Simplified Liquidation Procedure

Act No. XVIII of 2025, the Companies (Amendment) Act(the "Act"), was recently published on the 11th of July 2025, although its provisions are yet to come into force. The Act includes several significant reforms, including a simplified dissolution process that aims to streamline and modernise the existing corporate liquidation framework.

Rationale behind Procedure

The underlying rationale for introducing the new procedure is to provide companies that have ceased trading, or that never commenced trading, with an expedited mechanism for strike off from the Registry of Companies. The reform appears intended to equip private limited liability companies with a level of procedural flexibility particularly for entities that have remained inactive for a considerable period and that are neither public limited companies nor regulated entities.

The newly introduced 'Simplified Liquidation Procedure' is expected to significantly shorten the time requires to strike off companies for which continued legal existence serves no practical purpose.

Qualifying Companies

Under the new procedure, a company that has remained inactive for at lease six months may, by means of a prescribed form signed by the Directors of the company, apply to the Registrar for its dissolution and, consequently, for its removal from the register of companies. Eligibility for this process is conditional upon meeting specific criteria. Among these are the requirements that within six months prior to filing the application, the company must not have conducted any business activities, employed any individuals, whether as officers or otherwise, or held outstanding obligations. The company must also declare that its shares have not been pledged at any time in the six months preceding the date of its application for dissolution.

Application Procedure

To initiate the procedure, the company must submit the relevant application forms to the Registrar consisting of the following:

• The prescribed B1 Form
• A new Statutory Form through which the company's directors will confirm that the company
• Is not a regulated entity
• Has discharged in full any liabilities towards its creditors and/or such liabilities have been written off by its creditors
• Has no pending legal proceedings
• Holds assets of €5,000 or less
• Has not entered into any contracts in the past six months other than with service providers.

Additionally, the company must confirm that:

• All dues due to any government authority or body have been settled
• Only company officers remain employed
• All of its bank accounts are closed
• VAT de-registration (if applicable) has been filed
• A shareholders' resolution approving the dissolution has been adopted.

The application must also include a declaration by the Directors confirming that they will assume the company's beneficial ownership and responsibility for any future obligations that may arise following the dissolution. Responsibility for these obligations must be explicitly assigned to a named individual, either a director or another authorised representative, together with the company secretary, who must also accept these responsibilities.

Once all documentation has been submitted, the Registrar will publish a notice in the Government Gazette, or in the website maintained by the Registrar and in a daily newspaper, stating that the company will be struck off after the expiry of a three-month period. During this time, the company would not be required to appoint or engage a liquidator. Instead, the simplified procedure allows the company to complete the process without the involvement of a liquidator, provided all statutory conditions are met. Accordingly, this represents a notable shift from the traditional liquidation regime, which typically requires the engagement of a separate liquidator. This procedure may not be initiated prior to the implementation of the amendment by Act No. XVIII of 2024, thereby creating a limitation for companies which are to benefit from it and seek to make use of it at this time. Although the said amendment was originally envisaged to come into force in November 2025, it has to date, not yet been implemented.

Effects of Procedure

The simplified liquidation procedure is expected to significantly reduce the time and cost associated with striking off inactive companies, which in turn eases the administrative burden on both businesses and the Registrar. By eliminating the need for a liquidator and introducing a streamlined document driven process, it provides a faster route for removing dormant entities from the register, leading to a more accurate companies register and better procedural certainty for directors, creditors, and regulators alike.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.