Companies Bill 2012

The Irish government has recently issued the draft of the proposed new Companies Bill. It is proposed that this will consolidate and reform existing Irish company law and once enacted will be the largest piece of legislation in the State comprising a total of 25 Parts (1,429 Sections) and 17 Schedules. Parts 1-15 deal with the private company limited by shares (CLS) which will form the model company type while the remaining parts deal with other forms of companies (including designated activity companies, plc's, guarantee companies and unlimited companies).

Some key proposed changes
Some of the key proposed changes for private companies in the Bill include:

  • Single Director Companies
  • Directors’ Duties codified
  • Offences categorised (1 to 4 with 1 being the most serious and carrying a maximum fine of EUR500,000 or imprisonment up to maximum of 10 years)
  • Annual General Meetings may be dispensed in favour of written resolution
  • Written resolutions may be passed by a majority of members
  • Full and unlimited capacity effectively abolishing the “ultra vires” concept in relation to companies which will remove the requirement for an objects clause in its constitution Company Constitution (one document constitution)
  • Summary approvals procedure for certain activities for such as transactions with directors, financial assistance, capital reductions and solvent windings up
  • Mergers and divisions regime to be introduced

The aim of the proposed legislation is to clarify, simplify and enhance company law in Ireland. Adopting a modern company law regime will make it easier for companies to do business and make Ireland a more attractive option for companies.

What action do I have to take? 
Currently the Bill is a piece of proposed legislation and is subject to approval and subsequent enactment by the Oireachtas. Given the size of the Bill it is unlikely to be enacted prior to the end of 2013. Directors and company owners need take no action at this stage. We will be monitoring the Bill's parliamentary progress and will provide updates on transition arrangements/periods as the enactment approaches. More detailed information on the proposed changes and how they may affect your company or group will be provided in due course.

Questions
If you have any queries, please do not hesitate to contact either Ruairi Cosgrove or Fiona Barry.

Ruairi Cosgrove
Director
Email
Tel: 01 792 6070

   

Fiona Barry
Senior Manager
Email
Tel: 01 792 6720