Companies going out of business

When you hear that a company is closing down, or you hear rumours that it is about to close down, you will often also hear the words liquidation, examinership, administration, and receivership. This news can be of concern to everyone involved including traders, suppliers, creditors, staff and consumers.

Our information will help you understand the impact on you if a company going out of business. Each situation is likely to have different circumstances so our information is a guide only and you should bear this in mind. You should, however, act quickly in all cases.

In general, you may be at greater risk of suffering a loss if you have paid for goods or services that haven't yet been delivered when a trader or company goes out of business.

There are four main ways in which you could lose your money in the event of a company going out of business:

You have paid in full for a product to be collected/delivered at a later date
You have paid a deposit on a product
You bought gift vouchers or gift cards from the company
You discover you have a faulty product

If the company goes into examinership, liquidation or receivership, you will be treated as an “unsecured creditor”. A creditor is someone the company owes money to. You, as a consumer, are deemed a creditor if a company goes out of business and has not delivered goods you have paid for and therefore owes you money. However, as an unsecured creditor you rank behind other types of creditors, such as Revenue, staff of the company who are owed wages and banks that are owed money by the company.

What to do

There are number of things you can do to protect yourself from being affected by a company's closure:

Think carefully before deciding to pay in advance for goods
Only offer to pay a small deposit
Before placing a deposit, check with the seller on how long it will take before the goods can be delivered
Do not pay in full for items if there is a long delivery period involved. Even if you have only paid a deposit, avoid buying items if there is a long delay in delivery.
When goods are delivered, check them immediately for possible faults and to make sure they are the items you paid for
If possible, pay by credit card or by debit card
Use gift vouchers or credit notes quickly. If a business goes into liquidation and you have an unused gift voucher or credit note, you will be treated as an “unsecured creditor” under the liquidation process.

If you have paid money over to a trader who goes out of business before your goods are delivered, what can you do?

If the retailer goes into liquidation and your goods have not been delivered, contact the liquidator for information on how to take possession of your goods.
Your contract is with the retailer. So, if a retailer's supplier goes out of business, rather than the retailer itself, the retailer should fix the problem for you.
Check the company's website and also the website of the liquidator, examiner or receiver to get the latest news on the company's situation. Contact the official appointed to look after the company's affairs for further details.
If you have been given a guarantee by the manufacturer, you could also make a claim against the manufacturer if the goods turn out to be faulty.
If you paid for goods by credit or debit card, ask your card provider to reverse the transaction using a chargeback.

Information on the liquidator/examiner/receiver for the company is available from the Companies Registration Office (CRO)