Ireland: company law reform update

The Department of Enterprise, Trade and Employment has published its 2008 Companies Report. Chapter two of the report concerns company law reform and provides the following update: 

On 25th of July 2007 the Government approved the General Scheme of the Companies Consolidation and Reform Bill, as prepared by the [Company Law Review Group], for drafting by the Office of Parliamentary Counsel. It is envisaged that substantial progress towards the completion of drafting will be made by late 2009. The Companies Consolidation and Reform Bill will consolidate the existing 13 Companies Acts, as well as other regulations and common law provisions relating to the incorporation and operation of companies, into a single Act, comprising in the region of 1263 sections. In summary, the provisions cover the incorporation of companies, corporate governance, duties of directors and secretaries, financial statements and auditors, receivers, reorganisations and examinerships, windings-up and compliance and enforcement. The provisions are brought together in a coherent manner that will facilitate business people in incorporating and operating companies on a day-to-day basis.

The Bill also modernises company law to reflect modern business practice. Reflecting the fact that 90% of companies in Ireland today are in the form of a ‘private company limited by shares’, the first part of the Bill will set out all of the provisions relating to that type of company. In the second part, the provisions for the ‘private company’ are modified for other company types such as public limited companies (PLCs). The Bill is intended to simplify the process of establishing and operating a company subject to specific safeguards for shareholders and creditors. To promote compliance with the law and to protect investors and creditors, the Bill will also set out clearly the corporate governance duties of directors, company secretaries and auditors. The functions of the Companies Registration Office, the Office of the Director of Corporate Enforcement and the Irish Auditing and Accounting Supervisory Authority will also be detailed. The Bill will bring together the provisions relating to compliance and enforcement such as company investigations, compliance and protective orders, disclosure orders, disqualification and restriction of directors and prosecution, offences and evidential matters".