Dara Calleary (Mayo, Fianna Fail)
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Question 98: To ask the Minister for Jobs, Enterprise and Innovation the remedies in place for creditors of a company that has been liquidated or entered receivership and whose directors established a new entity trading in the same sphere. [11755/12]

Richard Bruton (Dublin North Central, Fine Gael)
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A fundamental principle of company law is that a company is a separate legal entity from the Members or Shareholders of the company. The order of preferential payments in the liquidation of a company is set out at section 285 of the Companies Act 1963 as amended. Section 98 of that Act contains relevant provisions as to the position where a receiver is appointed under a floating charge.

The Company Law Enforcement Act 2001 established the Office of the Director of Corporate Enforcement and strengthened the legislative provisions dealing with insolvent companies. The Director has powers to initiate company investigations, prosecutions, restrictions and disqualifications with a view to curbing abusive practices by directors. Section 56 of the Company Law Enforcement Act 2001 provides that the liquidator of an insolvent company must submit a report to the ODCE together with information on the conduct of any person who was a director of the company during the 12 months preceding its liquidation. The liquidator must also proceed to apply to the High Court for the restriction of each of the directors of the insolvent company, unless relieved of that obligation by the ODCE.

A restriction declaration, if made, prohibits an individual from acting, either directly or indirectly, as an officer of a company or from being involved in its formation or promotion for five years, unless the company is adequately capitalised. In the case of a private company, the capital requirement is €63,487 in allotted paid-up share capital. The equivalent figure for public companies is €317,435.