Major overhaul of Company Law published
Enterprise Minister Richard Bruton today published “Pillar A” of the new Companies Bill, which will make it cheaper and easier to start and run a business.
The legislation, which comprises 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.
Announcing the publication, Minister Bruton stated...
This reform, like many others announced recently by my Department, will have a significant impact on reducing business costs. After these reforms are enacted, for example, it will now be possible for a person to start a business without needing to find a second director. Small businesses will no longer have to go to the expense of holding a physical AGM every year. The burden of company legal documentation will be greatly reduced. And crucially, it will be easier for business-owners to find out the nature of their legal rights and duties and will reduce the need consult with lawyers.
Minister Bruton decided to publish Pillar A of the Bill in advance of the completion of drafting of the entire Bill in order to allow people and businesses who will be affected to prepare for the changes made by the legislation. It is expected that the remainder of the Bill will be published in 2012, with speedy enactment thereafter.
Pillar A will affect companies limited by shares, referred to as "cls" in the Bill rather than "ltd" companies, while Pillar B will deal with other types.
Key changes are:
The Bill can be found on the Department of Enterprise's page hereThe full press release can be read here
- A cls will be allowed to have only one director
- A cls will only be required to have one document in its company constitution, and the Act provides for a default document to apply in all cases except where the company changes this
- A cls will have the same legal capacity as a natural person, reducing the necessity to prepare long company constitutions, and reducing legal disputes caused by the ultra vires doctrine
- A cls will no longer be required to have a “physical” AGM every year – it will be possible to do this by correspondence
- Other changes include an exhaustive listing of the duties of directors (previously contained in caselaw) and of all criminal offences under company law