That part of the Companies (Miscellaneous Provisions) Act 2013 which allows small private companies to apply directly to the Circuit Court to have an examiner appointed shall come into operation on 14 July next and the Circuit Court Rules have been amended to facilitate this process.
The criteria applying to companies who wish to apply directly to the Circuit Court to have an examiner appointed are that two of the following three conditions must be met:–
- balance sheet total not exceeding €4.4m;
- turnover not exceeding €8.8m; and
- number of employees not exceeding 50.
The application to the Court must contain a statement that the company is a small company (according to the latest relevant financial year of the company within the meaning of the 2013 Act) and the application must also set out the conditions which are met by the particular company.
The Circuit Court Rules mirror, to a very large extent, the Rules applicable to High Court examinerships which should assist in the efficient processing of such applications and all powers and jurisdiction that may be exercised by the High Court in an examinership may now be exercised by the Circuit Court.
The application to appoint an examiner must be brought in the Circuit where the registered office of the company is situated or where it has its principal place of business or if there is no registered office of the company and its principal place of business is outside the state, in the Dublin Circuit.
The motivation behind the extension of the jurisdiction is to create a more cost efficient process on the assumption that there will be reduced legal and professional fees, although it will take some time before it can be seen whether this will hold true in practice. The High Court still has jurisdiction to deal with applications for the appointment of an examiner to a small company and it will be interesting to see whether there will be resistance to the extension of the jurisdiction to the Circuit Court. Under the previous regime, the High Court could choose to remit a matter to the Circuit Court where it was satisfied that the total liabilities of the company did not exceed €317,000. However, this provision will be repealed with the commencement of Section 2 of the 2013 Act on 14 July 2014 and it appears that the High Court does not now have the power to remit an examinership to the Circuit Court of its own accord.