- New company formations are down 20 per cent on the same period as last year.
- Westmeath directors liable to lose personal assets.
- “Crisis clinic” being held in the Mullingar Park Hotel on Monday September 22.
The recent downturn in the Irish economy could result in a large proportion of new Westmeath companies failing and a new breed of directors facing the inevitable public embarrassment and the loss of valuable personal assets for the first time.
In addition to this, new company formations are down 20 per cent on the same period as last year according to the CRO which further shows the effect of the downturn on Irish companies. These were just some of the views expressed by Brian Walker, company law expert and barrister at the launch of his crisis clinic for company secretaries and directors being held in the Mullingar Park Hotel on Monday September 22.
Walker has also highlighted that Westmeath may be awash with cowboy directors with up to 85,000 nationwide – enough to fill Croke Park. A cowboy director can be described as any company director liable to be disqualified and in turn unfit to run a company due to non compliance with company law.
“There are a large number of company directors in Westmeath expected to be aware of and comply with 13 different Companies Acts since 1963, this can make the job of the director very onerous. Many of these directors fail to comply with these Acts either through lack of knowledge or blatant disregard to Irish Company law. What most people don’t realise is there are two types of cowboy directors, those who are guilty of uninformed wrongdoing and commit an offence through lack of knowledge of company procedure and those rogue traders who cheat the system for personal gain. The former bracket is easy to fall into so company law knowledge is crucial to save the directors’ blushes,” explained Mr Walker.
As the credit crunch deepens, many directors will be making themselves more aware of their obligations for the first time as business failure becomes more of a reality. “During the Celtic Tiger numerous new directors never took any notice of their obligations. Now many people will feel the effect of a recession for the first time which will leave many directors unable to pay their debts and unaware that court action and seizing of personal assets could be forthcoming. Companies are used to seeing the upside of the economic boom but now that tougher times are upon us directors may come under increasing pressure,” warned Mr Walker.
These alarming figures are bad news for directors and company secretaries and a firmer knowledge of company law is needed to prevent them being struck off the register. According to the companies reports presented to the Oireachtas, over 100,000 companies have been struck off nationwide since 1995 and Westmeath is not exempt.”It is vital that company directors and secretaries ranging from private, voluntary and charitable organisations are informed and kept up to date on all company law issues as many of these directors are completely unaware of their wrongdoings and left open to the consequences,” said Mr Walker.
Brian Walker is running a number crisis clinics across the country visiting the Mullingar Park Hotel on Monday September 22. The clinics help company secretaries and directors to better understand company law and could save them the embarrassment of a court order or from being banned as a manager or director.
For more information visit http://www.cpdseminars.ie.
