shall prevent the examiner from including, in a report under section 15 or 18, proposals which will not involve the impairment of the interests of members or creditors of the company, nor the court from confirming any such proposals.”.

(2) Section 244A of the Principal Act (inserted by section 125 of the Companies Act, 1990) and section 139 of the Companies Act, 1990, shall apply to a company under the protection of the court as they apply to a company being wound up, and any references in those sections to a liquidator or provisional liquidator shall be construed for the purposes of this subsection as a reference to an examiner.

(3) Sections 32, 33, 34 and 35 of the Companies (Amendment) Act, 1990, are hereby repealed.

181 Further amendments to the Companies (Amendment) Act, 1990.

181.—(1) The Companies (Amendment) Act, 1990, is hereby further amended as follows:

(a) by the substitution for section 2 (1) (b) of the following:

“(b) no resolution subsists for the winding up of the company, and”,

(b) by the substitution in section 4 (5) (f), for “company”, of “body corporate”,

(c) by the insertion after section 5 (2) (f) of the following paragraph:

“(h) no set-off between separate bank accounts of the company shall be effected, except with the consent of the examiner, and in this paragraph ‘bank account’ includes an account with any person exempt by virtue of section 7 (4) of the Central Bank Act, 1971, from the requirement of holding a licence under section 9 of that Act,”,

(d) by the insertion in section 11 (5), after “towards” of “discharging”, and

(e) by the insertion of the following section after section 36:

“Proceedings by registrar.

36A.—Proceedings in relation to an offence under section 11 (6), 12 or 30 may be brought and prosecuted by the registrar of companies.”.

(2) Section 30 (3) of the Companies (Amendment) Act, 1990, is hereby repealed.

PART X Accounts and Audit

182 Interpretation of Part X.

182.—In this Part—

“the Council Directive” means Council Directive No. 84/253/EEC of 10 April, 1984[^*] on the approval of persons responsible for carrying out the statutory audits of accounting documents;

“friendly society” means a society registered under the Friendly Societies Acts, 1896 to 1977;

“practising certificate” means a certificate awarded to a person by a body of accountants entitling that person to practise as auditor of a company or as a public auditor;

“public auditor” means a public auditor for the purposes of the Industrial and Provident Societies Acts, 1893 to 1978, and the Friendly Societies Acts, 1896 to 1977.

183 Appointment and removal of auditors.

183.—Section 160 of the Principal Act is hereby amended—

(a) by the substitution of the following subsections for subsection (5)—

“(5) Without prejudice to any rights of the auditor in relation to his removal under this subsection, a company may, by ordinary resolution at a general meeting, remove an auditor other than an auditor who is the first auditor or one of the first auditors of the company and appoint in his place any other person who has been nominated for appointment by any member of the company, who is qualified under the Companies Acts to be an auditor of a company and of whose nomination notice has been given to its members.

(5A) (a) A company shall—

(i) within one week of the Minister's power under subsection (4) becoming exercisable, give the Minister notice of that fact, and

(ii) where a resolution removing an auditor is passed, give notice of that fact in the prescribed form to the registrar of companies within 14 days of the meeting at which the resolution removing the auditor was passed.

(b) If a company fails to give notice as required by paragraph (a) of this subsection, the company and every officer of the company who is in default shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £1,000.”,

and

(b) by the substitution of the following subsection for subsection (7)—

“(7) The directors of a company or the company in general meeting may fill any casual vacancy in the office of auditor, but while any such vacancy continues, the surviving or continuing auditor or auditors, if any, may act.”.

184 Resolutions relating to appointment and removal of auditors and rights of auditors who have been removed.

184.—(1) Section 161 of the Principal Act is hereby amended by the substitution of the following subsections for subsections (1) and (2)—

“(1) Extended notice within the meaning of section 142 shall be required for—

(a) a resolution at an annual general meeting of a company appointing as auditor a person other than a retiring auditor or providing expressly that a retiring auditor shall not be re-appointed,

(b) a resolution at a general meeting of a company removing an auditor before the expiration of his term of office, and

(c) a resolution at a general meeting of a company filling a casual vacancy in the office of auditor.

(2) On receipt of notice of such an intended resolution as is mentioned in subsection (1), the company shall forthwith—

(a) if the resolution is a resolution mentioned in paragraph (a) of the said subsection (1), send a copy thereof to the retiring auditor (if any),

(b) if the resolution is a resolution mentioned in paragraph (b) of the said subsection (1), send a copy thereof to the auditor proposed to be removed, and

(c) if the resolution is a resolution mentioned in paragraph (c) of the said subsection (1), send a copy thereof to the person (if any) whose ceasing to hold the office of auditor of the company occasioned the casual vacancy.

(2A) An auditor of a company who has been removed shall be entitled to attend—

(a) the annual general meeting of the company at which, but for his removal, his term of office as auditor of the company would have expired, and

(b) the general meeting of the company at which it is proposed to fill the vacancy occasioned by his removal, and

to receive all notices of, and other communications relating to, any such meeting which a member of the company is entitled to receive and to be heard at any general meeting that such a member attends on any part of the business of the meeting which concerns him as former auditor of the company.”.

(2) The reference in subsection (5) of the said section 161 to a resolution to remove the first auditors by virtue of subsection (6) of section 160 of the Principal Act shall be construed as including a reference to a resolution to remove an auditor other than the first auditors before the expiration of his term of office.

185 Resignation of auditors.

185.—(1) An auditor of a company may, by a notice in writing that complies with subsection (2) served on the company and stating his intention to do so, resign from the office of auditor to the company; and the resignation shall take effect on the date on which the notice is so served or on such later date as may be specified in the notice.

(2) A notice under subsection (1) shall contain either—

(a) a statement to the effect that there are no circumstances connected with the resignation to which it relates that the auditor concerned considers should be brought to the notice of the members or creditors of the company, or

(b) a statement of any such circumstances as aforesaid.

(3) Where a notice under subsection (1) is served on a company—

(a) the auditor concerned shall, within 14 days after the date of such service, send a copy of the notice to the registrar of companies, and

(b) subject to subsection (4), the company shall, if the notice contains a statement referred to in subsection (2) (b), not later than 14 days after the date of such service send a copy of the notice to every person who is entitled under section 159 (1) of the Principal Act to be sent copies of the documents referred to in the said section 159 (1).

(4) Copies of a notice served on a company under subsection (1) need not be sent to the persons specified in subsection (3) (b) if, on the application of the company concerned or any other person who claims to be aggrieved, the court is satisfied that the notice contains material which has been included to secure needless publicity for defamatory matter and the court may order the company's costs on an application under this section to be paid in whole or in part by the auditor concerned notwithstanding that he is not a party to the application.

(5) This section shall also apply to a notice given by an auditor under section 160 (2) (c) of the Principal Act, indicating his unwillingness to be re-appointed.

(6) A person who fails to comply with subsection (2) or (3) (a) shall be guilty of an offence.

(7) If default is made in complying with subsection (3) (b), the company concerned, and every officer of such company who is in default, shall be guilty of an offence.

186 Requisitioning of general meeting of company by resigning auditor.

186.—(1) A notice served on a company under section 185 which contains a statement in accordance with subsection (2) (b) of that section may also requisition the convening by the directors of the company of a general meeting of the company for the purpose of receiving and considering such account and explanation of the circumstances connected with his resignation from the office of auditor to the company as he may wish to give to the meeting.

(2) Where an auditor makes a requisition under subsection (1), the directors of the company shall, within 14 days of the service on the company of the said notice, proceed duly to convene a general meeting of the company for a day not more than 28 days after such service.

(3) Subject to subsection (4), where—

(a) a notice served on a company under section 185 contains a statement in accordance with subsection (2) (b) of that section, and

(b) the auditor concerned requests the company to circulate to its members—

(i) before the general meeting at which, apart from the notice, his term of office would expire, or

(ii) before any general meeting at which it is proposed to fill the vacancy caused by his resignation or convened pursuant to a requisition under subsection (1),

a further statement in writing prepared by the auditor of circumstances connected with the resignation that the auditor considers should be brought to the notice of the members,

the company shall—

(I) in any notice of the meeting given to members of the company state the fact of the statement having been made, and

(II) send a copy of the statement to the registrar of companies and to every person who is entitled under section 159 (1) of the Principal Act to be sent copies of the documents referred to in the said section 159 (1).

(4) Subsection (3) need not be complied with by the company concerned if, on the application either of the company or any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter and the court may order the company's costs on an application under this section to be paid in whole or in part by the auditor concerned notwithstanding that he is not a party to the application.

(5) An auditor of a company who has resigned from the office of auditor shall be permitted by the company to attend—

(a) the annual general meeting at which, but for his resignation, his term of office would have expired, and

(b) any general meeting at which it is proposed to fill the vacancy caused by his resignation or convened pursuant to a requisition of his under subsection (1),

and the company shall send him all notices of, and other communications relating to, any such meeting that a member of the company is entitled to receive and the company shall permit him to be heard at any such meeting which he attends on any part of the business of the meeting which concerns him as a former auditor of the company.

(6) If default is made in complying with subsection (2), (3) or (5), the company concerned, and every officer of the company who is in default, shall be guilty of an offence.

187 Qualification for appointment as auditor.

187.—(1) Subject to section 190, a person shall not be qualified for appointment either as auditor of a company or as a public auditor unless—

(a) (i) he is a member of a body of accountants for the time being recognised by the Minister for the purposes of this section and holds a valid practising certificate from such a body, or

(ii) he holds an accountancy qualification that is, in the opinion of the Minister, of a standard which is not less than that required for such membership as aforesaid and which would entitle him to be granted a practising certificate by that body if he were a member of it, and is for the time being authorised by the Minister to be so appointed, or

(iii) he was, on the 31st day of December, 1990, a member of a body of accountants for the time being recognised under section 162 (1) (a) of the Principal Act, or

(iv) he was authorised by the Minister before the 3rd day of February, 1983, and is for the time being authorised by the Minister to be so appointed, or

(v) he is a person to whom section 188 applies, or

(vi) he is a person to whom section 189 applies, and is for the time being authorised by the Minister to be so appointed, and

(b) the particulars required by sections 199 and 200 in respect of such a person have been forwarded to the registrar of companies.

(2) None of the following persons shall be qualified for appointment as auditor of a company—

(a) an officer or servant of the company,

(b) a person who has been an officer or servant of the company within a period in respect of which accounts would fall to be audited by him if he were appointed auditor of the company,

(c) a parent, spouse, brother, sister or child of an officer of the company,

(d) a person who is a partner of or in the employment of an officer of the company,

(e) a person who is disqualified under this subsection for appointment as auditor of any other body corporate that is a subsidiary or holding company of the company or a subsidiary of the company's holding company, or would be so disqualified if the body corporate were a company,

(f) a person who is disqualified under subsection (3) for appointment as a public auditor of a society that is a subsidiary or holding company of the company or a subsidiary of the company's holding company,

(g) a body corporate.

(3) None of the following persons shall be qualified for appointment as a public auditor of a society—

(a) an officer or servant of the society,

(b) a person who has been an officer or servant of the society within a period in respect of which accounts would fall to be audited by him if he were appointed auditor of the society,

(c) a parent, spouse, brother, sister or child of an officer of the society,

(d) a person who is a partner of or in the employment of an officer of the society,

(e) a person who is disqualified under this subsection for appointment as a public auditor of any other society that is a subsidiary or holding company of the society or a subsidiary of the society's holding company,

(f) a person who is disqualified under subsection (2) for appointment as auditor of a company that is a subsidiary or holding company of the society,

(g) a body corporate.

(4) None of the following persons shall be qualified for appointment as a public auditor of a friendly society—

(a) an officer or servant of the friendly society,

(b) a person who has been an officer or servant of the friendly society within a period in respect of which accounts would fall to be audited by him if he were appointed auditor of the friendly society,

(c) a parent, spouse, brother, sister or child of an officer of the friendly society,

(d) a person who is a partner of or in the employment of an officer of the friendly society,

(e) a body corporate.

(5) A person shall not, by virtue of subsection (3) or (4), be disqualified for appointment as public auditor of a society or a friendly society at any time during the period of 2 years from the commencement of this section if on such commencement he stands duly appointed as public auditor of the society or friendly society, as the case may be.

(6) Subject to subsection (5), a person shall not act as auditor of a company or as a public auditor at a time when he is disqualified under this section for appointment to that office.

(7) If, during his term of office as auditor of a company or public auditor, a person becomes disqualified under the Companies Acts for appointment to that office, he shall thereupon vacate his office and give notice in writing to the company, society or friendly society that he has vacated his office by reason of such disqualification.

(8) This section shall not apply to the Comptroller and Auditor-General.

(9) A person who contravenes subsection (6) or (7) shall be guilty of an offence and liable—

(a) on summary conviction, to a fine not exceeding £1,000, and, for continued contravention, to a daily default fine not exceeding £50, or

(b) on conviction on indictment, to a fine not exceeding £5,000 and, for continued contravention, to a daily default fine not exceeding £100.

(10) (a) In this section “society” means a society registered under the Industrial and Provident Societies Acts, 1893 to 1978.

(b) References in this section to an officer or servant do not include references to an auditor or a public auditor.

(11) A recognition or authorisation by the Minister under section 162 of the Principal Act shall, notwithstanding the repeal of that section by this Act, continue in force as if given under this section—

(a) in the case of a recognition, until the time limit provided expires, or the Minister's decision is communicated to the body concerned, under section 191, whichever is the earlier, and

(b) in the case of an authorisation, until the time limit for the person to make the notification required by section 199 (3) expires.

188 Persons undergoing training on 1 January, 1990.

188.—(1) Without prejudice to section 187, a person to whom this section applies shall also be qualified for appointment as auditor of a company or a public auditor.

(2) This section applies to a person—

(a) who on the 1st day of January, 1990, was a person to whom Article 18 of the Council Directive applies, and

(b) who, following his admission, before the 1st day of January, 1996, to the membership of a body of accountants recognised under section 191, was subsequently awarded a practising certificate by that body, and

(c) in respect of whom such certificate remains valid.

189 Approval of qualifications obtained outside the State.

189.—(1) Without prejudice to section 187, the Minister may declare that, subject to subsection (2), persons who hold—

(a) a qualification entitling them to audit accounts under the law of a specified country outside the State, or

(b) a specified accountancy qualification recognised under the law of a country outside the State,

shall be regarded as qualified for appointment as auditor of a company or a public auditor.

(2) Before making a declaration under subsection (1), the Minister—

(a) must be satisfied that the qualification concerned is of a standard not less than is required by the Companies Acts to qualify a person for appointment as auditor of a company or a public auditor, and

(b) may direct that such a person shall not be treated as qualified for the purposes of subsection (1) unless he holds such additional educational qualifications as the Minister may specify for the purpose of ensuring that such persons have an adequate knowledge of the law and practice in the State relevant to the audit of accounts, and

(c) may have regard to the extent to which persons qualified under the Companies Acts for appointment as auditor of a company or a public auditor are recognised by the law of the country in question as qualified to audit accounts there.

(3) Different directions may be given under subsection (2) (b) in relation to different qualifications.

(4) The Minister may, if he thinks fit, revoke or suspend for a specified period, in such manner and on such conditions as he may think appropriate, any declaration previously made under subsection (1).

190 Consultation by Minister regarding standards and qualifications.

190.—(1) Before granting, renewing, withdrawing, revoking, suspending or refusing a recognition of a body of accountants under the Companies Acts, the Minister may consult with any person or body of persons as to the conditions imposed or standards required by the body of accountants concerned in connection with membership of that body or the awarding to persons of practising certificates.

(2) The Minister may also consult with any person or body of persons before forming any opinion or making any declaration in relation to the qualifications held by any person or class of persons as respects qualification for appointment as auditor of a company or a public auditor.

191 Recognition of bodies of accountants.

191.—(1) Where a body of accountants recognised under section 162 of the Principal Act satisfies the Minister, within three months after the commencement of this section—

(a) that the standards relating to training, qualifications and repute required by that body for the awarding to a person of a practising certificate are not less than those specified in Articles 3 to 6, 8 and 19 of the Council Directive, and

(b) as to the standards it applies to its members in the areas of ethics, codes of conduct and practice, independence, professional integrity, technical standards, disciplinary procedures,

the Minister shall renew such recognition.

(2) Where a body of accountants referred to in subsection (1) does not satisfy the Minister as to the matters specified in that paragraph, he shall withdraw the recognition of that body until he is so satisfied.

(3) Where a body of accountants which has not previously been recognised by the Minister under section 162 of the Principal Act applies for such recognition after the commencement of this section, the Minister may grant such recognition if he is satisfied as to the matters referred to in subsection (1) in relation to that body or may refuse such recognition if he is not so satisfied.

192 Provisions in relation to recognitions and authorisations by Minister under section 187.

192.—(1) The Minister may, at the time it is granted or at any time during the currency of a recognition or authorisation under section 187 by notice in writing given to the body of accountants or individual concerned, attach to the recognition or authorisation, as the case may be, such terms and conditions as he thinks necessary or expedient and specified in the notice.

(2) The Minister may, at any time during the currency of a recognition or authorisation under section 187, by notice in writing given to the body of accountants or individual concerned, amend its terms or conditions or insert into it or delete from it other terms or conditions.

(3) The Minister may, at any time during its currency, by notice in writing given to the body of accountants or individual concerned, revoke, or suspend for a specified period, a recognition or authorisation under the said section 187.

(4) (a) The Minister may require a body of accountants recognised for the purposes of the said section 187 to prepare and, within such period as may be specified in the requirement, to submit to the Minister for his approval a code prescribing standards of professional conduct for its members and providing for sanctions for breaches of the code, and the body of accountants shall comply with the requirement.

(b) A body of accountants may, at any time, prepare and submit to the Minister a code amending or revoking a code prepared by it under this subsection.

(c) The Minister may approve of a code submitted to him under this subsection.

(d) A code approved of by the Minister under this section shall be brought into operation and enforced by the body of accountants concerned in accordance with its terms.

(e) Where the Minister approves a code under this subsection, he may direct that such provisions of the code as relate to the professional integrity of auditors shall apply, with any necessary modifications approved by the Minister, to persons individually authorised by him.

(f) The Minister may, by regulations, make provision for the function of monitoring compliance by individuals with the code in accordance with paragraph (e). Such regulations may in particular provide for this function to be performed on behalf of the Minister by any body or person specified in the regulations. The regulations may also contain such incidental, consequential, transitional or supplementary provision as may appear to be necessary or proper to ensure compliance with the specified provisions of the code by the individuals concerned.

(g) Every regulation made by the Minister under this section shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation is passed by either House within the next 21 days on which that House has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

(5) References in this section to recognitions under section 187 include references to recognitions under section 162 (inserted by the Companies (Amendment) Act, 1982) of the Principal Act and references in this section to an authorisation under section 187 include references to authorisations under the said section 162.

193 Auditors' report and right of access to books and of attendance and audience at general meetings.

193.—(1) The auditors of a company shall make a report to the members on the accounts examined by them, and on every balance sheet and profit and loss account, and all group accounts, laid before the company in general meeting during their tenure of office.

(2) The auditors' report shall be read at the annual general meeting of the company and shall be open to inspection by any member.

(3) Every auditor of a company shall have a right of access at all reasonable times to the books, accounts and vouchers of the company and shall be entitled to require from the officers (within the meaning of section 197 (5)) of the company such information and explanations that are within their knowledge or can be procured by them as he thinks necessary for the performance of the duties of the auditors.

(4) The auditors' report shall state—

(a) whether they have obtained all the information and explanations which, to the best of their knowledge and belief, are necessary for the purposes of their audit,

(b) whether, in their opinion, proper books of account have been kept by the company,

(c) whether, in their opinion, proper returns adequate for their audit have been received from branches of the company not visited by them,

(d) whether the company's balance sheet and (unless it is framed as a consolidated profit and loss account) profit and loss account are in agreement with the books of account and returns,

(e) except in the case of a company that has taken advantage of any of the provisions of Part III of the Sixth Schedule to the Principal Act, whether, in their opinion, the company's balance sheet and profit and loss account and (if it is a holding company submitting group accounts) the group accounts have been properly prepared in accordance with the provisions of the Companies Acts and give a true and fair view—

(i) in the case of the balance sheet, of the state of the company's affairs as at the end of its financial year,

(ii) in the case of the profit and loss account (if it is not framed as a consolidated profit and loss account), of the company's profit and loss for its financial year,

(iii) in the case of group accounts submitted by a holding company, of the state of affairs and profit or loss of the company and its subsidiaries dealt with thereby, so far as concerns members of the company,

(f) in the case of a company that has taken advantage of any of the provisions of Part III of the Sixth Schedule to the Principal Act, whether, in their opinion, its balance sheet and profit and loss account and (if it is a holding company submitting group accounts) the group accounts have been properly prepared in accordance with the provisions of the Companies Acts and give a true and fair view of the matters referred to in subparagraphs (i) and (ii) and, where appropriate, subparagraph (iii) of paragraph (e) subject to the non-disclosure of any matters (to be indicated in the report) which by virtue of the said Part III are not required to be disclosed, and

(g) whether, in their opinion, there existed at the balance sheet date a financial situation which under section 40 (1) of the Companies (Amendment) Act, 1983, would require the convening of an extraordinary general meeting of the company.

(5) The auditors of a company shall be entitled to attend any general meeting of the company and to receive all notices of, and other communications relating to, any general meeting which any member of the company is entitled to receive and to be heard at any general meeting which they attend on any part of the business of the meeting which concerns them as auditors.

(6) A person who is appointed as auditor of a company or as a public auditor shall be under a general duty to carry out such audit with professional integrity.

(7) Any reference in the Principal Act to section 163 of or the Seventh Schedule to that Act shall be construed as references to this section.

194 Duty of auditors if proper books of account not being kept.

194.—(1) If, at any time, the auditors of a company form the opinion that the company is contravening, or has contravened, section 202 by failing to cause to be kept proper books of account (within the meaning of that section) in relation to the matters specified in subsections (1) and (2) of that section, the auditors shall—

(a) serve a notice on the company as soon as may be stating their opinion, and

(b) not later than 7 days after the service of such notice on the company, notify the registrar of companies in the prescribed form of the notice.

(2) Where the auditors form the opinion that the company has contravened section 202 but that, following such contravention, the directors of the company have taken the necessary steps to ensure that proper books of account are kept as required by that section, subsection (1) (b) shall not apply.

(3) This section shall not require the auditors to make the notifications referred to in subsection (1) if they are of opinion that the contraventions concerned are minor or otherwise immaterial in nature.

(4) A person who contravenes subsection (1) shall be guilty of an offence.

195 Prohibition on acting in relation to audit while disqualification order in force.

195.—(1) If a person who is subject or deemed to be subject to a disqualification order—

(a) becomes, or remains after 28 days from the date of the making of the order, a partner in a firm of auditors,

(b) gives directions or instructions in relation to the conduct of any part of the audit of the accounts of a company, or

(c) works in any capacity in the conduct of an audit of the accounts of a company,

he shall be guilty of an offence.

(2) Where a person is convicted of an offence under subsection (1), the period for which he was disqualified shall be extended for a further period of ten years from such date, or such other further period as the court, on the application of the prosecutor and having regard to all the circumstances of the case, may order.

(3) In this section—

(a) “company” has the meaning assigned to it by section 159, and also includes any society registered under the Industrial and Provident Societies Acts, 1893 to 1978,

(b) “disqualification order” has the meaning assigned to it by section 159.

196 Powers of auditors in relation to subsidiaries.

196.—(1) Where a company (referred to in this section as “the holding company”) has a subsidiary, then—

(a) in case the subsidiary is a body corporate incorporated in the State, it shall be the duty of the subsidiary and its auditors to give to the auditors of the holding company such information and explanations as those auditors may reasonably require for the purposes of their duties as auditors of the holding company,

(b) in any other case, it shall be the duty of the holding company, if required by its auditors to do so, to take all such steps as are reasonably open to it to obtain from the subsidiary such information and explanations as aforesaid.

(2) If a company or an auditor fails to comply with subsection (1) within five days of the making of the relevant requirement under that subsection, the company and every officer thereof who is in default, or the auditor, as the case may be, shall be guilty of an offence.

(3) In a prosecution for an offence under this section, it shall be a defence for the defendant to show that it was not reasonably possible for him to comply with the requirement under subsection (1) to which the offence relates within the time specified in subsection (2) but that he complied therewith as soon as was reasonably possible after the expiration of such time.

(4) A person guilty of an offence under this section shall be liable to a fine.

197 Penalty for false statements to auditors.

197.—(1) An officer of a company who knowingly or recklessly makes a statement to which this section applies that is misleading, false or deceptive in a material particular shall be guilty of an offence.

(2) This section applies to any statement made to the auditors of a company (whether orally or in writing) which conveys, or purports to convey, any information or explanation which they require under the Companies Acts, or are entitled so to require, as auditors of the company.

(3) An officer of a company who fails to provide to the auditors of the company or of the holding company of the company, within two days of the making of the relevant requirement, any information or explanations that the auditors require as auditors of the company or of the holding company of the company and that is within the knowledge of or can be procured by the officer shall be guilty of an offence.

(4) In a prosecution for an offence under this section, it shall be a defence for the defendant to show that it was not reasonably possible for him to comply with the requirement under subsection (3) to which the offence relates within the time specified in that subsection but that he complied therewith as soon as was reasonably possible after the expiration of such time.

(5) In this section “officer”, in relation to a company, includes any employee of the company.

198 Register of auditors.

198.—(1) The registrar of companies shall maintain a register containing the names and addresses of persons who have been notified to him as qualified for appointment as auditor of a company or as a public auditor.

(2) In this section and in section 199, “address”, in relation to a person, means his usual residential or business address.

199 Transitional provisions concerning register.

199.—(1) Subject to subsection (2), a body of accountants whose recognition has been renewed by the Minister under section 191 (1) or which has been recognised under section 191 (3) shall, within one month after such renewal or recognition, deliver to the registrar of companies the name and address of each of its members who is qualified for appointment under the Companies Acts as auditor of a company or as a public auditor.

(2) Without prejudice to the generality of subsection (1), a body of accountants based outside the State, whose recognition is renewed or granted as aforesaid, shall notify details of those of its members who wish to practise in the State.

(3) Every person who, immediately before the commencement of this section, holds an authorisation from the Minister under the Companies Acts to act as auditor of a company or as a public auditor (otherwise than by virtue of membership of a recognised body of accountants) shall, within one month after such commencement, deliver his name and address to the registrar of companies.

(4) If default is made in complying with subsection (1), the body of accountants concerned shall be guilty of an offence.

200 Duty to keep registrar informed.

200.—(1) Subject to subsection (2), where, by virtue of his becoming a member of a body of accountants, a person (other than a person referred to in section 199 (1)) becomes qualified for appointment as auditor of a company or as a public auditor, the body concerned shall, within one month of his becoming so qualified, deliver his name and address to the registrar of companies for inclusion in the register referred to in section 198.

(2) Without prejudice to the generality of subsection (1), a recognised body of accountants based outside the State shall notify details of those of its members who wish to practise in the State.