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‘Massive’ overhaul of company law will make it cheaper to start business

Richard Bruton’s Companies Bill, being published in part today, claims to be the biggest reform of company law since 1963.

Richard Bruton's new Companies Bill aims to reduce the cost of starting a new business.
Richard Bruton's new Companies Bill aims to reduce the cost of starting a new business.
Image: Sasko Lazarov/Photocall Ireland

MINISTER FOR ENTERPRISE Richard Bruton has published what his department describes as the most significant reform of Irish company law since 1963.

The Department of Enterprise, Jobs and Innovation this morning published extracts from the Companies Bill, which in its entirety is expected to become the largest single piece of legislation in Irish history when it is published in full.

The excerpt published includes 952 sections and six schedules, and stretching to 1,407 pages of text. It consolidates the existing 15 Company Acts, secondary legislation and legal judgments.

The reform also aims to make it easier to set up a business and reduce the costs of operating a small firm through removing the needs for small firms to hold a physical AGM, cutting down on the legal documentation required and reducing the need to consult with lawyers.

Among the other measures proposed in the legislation are:

  • the introduction of a standard single ‘company constitution’, replacing traditional memorandums of association; the Bill provides a single generic constitution which new companies will automatically take unless they replace one
  • publishing an exhaustive list of the requirements of company directors, which previously were only listed in case law
  • defining a private company as having the same legal capacity as a person by law, intended to reduce legal disputes.

The first excerpt, dubbed ‘Pillar A’ of the Bill, was published early so that businesses would be able to plan for its changes in advance of them being given legal effect.

‘Pillar B’, which will deal with public companies, will be published in 2012 with the Bill then brought to the Oireachtas where the government hopes it will pass speedily.

About the author:

Gavan Reilly

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