MORE THAN 12,000 start-ups in Ireland every year will save a total of more than €6 million in professional fees associated with a company, as a result of one of a range of reforms to be introduced as part of the Companies Bill 2012, published today.
The Bill, which is the largest substantive bill in the history of the State, will provide significant benefits to companies by reducing red tape and making company law obligations easier to understand.
Changes included in the Bill will mean that many of the 12,500 private companies limited by shares which are established every year will be able to incorporate more easily, resulting in average savings of €1,200 in professional fees in each case, resulting in substantial improvements to the ease of doing business in Ireland by comparison to our competitors.
The Bill consolidates the existing 16 Companies Acts, which date from 1963 to 2012, into one act and it also introduces a number of reforms, which are designed to make it easier to operate a company in Ireland. Set out across 25 Parts, to ease the accessibility of the law for each different company type, the Bill contains 1,429 sections, and 17 Schedules.
The most common company type in Ireland, the private company limited by shares, will now, for the first time in Irish company law, be placed at the centre of the legislation.
All of the law which applies to this company type – which represents approximately 90 per cent of all companies registered at the Companies Registration Office – will now be contained together, in Parts 1 to 15 of the Bill, and this law will be set out logically to follow the life-cycle of a company, starting with the provisions governing incorporation, followed by the sections which apply to the ongoing operation of the company, before dealing with the provisions which apply to the closing down, or winding up, of the company.
The Companies Bill
It will now be possible for such a company to have only one director – there will no longer be a requirement to have a second director merely to comply with a requirement of the law.
Private companies will be able, for the first time, to engage in mergers and divisions (under the current law, there is no facility for two Irish private companies to merge).
Directors’ duties will be codified in the Bill, thereby making the law in this area more transparent and accessible. Currently many of the legal and equitable duties of directors are set out over more than 150 years of case-law.
All offences under company law will now be streamlined and categorised into four categories, with category 1 being the most serious, and carrying a maximum fine of €500,000 or a maximum term of imprisonment of 10 years.
The Bill also states SMEs will now be able to apply to the Circuit Court for examinership.
Any company will now be enabled to convert from its existing company type to any other company type which can be formed under the Bill. This will provide flexibility and greater options to companies which find a change in their circumstances.
Speaking today Minister Bruton said the government is “determined to make Ireland the best small country in the world in which to do business, so that more businesses can start-up, grow and create the jobs we need, and a key part of our plan is implementing a series of changes to reduce the red tape and administrative burdens imposed by Government on business”.