Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021
On 11 May 2021 the Minister for Trade Promotion, Digital and Company Regulation, Robert Troy TD, announced the priority drafting of the Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021.
The Bill amends the Companies Act 2014 to provide for a new dedicated rescue process for small and micro companies to be known as The Small Company Administrative Rescue Process (SCARP).
The Bill also makes miscellaneous amendments to the Companies Act 2014 and Industrial and Provident Societies Act 1893 to make permanent provision for virtual meetings. It further amends the Companies Act 2014 to progress recommendations made by the Company Law Review Group in relation to the provision of information to employees as creditors during a liquidation.
The main provisions of the Bill can be broadly summarised as follows:
- designed for “small” and micro companies (as defined by the Companies Act 2014) which represent 98% of companies in Ireland
- commenced by resolution of directors rather than by application to Court
- concluded within a shorter period than examinership
- overseen and assisted by insolvency practitioners – a ‘Process Advisor’
- the rescue plan can be passed by a simple majority in value of creditors
- provides for format of cross class cram down of debts designed to reduce costs
- does not require application to Court for approval of rescue plan (provided no creditor objections)
- gives safeguards against irresponsible and dishonest director behaviour
Further information on the Bill is available here.
