Thursday 19 October 2017

Analysis: Irresponsible directors beware - big changes are coming in how our companies are policed

Company directors should realise there are big changes ahead, with the ODCE and the CRO set to become much more severe in how they police company matters. Stock photo: Depositphotos
Company directors should realise there are big changes ahead, with the ODCE and the CRO set to become much more severe in how they police company matters. Stock photo: Depositphotos

PJ Lynch

In our growing economy, the volume of companies petitioning for examinership or being placed in liquidation has reduced considerably. However, with the uncertainty that has come with the Trump presidency and Brexit, it would be negligent of companies not to prepare for challenges.

What happens if your company is hit by a financial hammer blow as result of trading difficulties? The first thing to remember is not to let the rot set in. Discuss the matter with your financial adviser and decide on the best way forward. Directors of companies in difficulty usually have one of two options.

Option 1: If they feel the financial state of the company is reasonable and it can trade out of its difficulties, then it can apply to the courts to appoint an examiner. This procedure will allow 100 days to put a scheme in place for approval by the court and will be beneficial to both employees and creditors alike.

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