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| Main Provisions of the Companies Bill |
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By
Conor Sweeney, OmniPro
Nov 15, 2011 |
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The Department of Jobs, Enterprise and Innovation recently published “Pillar A” of the Draft Companies Bill. The legislation, which comprises of 952 sections and six schedules on over 1300 pages of text, is expected to represent the largest piece of legislation in the history of the State when complete. It is the most significant reform in Irish company law since 1963, and consolidates the 15 existing Company Acts as well as a significant number of statutory instruments and judgments.
The Company Law Review Group has worked on the Consolidated Companies Bill since 2000 and recognised that the Private Company Limited by Shares is the main company type used in Ireland and the Companies Bill should be designed on this company type.
Main Changes in Pillar A of the Companies Bill
- The Private Company Limited by Shares will be known as a Company Limited by Shares (“CLS”)
- The doctrine of Ultra Vires will be removed so that there will be no requirement for an objects clause
- CLS will have a one document Constitution replacing the Memorandum and Articles of Association. Most provisions in Table A have been included in the Bill unless dis-applied by the company’s constitution
- CLS may have 1 Director and a Company Secretary. Single Director cannot act as the Company Secretary
- CLS may have 99 members
- CLS will be not be permitted to list any securities
- CLS may dispense with holding the AGM
- Ability to pass majority written resolutions
- Directors of companies over certain thresholds will be required to make compliance statements regarding compliance with Company Law and Tax Law as recommended by the CLRG
- One omnibus validation procedure will apply to regulated activities including transactions with directors, giving financial assistance, capital reductions & members voluntary winding ups.
- Directors must certify that there is no relevant audit information that the company’s statutory auditors are not aware of.
- Directors Duties & Responsibilities have been codified into 1 section in the Bill
- Company Law offences have been categorised on a scale of 1 to 4, 1 being the most serious. The penalties for breach of these offences will be clearly specified.
Structure of Pillar A
- Part 1 - Preliminary and General
- Part 2 - Incorporation and Registration
- Part 3 - Share Capital, Shares and Certain Other Instruments
- Part 4 - Corporate Governance
- Part 5 - Duties of Directors and Other Officers
- Part 6 - Financial Statements, Annual Return and Audit
- Part 7 - Charges and Debentures
- Part 8 - Receivers
- Part 9 - Reorganisations, Acquisitions, Mergers and Divisions
- Part 10 - Examinerships
- Part 11 - Winding Up
- Part 12 - Strike Off and Restoration
- Part 13 - Investigations
- Part 14 - Compliance and Enforcement
- Part 15 - Functions of Registrar and of Regulatory and Advisory Bodies
Pillar B – Other company types
- Pillar B is divided up by the various other company types including
- Public Limited Companies (“PLC”)
- Guarantee Companies (“CLG”)
- Unlimited Companies (“ULC”)
- Designated Activity Companies (“DAC”)
- Unregistered Companies
- Investment Companies
In these Parts, they will apply the appropriate provisions from Pillar A plus specific provisions for that company type.
Enactment of Companies Bill
The Parliamentary Draftmans is currently working on Pillar B which should be published in 2012. It is hoped the Companies Bill will be passed by the Dail in 2013 with commencement orders signed in 2014.
Conor Sweeney,
OmniPro,
Unit 3, South Court,
Wexford Road Business Park,
Carlow.
059 9183888
csweeney@omnipro.ie
www.omnipro.ie
Conor is speaking on the following CPD courses between now and the end of the year.
| Book on any of these courses and be entered in a draw for an iPad 2. |
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