I move that the Bill be now read a Second Time. The purpose of this Bill is to amend the law relating to companies, which is at present laid down in the Companies Acts, 1908 to 1959. In 1958 the report of a Committee (now known as the Company Law Reform Committee) which had been appointed by the Attorney General to examine the need for changes in our system of company law, was published, and copies were circulated to members of both Houses of the Oireachtas. As an interim measure, a limited number of the more important changes recommended by the Committee were dealt with in a special Bill which is now on the Statute Book as the Companies Act, 1959. At that time I explained that the preparation of a second Bill to carry through the remaining changes in the law which were deemed to be necessary would be a very complex and formidable task and that some time would be needed to prepare a comprehensive and carefully thought out measure.
In the event, the preparation of this second Bill has taken rather longer than I expected, but this was due to a large extent to circumstances beyond my control. The principal problem was that while the preparation of the Bill was in progress, two further investigations into company law were commenced, one in the Six Counties and the other in Britain. We cannot, in framing our legislation, ignore any changes which may be contemplated in the Six Counties or Britain, with each of which we have such close commercial ties. In this connection I would refer to the recommendation of the Company Law Reform committee that company legislation in this country should not depart too far in its general principles from that in operation in Britain and the Six Counties.
The Committee drew attention to the fact that company law as it exists in Britain is familiar to business and commercial circles in the United States and in the countries of Continental Europe. They also referred to the fact that the encouragement of outside investors is part of our public policy, and they thought that a system of company law corresponding broadly with that in force in other countries would be a material inducement to investment here. These points have been borne in mind in drawing up the provisions which are contained in the present Bill.
On the question of alignment with the law in neighbouring countries, a peculiar difficulty has now arisen. The Six Counties legislation was enacted as recently as 1960, and it will differ substantially from British law if the recommendations of a recent Committee of Enquiry which reported in Britain are accepted, as they seem likely to be. It is, of course, not possible to bring our law into line with two enactments differing considerably from each other. I am, however, quite satisfied that subject to a number of amendments which I propose to introduce at the Committee Stage, the provisions contained in the Bill now before the House will deal adequately with the circumstances of our own particular case and that, if enacted. they will bring about a very considerable improvement in this particular branch of the law.
It has been suggested that we should wait until British company law has been amended following the recommendations of the recent Committee which reported there, but I am quite convinced that no useful purpose would be served in so doing. Our company law is seriously out of date and successive Ministers have over the last 30 years been endeavouring to secure the opportunity of putting it right; now that we have gone this far and have prepared a Bill which I regard as perfectly suitable for Irish conditions there should be no going back, and I hope that Deputies will agree with this view.
This is, I believe, the biggest piece of legislation which has been put before the Oireachtas since the establishment of the State. With its 400 sections and 13 schedules it is so all-embracing that it is rather difficult to give a satisfactory summary of its contents. An explanatory Memorandum giving some brief information about the principal changes which are now being made has been circulated to Deputies, and I hope that they will find it useful in considering the measure; if any further information of a more detailed nature is required I will be glad to provide it during the Committee Stage. In what follows I propose to mention only the major provisions in the Bill.
First of all, I would like to refer to the provisions relating to accounts, which are set out in Sections 147-159 of the Bill. The existing requirements in regard to accounts are scanty in the extreme, and there has for a long time been a demand that more comprehensive information should be statutorily required. The better-run companies have, of course, even in the absence of statutory requirements, made a practice of preparing informative accounts which are useful both to their own shareholders and to persons having business dealings with them. There have, unfortunately, also been a number of "black sheep", who have persisted in the preparation of accounts designed more to conceal the true position rather than to provide an accurate indication of the state of their finances. It is now proposed to place a specific obligation on every company to keep proper books of account and to prepare each year a profit and loss account and balance sheet which, apart from giving a true and fair view, must also comply with the detailed requirements of the Sixth Schedule.
In the case of holding companies, there will in future be an obligation to prepare group accounts, the effect of which will be to give a concise picture of the financial position of the holding company and its subsidiaries considered as a single undertaking. As recommended by the Company Law Reform Committee, however, it is considered unnecessary to apply the latter provision to private companies, but as Deputies will see from Section 154, the interests of shareholders in private holding companies are being adequately safeguarded in another manner. Any directors who do not adequately attend to their duties in regard to the keeping of books of account and the preparation of the profit and loss account and balance sheet, will render themselves liable to the very severe penalties set out in Sections 147 and 148 of the Bill.
The directors of every company will be required not merely to lay the detailed accounts before each annual general meeting, but also, in compliance with Section 159, to send them to shareholders and debenture-holders three weeks beforehand. In order to ensure that the interests of creditors and other persons are safeguarded, Section 128 imposes on every public company the obligation to file these accounts with the annual return which is sent to the registrar of companies each year and which is available for public inspection.
The obligation to file accounts for public inspection will not, however, apply to private companies. This does no more than continue a privilege which private companies have enjoyed for very many years, and is in conformity with the recommendations of the Company Law Reform Committee. I do not think it necessary to set out in detail here the various arguments for and against the continuation of this privilege, and I think I can do no better than to refer Deputies to paragraphs 110 to 120 inclusive of the report of the Company Law Reform Committee, which I think deals adequately with the point. Deputies are probably aware that this privilege was partially withdrawn in Britain in 1948 and that its total withdrawal has now been recommended; the situation in the Six Counties is, of course, the same as that which obtains here.
I should like to emphasise that conditions as regards company organisation in Britain differ considerably from those prevailing here in Ireland, and the arguments which might be put forward for the publication of the accounts of private companies in Britain would not necessarily apply here. The vast majority of private companies established here are family concerns essentially of a private nature in which outside interests play little or no part and this, I think, is the principal reason why we should not impose on them the altogether new requirement that they should file their accounts.
Since I am on the subject of accounts, I think it no harm to refer to the fact that the report recently published in Britain recommended a considerable number of changes in the British provisions relating to the form and content of the profit and loss account and balance sheet. Generally speaking, the effect of these recommendations, if adopted, will be to require disclosure of certain matters in rather greater detail. I think there is probably a good deal to be said for many of the recommendations which have been put forward, at least in relation to the larger type of company.
It would, however, be impossible to say at this stage whether all these recommendations will be accepted, and, if so, in precisely what form effect will be given to them. I think it would be most unwise to impose on our companies more onerous obligations in regard to disclosure of their financial affairs than those which prevail in neighbouring countries, since this would place them at a competitive disadvantage. It was, however, always my intention that the accounting provisions of the new Act should be drafted in such a way that improvements might be introduced by a simple procedure from time to time. To this end, Section 396 enables me to make Orders altering the provisions of the Act in relation to accounts, and in particular the provisions of the Sixth Schedule. If at any time in the future it is considered desirable, after consultation with the professional bodies concerned, to make any changes in this respect, there should be no difficulty in taking the appropriate action.
In so far as insurance companies are concerned, the position after the enactment of this legislation will, I think, be regarded by them as rather unsatisfactory, inasmuch as their statutory accounting obligations will be dealt with by two seperate, though related, branches of the law—the Insurance Acts and the Companies Acts. I do not think there is anything we can do just at the moment to rectify this difficulty as it is very desirable that, in so far as accounts are concerned, they should receive treatment similar to that of their British competitors, and I have little doubt that the companies agree with this view. It is my intention, however, to give some further thought to this matter and it may be possible before very long to bring all the accounting requirements relating to such companies together either in the Insurance Acts or in the Companies Acts. There are ample powers to make the necessary Orders under both sets of legislation.
Some important changes are also being made in regard to the winding up of companies. Deputies are probably aware that the law in relation to voluntary winding up in particular, has been most unsatisfactory for many years, especially in the case of insolvent companies. There have been quite a number of cases in which due regard was not had to the legitimate interests of the creditors of such companies and the winding up was conducted as if it were the concern only of the shareholders. As the law stands at present, the members of a company which is being wound up voluntarily have control over the liquidation; this may be logical enough in the case of a company which is in a position to meet all its financial obligations but it is quite inequitable in cases where some creditors are likely to be left unpaid.
In order to implement some recommendations on this point by the Company Law Reform Committee, it is proposed, therefore, to provide that, in future, voluntary winding up will be divided into two classes, namely, members' voluntary winding up and creditors' voluntary winding up. If the directors of a company wish to have the liquidation carried out as a members' voluntary winding up, they must prepare a declaration that the company will be able to meet its debts in full within a period not exceeding one year. There are a number of safeguards to ensure that the procedure involving the making of this declaration is not abused. Where directors are not in a position to make this declaration, i.e. where the company is insolvent, then the liquidation must proceed as a creditors' voluntary winding up, and in that event substantial control of the proceedings passes to the creditors whose interests are to a large extent given precedence over those of the members of the company. I think Deputies will agree that the new arrangements which are proposed in Sections 257 to 273 are both fair and sensible.
Section 285 of the Bill is designed to effect some changes in the law relating to the payment of debts in a winding up, and I feel sure that the commercial community in general and small traders in particular will regard certain provisions of this Section as being most welcome. The position in regard to the priority afforded to State debts is explained in the Memorandum which has been circulated with the Bill, and may be summarised by saying that, after claims secured by fixed charges have been met, State debts have first call on the assets of a company which is being wound up. There are no consequences of any practical importance arising out of this preference in cases where the company concerned is in a position to meet all its commitments, but it operates most harshly where the company is insolvent. In that case, the entire assets of the company may have to be set aside to meet the claims of the State and there may be nothing left to pay the debts of unsecured creditors.
Both the Bankruptcy Committee which reported in 1930 and the more recent Company Law Reform Committee were in favour of a diminution of preference in respect of State debts, on the grounds that it is most inequitable to give priority to the State, which can carry on without difficulty if its claims are not met, over a small trader who may be placed in a very serious predicament by failure to secure payment for his debts. Section 285 provides, therefore, for the abolition of all preferences enjoyed by the State, except in relation to twelve months' assessment of taxes. The Company Law Reform Committee (but not the Bankruptcy Committee) were in favour of the abolition of the twelve months' tax preference also, but I think there is something to be said for retaining this.
As will be seen from the explanatory Memorandum, Section 285 also introduces a number of important changes to protect the interests of employees in a winding up. Insofar as arrears of pay are concerned all clerks, servants and workmen will in future be entitled to preference in respect of services for the period of four months preceding the winding up, while the existing ceilings of £50 for clerks and servants and £25 for workmen are being raised to £200 all round. These employees will also be entitled to preference for all accrued holiday pay. The existing provisions relating to preference for workmen's compensation payments are also being amended to strengthen the position of any injured workers to whom the company may have obligations. There is also an entirely new provision giving preference to amounts due from a company in respect of its liability to employees for accidents, other than liability under the Workmen's Compensation Acts.
Generally speaking, it is in the course of winding up a company that most offences by fraudulent directors and promoters come to light. The existing provisions for the prosecution and punishment of such persons are unsatisfactory and this situation is now being rectified. Section 293 of the Bill contains a long list of actions which will in future be regarded as misdemeanours and sets out substantial penalties by way of fine and imprisonment. This section in effect applies the same provisions to the winding up of companies as are applied by the Debtors Act (Ireland), 1872, to the bankruptcy of individuals. Section 245 incorporates a number of improvements which will render more effective the powers of the Court to examine suspect persons.
Further new provisions to deal with offences coming to light during winding up are set out in Sections 295, 296, 297 and 299; the object of all these provisions is to ensure that wherever possible, persons who have acted dishonestly will not go unpunished. These provisions should not cause any difficulty for upright directors and promoters, but I hope that they will be an effective deterrent to fraudulent activities by unscrupulous persons. In order to provide further safeguards for both the shareholders and creditors of companies changes are also being introduced in Sections 286, 288, and 289, to deal with fraudulent preferences.
As Deputies are probably aware, about 95 per cent. of the companies registered in this country are private. Because of the nature of their constitution, and the way in which their internal affairs are regulated, it is sometimes possible for the majority of the shareholders in such companies to act unfairly towards the minority. The Company Law Reform Committee referred to practices of this kind in paragraphs 123 and 124 of their Report, and as the existing remedies are not effective, they recommended the enactment of special provisions designed to protect minorities from ill-treatment of this kind. Rather elaborate provisions to this end are set out in Section 205 of the Bill. It will be noted that no attempt was made to specify the type of activity which is to be regarded as unfair or oppressive; I consider it preferable that the Courts should be allowed to exercise the widest discretion in this matter both as regards the determination of what falls within the Section and as regards the prescription of remedies.
There are a number of other provisions also in the Bill designed to protect minority shareholders. Section 166 enables the Minister for Industry and Commerce to appoint an inspector to carry out an investigation into the affairs of a company if he is satisfied that any of the shareholders are being oppressed, and Section 170 empowers him to petition the Court either for a winding up order or an oppression order if the report of the inspector indicates that the suspicions were well founded. In Section 213 it is provided that a company may be wound up compulsorily if the Court is satisfied that there is oppression. I should like to mention in this connection that a petition for winding up on this ground, and also a petition for an order under Section 205, may be submitted not only by members of a company but also by personal representatives, trustees, or persons who are beneficially interested in shares by virtue of a will or intestacy. The reason why special provision is made for such persons is that most cases of oppression arise where a shareholder dies and the directors are not prepared to act fairly and equitably towards those persons who become entitled to the shares. A further provision of the Bill which is of interest in this connection is Section 78, the purpose of which is to protect shareholders against any unfair variation in their rights. Under this section also the court is given the widest powers to deal with whatever situation may be presented to it. Any variation of rights which the court feels is unfairly prejudicial to the interests of any shareholders may be set aside by it.
Prospectuses inviting members of the public to subscribe for securities are not commonly issued in this country, for the reason that only public companies, of which there are comparatively few registered here, may finance their activities in this way. It has been considered desirable, nevertheless, to review the law relating to prospectuses and similar documents, and a number of changes, having as their object the protection of the public, have been provided for in Sections 43 to 58 inclusive. In drawing up these provisions I have had to ensure, first of all, that adequate protection for prospective investors was provided, but care was also taken not to impose any unreasonable burdens on companies which might hamper them in their lawful activity of seeking finance from the public. It would be possible to introduce all sorts of onerous requirements in connection with the contents of prospectuses, but I feel sure that in this Bill we have gone far enough.
Strangely enough, there are at present no provisions in the Companies Acts insofar as prospectuses of foreign companies are concerned. This omission is now being rectified by Part XII of the Bill which deals with the prospectuses of such companies whether or not they have established places of business in this State. The requirements in relation to such prospectuses are much the same as those which are applicable to the prospectuses of Irish companies.
Every company is owned by its shareholders and the directors merely act as stewards of the business on their behalf. It has, therefore, been the practice for very many years to include in the Companies Acts various provisions designed to facilitate the coming together of the general body of proprietors for the purpose of reviewing the company's affairs. Insofar as the present Bill is concerned the relevant provisions are set out in Sections 131 to 146 inclusive, and these represent a considerable elaboration and improvement on the existing law.
One of the principal changes which is being made is in regard to the length of notice which must be given for calling meetings, which is dealt with by Section 133. The object of the new requirements is to ensure that any member who might wish to attend a meeting or to appoint a proxy will have reasonable notice thereof and will, therefore, be in a better position to make the necessary arrangements. Important changes are also being made in Section 136, in regard to the appointment of proxies and, generally, that section implements the recommendations of the Company Law Reform Committee. If a member cannot attend personally at a meeting it is only right that he should have the power to appoint another person to represent him and to speak and vote on his behalf. Section 136 contains suitable provisions to this end. A further change which is being made is that the existing provisions in relation to extraordinary resolutions are being discontinued. In future there will be only two types of resolution, viz. ordinary and special. Section 141 provides that any references to extraordinary resolutions contained in existing Acts and other documents shall be deemed to be references to special resolutions.
Further changes designed to protect shareholders and other persons have been made in Sections 165 to 173 which relate to the appointment of inspectors to investigate the affairs of companies. I have already made a reference to some of these changes in my earlier remarks about the protection of minorities. However, I should like to emphasise that my policy in regard to the utilisation of these powers of inspection will remain much the same as it has always been with successive Ministers of my Department. The appointment of an inspector to investigate the affairs of a company is of its very nature something which cannot be kept secret and as soon as it becomes public knowledge some damage is inevitably done to the commercial reputation of the company in question, even if it is subsequently found that there was nothing amiss. In the past it has always been the practice in considering applications for the appointment of Inspectors to bear this point particularly in mind, and, so far as I myself am concerned at any rate, there will be no change in this respect in the future.
In the Companies Act, 1959, provisions were for the first time introduced in our law to enable companies to issue redeemable preference shares. During the passing of that measure through the Oireachtas, the suggestion was put forward that companies should also be given the right to attach redeemable rights to shares which had been issued as irredeemable preference shares, subject, of course, to the appropriate consent of the members of the company and of the shareholders of the class concerned. I undertook to give some thought to this idea, and if it were found practicable to devise a workable formula, to introduce a suitable provision in the Bill which is now before the House. This matter has been given the most careful consideration, and I think that Section 65 of the Bill can be regarded as meeting all reasonable requirements in this respect.
It would be rather dangerous to provide unduly wide powers to convert shares in this manner to all companies, and it is for that reason that the section is hedged about by a number of safeguards designed to prevent abuses. In the first place, it will be noted that the section is confined to public companies. The possibilities of abuse are, I am afraid, too great to permit of the extension of the concession to private companies, where it could be manipulated fairly easily by unscrupulous persons to their own profit with little or no danger of public comment. Secondly, the section applies only to preference shares which were issued before the 5th May, 1959; the reason for this is that as from the date in question it was permissible under the Companies Act, for any company limited by shares to issue redeemable preference shares, and there could, therefore, be little justification for allowing them to convert preference shares issued after that date in irredeemable form. Thirdly, it is provided that nothing in Section 65 will oblige any shareholder to accept redemption of his shares. It may well be, of course, that the terms on which a shareholder accepted his shares oblige him to be bound by the decision of a certain majority of his fellow shareholders and any provisions of that kind will continue to operate. I understand that there may well be cases where the redemption of preference shares under the provisions of this section would be a happy release for the shareholders concerned provided the transaction can be arranged on acceptable terms, and for that reason I feel sure that its enactment will be generally welcome.
The interests of shareholders may be adversely affected by unreasonable or reckless actions on the part of a company's officers in connection with the transfer of shares. A number of provisions are being introduced in Part III to provide additional protection for shareholders in this field. Examples of such provisions are Section 84 which obliges a company to give notice of refusal to register a transfer within two months after lodgment, and Section 85 which imposes certain obligations on a company in connection with the certification of transfers. I might also refer to Section 86 which requires a company to complete and have ready for delivery the certificates of securities within two months after lodgment of the transfer documents; under the existing law the period of two months runs from the date of registration of the transfer, which might not, of course, be effected for a considerable time after lodgment.
On this subject of the registration of shares I would like also to refer to Section 80 which discharges companies in certain circumstances, form the obligation to number shares. I feel sure that this concession, which was recommended by the Company Law Reform Committee, will be very welcome to the commercial community. A general dispensation as regards numbering cannot, however, be given as the interests of shareholders demand that shares should be readily distinguishable from one another in cases where they are not fully paid up or do not rankpari passu for all purposes.
Quite a number of new provisions are being introduced in the Bill in connection with directors. There is, at present, no obligation on any company to have directors and this is now being rectified by Section 174, which requires that every company must have at least two. As every company must have not less than two members, this requirement should not cause any problem; it is desirable in any event that a specific obligation of this kind should be imposed since the directors of a company are charged with numerous responsibilities under the Bill. For that reason also it is desirable that the directors of a company should be physical persons, and Section 176 provides therefore that a body corporate may not in future be a director; companies which at present have bodies corporate acting in the capacity of directors are being given a period of three months to replace them by physical persons.
A number of provisions are also included in the Bill with the object of bringing the activities of directors more closely under the control of the shareholders; for example, Section 181 requires that the appointment of directors must be voted on individually, while Section 182 will make it easier in future for shareholders to dispense with the services of any director with whom they are not satisfied before the expiry of his period of office.
Sections 186, 187 and 188 contain provisions requiring shareholders' consent for payments to directors for loss of office in connection with the take-over of the shares or business of a company. There is also in Section 185 a prohibition on tax-free payments to directors, while Sections 191 and 192 require that particulars of directors' salaries, loans and other payments, must be shown in the annual accounts.
There has been a good deal of comment in recent years about the rights and duties of directors in relation to their companies and it has been suggested that these rights and duties might be set out in some detail in the Companies Acts. I have come to the conclusion that it would be extremely difficult to draw up any general provisions of this kind which would be suitable for application to all companies and I think that sufficient guidance in these matters is provided by case law rather than by statutory enactment. I think it is desirable, however, to enact provisions designed to bring to the light of day dealings by directors in the shares of their companies, and also their interests in contracts which their companies enter into with other parties; suitable provisions to this end are included in Sections 190 and 194.
Since a director is, as a general rule, appointed by the shareholders, it is desirable that the assignment by him of his office to another person should be subject to control, and Section 191 deals with this matter. Section 200 is designed to ensure that directors and other officers of a company will be answerable to shareholders for neglect of their duties and cannot disclaim responsibility by virtue of unreasonable escape clauses contained in articles of association or other documents.
Two further provisions of interest under the heading of directors are Sections 183 and 184; the former contains a prohibition on undischarged bankrupts acting as directors, while the latter enables the Court to restrain persons convicted of certain offences from acting as directors.
In the Companies Act, 1959, a provision was introduced with the object of facilitating mergers which had the approval of the vast majority of the shareholders concerned and which might fall through because of the intransigence of a small minority. Although I have had no complaints about the manner in which this section has worked in practice, it has been found on re-examination that it could, perhaps, be drafted in more precise terms. The more elaborate provisions are now contained in Section 204 of this Bill and I feel sure that this will meet all reasonable requirements, providing as it does suitable facilities for the acquisition of the shares of dissentients and at the same time giving those persons adequate protection against abuses.
In Part VII of the Bill a number of new provisions are being introduced in connection with receivers. The object of these is to protect the members of the company in respect of which a receiver is appointed, and to safeguard the interests of its creditors and other persons doing business with it. A number of clauses to assist receivers in dealing with certain difficulties which may arise for them are also included.
Part IV of the Bill continues, in improved form, the provisions of the existing law relating to the registration of charges. The object of these requirements is to ensure that persons doing business with a company will have a readily available means of ascertaining how far its assets have been charged as security for debts. Apart from the additional obligations now being imposed on Irish companies in this respect, foreign companies having places of business here are now, for the first time, being bound by these requirements as to registration of charges.
Now that we are imposing rather comprehensive obligations on companies in the matter of accounts, it is important to ensure that the law in regard to auditing is satisfactory. It would, I think, be quite illogical to enact all these detailed requirements about the contents of accounts and at the same time to allow any person, no matter how much or how little he knows about accountancy, to act as auditor. In Section 162 of the Bill it is proposed, therefore, to provide that, subject to certain exceptions, only persons having recognised professional qualifications can audit the accounts of companies.
Other provisions of the Bill to which I would like to make some reference are Section 8—modification ofultra vires rule—Section 10—altering the objects of a company—Section 22— trading under names other than corporate names—Section 37—pre-incorporation contracts—Section 62—share premiums—and Section 63—issue of shares at a discount. It is not necessary for me to go into any detail about these matters but I would draw the attention of Deputies to the relevant notes in the explanatory memorandum.
I feel sure that some Deputies will have views to offer on the question of requiring disclosure of beneficial ownership of shares. A requirement of this kind, but of rather limited application, was recommended by the recent Committee of Inquiry in Britain. In so far as we are concerned, however, I am satisfied that no provisions of this nature are required. The Company Law Reform Committee examined this matter in some detail in paragraphs 103 to 108 of their report and came to the conclusion that such provisions, however carefully drafted, would be easy to evade. They pointed out in any event that in the great majority of cases in this country shares are registered in the names of nominees for legitimate commercial reasons.
As Deputies will see from page 6 of the explanatory memorandum, it is not proposed to accept the recommendation of the Company Law Reform Committee that the issue of shares of no par value should be permitted in this country. There does not seem to be any general demand for the legalisation of such shares, and as far as I can see the question has been given more importance than it deserves. I have noticed that the most recent Committee of Enquiry in Britain has recommended that provisions should be enacted permitting the issue of shares of no par value in that country.
I see no reason, however, to follow suit here as there is no evidence that those concerned with the administration of company affairs would wish to see a change of this kind effected, nor is there any reason to believe that any difficulties which may arise for investors in connection with the present system of nominal value shares would thereby be eliminated. I should like to make it clear, however, that if at any stage it becomes clear that it would be desirable to amend the law in this respect, I would be prepared to seek the Government's approval for the introduction of the necessary legislation. Amendments to legislation other than the Companies Acts would, probably, also be required.
Deputies may also wish to know why we have no legislative provisions dealing with unit trusts. Some years ago an inter-departmental working party looked into this question of unit trusts and found that there was no need for legislation to control the activities of promoters of this investment medium. In fact, no Irish unit trust has, to my knowledge, been established and so far as foreign trusts are concerned. I have had no complaints about their rather limited operations here. It may also be asked why we have no legislation specifically dealing with "share-pushing" such as that which has been passed in neighbouring countries. The fact is that we have had very little trouble from share pushers in this country and controlling legislation is not called for. It is probable that a recent case in which very large amounts of money were involved will spring to the minds of Deputies, but I should like to point out that branches of the law other than the Companies Acts were primarily concerned in that case.
There would, of course, be little point in imposing obligations on companies and their officers unless suitable provision were made for the prosecution of offenders. A good deal of attention has been given to this matter and a number of new provisions designed to facilitate prosecutions are included in Part XV. I should like to refer in particular to Section 385 which will remove certain difficulties which have arisen in the past in connection with summary proceedings; it is not always possible to bring proceedings within six months after the commission of an offence as the law at present requires and for that reason a period of three years is now being provided for. Section 386 provides for a minimum fine for second or subsequent offences, and its principal purpose is to deal with persons who have been in persistent default of their obligations under the Companies Acts.
I think it is undesirable that persons who are guilty of offences under this branch of the law should have the protection of the Probation of Offenders Act, and accordingly, Section 387 excludes such offences from the scope of that Act. There is also a very useful provision in Section 384 which will make it easier for the police to procure evidence of offences from the books of a company where suspicions have been aroused. Section 382 is also of some interest; the existing law does not contain any suitable provision for the prosecution of companies on indictment and this omission is now being rectified.
Apart from these special provisions under the heading of "Offences", I should like to point out that particular attention was paid to the insertion of suitable penalty clauses in the appropriate sections throughout this Bill. Entirely new penalties were provided for where none existed up to this, while in other cases the penalties by way of fine or imprisonment set out in the existing Acts were substantially increased wherever the nature of the offence seemed to require it.
On this question of offences, I should like to advert to the recommendations of the Company Law Reform Committee that the enforcement of the requirements of the Companies Acts should be regarded as a matter of major importance. As the Committee pointed out, incorporation under the Companies Acts is a privilege, and the terms on which it is granted should be observed. I should like to avail of this opportunity to make it clear that I accept the Committee's recommendation unreservedly, and that, to the extent which our resources permit, steps will be taken to ensure that the requirements of the law are complied with, and that offenders are punished.
The Bill is, of course, a consolidation as well as an amending measure and it contains many provisions which simply repeat existing requirements with little or no change. I think it unnecessary to make any reference to the sections which come within this category but I would like to assure the House that all the provisions of the Bill, both new and old, have been the subject of the most careful consideration. It is more than 50 years since the last major Companies Act became law. It would probably be too much to expect that anything we enact now will give such long service but I am confident that the present Bill will meet our needs for a considerable time to come and that it is well deserving of the support of the House.
I might point out, in conclusion, that as I mentioned earlier, this is probably the biggest Bill ever to be introduced in the Oireachtas and therefore, not simply because of that but because of its very nature, it might be better to refer the Committee Stage to a Special Committee. I am in the hands of the House in that respect. If the House agrees, I will move the necessary motion at the appropriate time.