Companies Act 2014 section 570

Circumstances in which company deemed to be unable to pay its debts

Section 570 sets out the four circumstances in which a company is legally deemed to be unable to pay its debts, which is a key trigger for winding-up proceedings.

• A single creditor owed more than €10,000 can serve a written demand at the company's registered office, and if the company fails to pay, secure, or settle the debt within 21 days, it is deemed unable to pay its debts.
• Two or more creditors collectively owed more than €20,000 can jointly serve a written demand, and if the company fails to pay, secure, or settle with each creditor within 21 days, the same presumption of inability to pay applies.
• A company is deemed unable to pay its debts if a court enforcement action on a judgment in favour of a creditor is returned unsatisfied in whole or in part.
• The court may determine that a company is unable to pay its debts based on the evidence before it, and in doing so must take into account not only current debts but also contingent and prospective liabilities.