Order of Priority of Creditors

There are various types of creditors and these have different levels of priority when a dividend payment is made. This list and explanation places the creditors in order with the top ranking creditor taking first priority. Please ensure that you take advice on any debentures and security held by the company as this will affect the options available to your company.

  1. Secured creditors - these have a legal charge over assets owned by a company. This could, for example, be over buildings and land, plant, machinery, patents, goodwill and other intellectual property. Factoring / invoice discounting companies usually hold security over the book debts which are in their control.
  2. Creditors who hold a fixed and floating chargeThis occurs where a valid debenture has been registered against the assets of the company and the assets comprise an element of both fixed and floating assets. Fixed charge assets are referred to in the section above on secured creditors. Floating charge assets relate to assets that the company utilises in its day to day trading. This would include stock, work in progress and non-factored book debts, and office furniture.
  3. Preferential Creditors - preferential creditors consist of employees' claims for arrears of wages, holiday pay and pension payments.
  4. Revenue Commissioners - any unpaid taxes.
  5. Unsecured creditors - this relates to other creditors examples of which are trade and expense creditors, utility creditors, which are not secured. Some of these creditors may be connected to the company. For example, if a director has injected money into the company and has not been repaid, he is a connected unsecured creditor.
  6. Shareholders - these are the lowest ranking creditor.Information for EmployeesAn employee, who is in employment which is insurable for all benefits under the Social Welfare Acts (in general this means an employee who pays full P.R.S.I. contributions) is entitled to claim from the Insolvency Fund with the Department of Enterprise, Trade & Employment for arrears of wages and holiday pay, redundancy and minimum notice, if the employment ceases as a result of the employer becoming insolvent. The Company is obliged to provide a P45 to all employees of an insolvent Company.Our policy is that processing Employee Entitlements is dealt with immediately after appointment and is one of the highest priorities. We have a close working relationship with the Department of Enterprise Trade & Employment, thereby providing a smoother and more efficient service. 

Information for Employees

An employee, who is in employment which is insurable for all benefits under the Social Welfare Acts (in general this means an employee who pays full P.R.S.I. contributions) is entitled to claim from the Insolvency Fund with the Department of Enterprise, Trade & Employment for arrears of wages and holiday pay, redundancy and minimum notice, if the employment ceases as a result of the employer becoming insolvent. The Company is obliged to provide a P45 to all employees of an insolvent Company. 

Our policy is that processing Employee Entitlements is dealt with immediately after appointment and is one of the highest priorities. We have a close working relationship with the Department of Enterprise Trade & Employment, thereby providing a smoother and more efficient service.

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