State 'may be missing out on millions' from struck-off firms

The State is potentially losing out on millions of euro because no system is in place to collect the assets it may be entitled to from dissolved companies, according to the chairman of the Public Accounts Committee (PAC), Seán Fleming.

He said almost 17,000 companies were struck off by the Companies Registration Office between 2013 and 2015. “The vast majority will have no assets but a minority will,” he said.

Minister for Public Expenditure and Reform Paschal Donohoe said that since 2013 a total of €11,880,357 in monetary assets had been transferred from dissolved companies.

In a written parliamentary reply to Mr Fleming, the Minister said that in 2013 €151,997 was transferred, with €10.843 million the following year, of which €10,687,278 was for one company. Last year €513,400 was transferred and €371,483 to date this year.

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Windfall

The PAC chairman said it was his understanding that the €10.68 million payment was an unexpected windfall that came to the State via a firm of solicitors from outside the State.

The State’s entitlement to the assets of companies struck off the register is based on the 1954 State Property Act, which aims to ensure there is no gap in legal ownership of the assets of a dissolved company.

Once a company is struck off, its assets are automatically vested in the Minister. Mr Donohoe said in his reply that it “does not require any intervention from the Minister. As a result the Minister is not aware of assets vested in him on the dissolution of a company and therefore it is not possible to quantify or value assets that may have devolved to him.”

Monitoring

But Mr Fleming said there is no system in place to ensure that what the Act specifies actually happens: that it is automatically transferred. Nobody is monitoring to ensure that “what’s stated in the Act happens in practice”.

Companies are struck off if returns are not filed for five years and Mr Fleming said there could be assets such as land or buildings.

He said a mechanism should be put in place so that the Companies Registration Office would update the department every few months about what companies have been struck off, with the latest available information and address, so that officials of either the department or the Revenue Commissioners could check for assets.