Avoiding Insolvency: SME Corporate Restructuring Options in Ireland

Financial pressure can threaten even the strongest SMEs. Discover how corporate restructuring solicitors in Ireland can help your business survive through SCARP, examinership, or informal restructuring.

Corporate Restructuring Solicitors in Dublin, Ireland: SME Support

What Does Corporate Restructuring Mean for SMEs?

Legal Frameworks for SME Restructuring in Ireland

There are several options available under Irish law, depending on the size of the business and the level of financial difficulty.

Examinership

Examinership is a court-supervised process that protects a company from its creditors for up to 100 days while a rescue plan is prepared. It is a well-established option, but for many SMEs it can be too expensive and complex due to the significant involvement of the courts.

SCARP – Small Company Administrative Rescue Process

Introduced in 2021, SCARP was created to make restructuring accessible for small and micro companies. It is faster, more affordable, and less court-heavy than examinership, but still provides vital protection from creditors while a rescue plan is prepared. Under SCARP, a qualified Process Advisor works with the directors and creditors to draft a plan that may include writing down debts, restructuring liabilities, or ending onerous leases with consent or court approval. If the majority of creditors vote in favour, the plan can return the company to solvency within weeks.

Informal Restructuring

In some cases, a full insolvency process may not be necessary. Informal negotiations with creditors, refinancing, or operational changes can sometimes restore stability. These approaches avoid the formality of examinership or SCARP, but still benefit from legal guidance to ensure agreements are fair and sustainable.

Why Early Action Matters for SMEs

One of the most important lessons for SMEs in financial difficulty is that time is critical. Problems rarely disappear on their own, and delaying advice can limit the options available. Seeking help early not only increases the chances of survival, it also helps protect directors from personal liability if things worsen. At Mannion Solicitors, we regularly see how timely restructuring can transform a business’s future. Early conversations open doors that may close if action is left too late.

FAQs About SME Corporate Restructuring in Ireland

Who is eligible for small business debt restructuring?

Small and micro companies may be eligible, especially under SCARP, if they meet certain size criteria and cannot, or are likely to be unable to, pay their debts. The company must not already be in liquidation.

What is the SCARP process in Ireland?

SCARP is a streamlined restructuring process for SMEs. It gives directors breathing space from creditors while a Process Advisor prepares a plan. If creditors approve the plan, the company can return to solvency within around 10 weeks.

Who can avail of SCARP?

SCARP is open to small companies (with turnover under €15m, balance sheets under €7.5m, and fewer than 50 employees) and micro companies (with turnover under €700,000, balance sheets under €350,000, and fewer than 10 employees), provided they meet at least two of these criteria. The company must be insolvent or likely to become insolvent but not already in liquidation.

How much does restructuring cost?

Costs vary depending on the process chosen and the complexity of the company’s situation. SCARP is designed to be more cost-effective than examinership, but early advice helps ensure expenses remain manageable.

How long does restructuring take?

SCARP is usually completed in under 10 weeks. Examinership can take several months, while informal negotiations may resolve matters more quickly depending on creditor cooperation.

What happens if restructuring fails?

If a company cannot be rescued, liquidation may follow. This is why early engagement with a solicitor is so important, as it maximises the chance of a successful rescue.

Conclusion - How Small Businesses in Ireland Can Restructure Successfully

Financial difficulty is one of the hardest challenges an SME can face, but it does not have to end in insolvency. Options such as SCARP, examinership, and informal restructuring exist to give small businesses a real chance at survival. At Mannion Solicitors, our team of corporate restructuring solicitors in Dublin is here to help SMEs understand their options and take the steps that protect their future. With the right guidance at the right time, businesses can restructure, recover, and continue to thrive.

Important Legal Disclaimer: This content is provided for general informational and educational purposes only. It is not, and cannot be construed as, professional legal advice. Since laws and specific circumstances apply to every unique case, you should not rely on this guide as a substitute for consulting a qualified solicitor. For advice tailored to your individual situation, please consult one of our experienced solicitors directly.

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