Execs of firms impacted by CRO glitch will not face disqualification for now, the chief of the Corporate Enforcement Authority has said.

When a company is involuntary struck off it ceases to exist and can no longer trade or sell assets. Company directors also face potential disqualification consequences which would ban them from acting as a company director.

There is no risk that a director affected by errors made by the Companies Registration Office (CRO) will be disqualified for the moment, the head of the corporate watchdog has said.

Ian Drennan, chief of the Corporate Enforcement Authority (CEA) said he was aware that “certain issues” had arisen in the context of the resumption of the strike off programme and that the CRO was addressing them.

The CRO has suspended its entire involuntary strike off process after admitting to invalidly shuttering more than 1,500 companies.

It said that a series of “errors” meant that the majority of companies it included in the involuntary strike off process in recent months have “not been validly struck-off”.

When a company is involuntary struck off it ceases to exist and can no longer trade or sell assets. Company directors also face potential disqualification consequences.

“Pending resolution of the matter, there is no risk that directors of affected entities would be disqualified by the Corporate Enforcement Authority,” Drennan said in a statement. He did not respond to a query on what his views were on the errors made.

Amended documents

The CRO was accused of amending online documents to falsely portray that the struck off company was given a public 28-day warning notice. It was threatened with legal action by representatives of affected firms.

The agency also deleted five involuntary strike off lists published since November after complaints were raised by companies that it had altered the records.

In response to queries a CRO spokesman said it “regrets” the errors and “any confusion this may have caused”.

“The registrar is taking appropriate action to clarify and correct the situation, including publishing a clarification notice in the CRO Gazette and writing directly to all affected companies and their directors notifying them that they have not been struck off and are not dissolved.

“The involuntary strike-off process has been suspended pending a review of all aspects of the process,” the spokesman said.

Many of the 1,500 companies that had been dissolved have had their status reverted to “normal” in recent days.

Legal experts said the error and the subsequent move by the CRO to collectively revert the status of thousands of firms was unprecedented.

“It’s a body that’s all about governance and complying with obligations, so it’s concerning that this did happen,” one insolvency lawyer said.

Late last year, the CRO resumed enforcement action which had been paused since the start of the pandemic. This meant that it began a process whereby companies that have failed to file annual returns can be involuntarily struck off the register. The CRO declined to say whether it would cover legal costs of firms who had to instruct lawyers on foot of being invalidly dissolved.