The Small Company Administrative Rescue Process has been saved
The Small Company Administrative Rescue Process
Accessible restructuring for small and micro companies
On 25th June 2021, the Companies (Rescue Process for Small and Micro Companies) Bill 2021 was published.
The Bill follows the publication of the proposals for the Small Company Administrative Rescue Process (SCARP) on 25th May 2021, public submissions in March 2021 and a report by the Company Law Review Group in October 2020.
The proposed SCARP legislation aims to provide a more accessible and cost-effective restructuring process for smaller companies. SCARP is largely modelled on existing Examinership legislation with some elements of personal insolvency legislation. In June 2015, the Circuit court introduced Examinerships hoping that this would make the process more accessible and cost effective for smaller companies. But it has not had the desired effect. Whilst Examinership is a flexible and well travelled restructuring process for larger companies, it has not been accessible for many smaller companies largely due to the costs involved in the process.
The impact of Covid on smaller companies (retail, hospitality, leisure and the services sectors in particular) has further exacerbated the need for a more cost-effective corporate restructuring process.
The SCARP Bill has now passed all stages of the legislative process and is expected to be enacted shortly.