If changes proposed by the Irish Company Law Review Group in the Companies Consolidation Bill 2012 are adopted later this year then Ireland will see the biggest shake-up in Company Law for many years.
The group's proposals are envisaged to develop Ireland as a world class company legal infrastructure and to promote and facilitate commerce.
There are currently in excess of 159,000 private limited companies and 4,000 branches of foreign companies and EVERY very private limited company will be affected if these changes go forward.
Key proposals include:
- Only one director and secretary will be required but they must be separate persons and the company secretary must be 'suitable' and will take on additional responsibilities under the proposed legislation such as informing senior management of significant issues affecting the company
- A new constitution will replace the current memorandum & articles unless you opt to keep Table A articles before the transition deadline, which is yet to be announced. Table A articles of association will be replaced by Pillar A unless you opt to keep Table A above
- Private Limited Company, currently denoted by 'Limited' will become Company Limited by Shares (denoted by CLS)
- There will be an EU directive on euro business to enable access to any euro company through one portal
- Four options will be available to convert to a CLS
- The simplified process involves adopting old articles plus name, main objects,share capital etc, this is done by the CRO who issue a s19 constitution
- There will be a prohibition from under 18's acting as director.
Clearly Ireland has a way to go still to improve its company compliance levels.
There are approximately 25,000 companies who lose out on audit exemption each year due to late filing and this results in increased professional costs and CRO late filing fees.
High Court actions to restrict Company Directors of insolvent companies have looked in the past at how responsibly the Directors assess company financials such as profitability & management accounts
A new fines act, which bring fines ranging from € 500 to € 5000 and white collar crime legislation may well assist in achieving better compliance in the future.
We will be keeping an eye on the status of these proposals and advising our clients how best to proceed. If you would like further information, click here to contact us.
See www.clrg.org for full draft of Companies Consolidation Bill 2012