merrion street

11th October 2013

The Minister for Jobs, Enterprise and Innovation, Richard Bruton TD, together with the Minister of State for Small Business, John Perry TD, today[Friday] announced the fast-tracking of legislation to allow businesses to apply to the Circuit Court for examinership.

The measure, part of the Government’s Action Plan for Jobs, is aimed at reducing the costs associated with an application for examinership and enabling increased numbers of businesses – in particular SMEs – to apply for examinership as a route out of difficulties. In particular, businesses with large potential for growth and job-creation, but who are being held back by legacy debt problems, are expected to benefit from the move.

According to the Department of Justice, costs in the Circuit Court are on average 30% lower than in the High Court, subject to the complexity of the case.

The Companies (Miscellaneous Provisions) Bill will now be drafted on a priority basis by the Office of the Parliamentary Counsel, and enactment by end 2013 is targeted.

Other provisions contained in the Bill include a measure aimed at reducing the cost of compliance for businesses by making it easier to file statutory accounts online.

Minister Bruton said:

“There are 200,000 small businesses in Ireland employing over 650,000 people, over a third of our total workforce. Many of these businesses have great growth potential but face legacy debt problems after the crisis, due in some cases to property investments, in others to trading difficulties in others to unsustainable rents. We believe that if we can create a mechanism for them to deal with these legacy problems we can not only save large numbers of jobs but also unlock the potential for the growth and job-creation we so badly need.

“Today’s announcement that small companies will be able to apply to the Circuit Court for examinership will mean that it will be cheaper and easier for businesses to restructure their debts, meaning that more companies will be able to do so. This will mean that more businesses can survive their current difficulties and start to grow, meaning crucially that more jobs will be saved and more jobs will be created in this hugely important part of the economy”.

“This is part of a programme of measures which we are putting in place through the Action Plan for Jobs to support SMEs, including for example a streamlined support service for small and micro-businesses through reforms to the CEBs and local authorities, and a range of new credit schemes totalling more than €2billion in new funding for businesses.

“We believe that with the proper Government support more businesses can survive their current difficulties and start to grow, meaning crucially that more jobs will be saved and more jobs will be created in this hugely important part of the economy”.

For further information please conact:

Press Office, Department of Jobs, Enterprise and Innovation: Tel: 01 631 2121, press.office@djei.ie

NOTES TO EDITORS

In late 2012 Minister Bruton announced his intention to proceed with legislation to allow businesses apply to the Circuit Court for examinership, and a provision to give effect to this was included in the Companies Bill, published in December 2012. This Bill, the largest substantive Bill in the history of the State, comprises 1429 sections, has completed second stage but owing to the complex nature of the Bill it is expected to take a period of time before the enactment process is completed.

As such, given the priority attached by this Government to supporting businesses and job-creation, it was decided to proceed on a priority basis with the provisions relating to Circuit Court examinership as well as a small number of others.

More detail on the provisions contained within the Bill is as follows:

1. Amendment of existing examinership provisions for small private companies. The first provision will allow small private companies to apply directly to the Circuit Court to have an examiner appointed instead of having to apply to the High Court first, as is currently the case. This will lower costs and provide greater accessibility for small private companies to the examinership process by eliminating the need for High Court involvement. Small companies are those defined as such in Company Law, meaning that they satisfy two out of the following three conditions:

· Balance sheet not exceeding €4.4million

· Turnover not exceeding €8.8million

· Number of employees not exceeding 50

2. Provision for a more efficient electronic filing of accounts with the CRO. The second provision will simplify the process of e-filing by companies of annual returns. It will provide for a more efficient electronic filing of accounts with the Companies Registration Office by removing a true copy requirement. It will also reduce the administrative burden associated with the filing of accounts by companies.

3. The facilitation of the disclosure to the Director of Corporate Enforcement of information relating to offences under the Companies Acts by certain regulatory authorities. The third provision allows specified regulatory authorities to disclose information relating to offences under the Companies Acts to the Director of Corporate Enforcement.

4. A levy on statutory auditors and audit firms of Public Interest Entities (PIEs) in order to defray the costs to Irish Auditing and Accounting Supervisory Authority (IAASA) for carrying out the functions of external quality assurance in respect of these Public Interest Entities. The fourth provision would enable the Irish Auditing and Accounting Supervisory Authority (IAASA) impose a levy on relevant statutory auditors and audit firms to defray the costs of carrying out the quality assurance function, which it is proposed will be transferred from the Recognised Accountancy Bodies to IAASA. (Quality assurance is the regular inspection of statutory auditors and audit firms to ensure that systems are in place that will allow for consistently high quality audits. Public interest entities are, in summary, systemic entities and listed companies.)

5. Application of investigation and penalty systems to certain third country auditors/audit entities who carry out audit on companies incorporated in specific third countries and territories. Two Commission Decisions, 2011/30/EU, as amended by Commission Decision 2013/288/EU, set out regimes to be applied by Member States the auditors and audit entities that carry out audits of the annual or consolidated accounts of companies incorporated in certain third countries, whose transferable securities are admitted to trading in the State. These regimes are based on evaluations carried out by the EU Commission on the public oversight systems for auditors and audit entities of particular territories which have concluded that these are not equivalent the systems applicable in the EU. The facility for IAASA to apply powers in respect of auditors of the accounts of companies based in these territories is therefore considered prudential

ENDS