Companies Bill 2012: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

I welcome this Bill, whose intention is to make it easier for companies and people to set up businesses. It also provides solutions to the many difficulties currently encountered, such as the weakness and lack of vision evident in existing legislation. I would like to acknowledge the companies that are doing well and providing worthwhile employment in my home county for many people. I would like to see more companies come to the midlands and particularly to Longford and Westmeath.

Every day, businesses and companies are being driven out of business here due to the excess of bureaucracy and red tape and the failure of the previous Government to change things during its 20 years or so in office. The Bill before us today outlines a process that will help us move forward by cutting down on costs, waste and inefficiency. This will favour the development of businesses. The Bill is a common-sense revolution of company law that will help cut the cost of starting a company and will help make this country the best small country in which to do business. It deals with issues to do with the creation and development of jobs and also aims to create companies that are more focused on output, performance and a strong culture of service. The changes proposed in this Bill will give companies the ability to handle the daily challenges with less red tape and will make company law obligations easier to understand. This landmark course of action will bring significant benefits to businesses and companies of all types throughout the State.

The Government, since taking office, has had a clear and credible jobs plan, but it must be spread evenly throughout the country. Longford-Westmeath, although perfectly situated in the centre of the country, with equal access to east and west, is losing out on major international investment due to the state of its infrastructure, to the detriment of its economic development. There is a moral obligation on the State to ensure that the midlands area gets employment opportunities, just like the east and west coast and our cities. It is imperative that additional incentives and funding are put in place to encourage indigenous industry in the area.

This is important legislation and is necessary in order to increase employment opportunities in the business sector. It is the key to supporting and giving Irish companies a competitive advantage. It will also open up the way companies do business and make them more accountable.

We are fortunate that the Government has been able to assemble an economic team under the chairmanship of the Taoiseach. The team is flexible and highly committed to the development of a jobs economy. I understand that staff supporting this team work until 10 p.m. or 11 p.m. without being asked, which demonstrates huge commitment. This level of commitment is important for the Government to succeed and it also demonstrates that morale among staff is very high. People co-operate and support each other as in a well-functioning family. We are living in interesting and exciting times and this motivates people. I am aware that in the long term tensions and problems will occur unless we change and update company law to address issues and ensure that proper procedures are established.

A striking feature over the past 18 months or so has been the number of foreign companies establishing their European headquarters in Ireland. I found it a moving experience recently to visit Capitol Hill and be told that our new Government is getting things right and is moving in the right direction and that, as a result, more American companies will be seeking to invest in Ireland. That is a good news story. It drove the message home to me that it is now more important than ever for us as a nation to be able to create the climate and conditions necessary for investment and to improve on what we have, such as our 12.5% rate of corporation tax. We should ensure there will be no tax increases in selected areas so that there is a minimal impact on jobs.

In a modern economy it is important that the boundaries of company guidelines keep moving all the time. In recent years, for example, the Government has increasingly considered education in economic terms.

It has put forward the idea that the primary purpose of education is to produce one of the community's most valuable economic assets - a competent, educated and adaptable workforce. To an increasing extent, school policy is being considered as a facet of economic policy. This was reflected in the most recent renaming of what used to be the Department of Education as the Department of Education and Skills. The same thing can be seen in the naming of the Department of Jobs, Enterprise and Innovation.

One of the primary features of company and economic policy is that it has wide and constantly changing boundaries. Indeed, the machinery of economic policy will be able to steer the economy towards jobs as a result of this change in company law. Economic freedom - the freedom to be able to buy, sell and employ - is the foundation of all freedom. This is particularly important for companies. To that end, this Bill cuts out the nonsense and allows businesses to use their energy and ingenuity to meet the needs of customers who will create prosperity. When companies and markets are allowed to work properly, they benefit everyone. Too much regulation destroys freedom and efficiency, just as too much red tape controls and squeezes companies. This has harmful effects on employment. The cost of starting a company will be cut considerably as a result of this reform of company law. By strengthening best practice in small business, we can show investors that Ireland is the best small country in which to do business. When this landmark Bill becomes law and other supports are put in place, people will be enthusiastic about setting up businesses. Many quality projects will be very useful as we grow our economy and create jobs.

At a time when the effectiveness of international development law is being more critically scrutinised, it is important that we move forward with 21st century company law. As I said earlier, it is encouraging that international companies have continued to develop and set up here in recent years, despite the regular problems with communications and broadband in this country. We need to deal with such problems on an ongoing basis. This legislation is a prerequisite to sustainable development for small businesses, which are contributing millions to the growth of the economy. It is about enabling companies to become what they wish to be. We are trying to strike a balance by taking away a great deal of expensive baggage and replacing it with measured pragmatism. The jobs and mortgage crisis is the greatest challenge facing our people because of the social misery it is causing. We cannot allow the emigration of mostly young and well-educated people to be a permanent feature of Irish life. If we are to stop it, we have to get the economy growing. The billions of euro pumped into the banks by the previous Government were mentioned on Leaders' Questions. If we had that money now, we could pump it into jobs.

We need to reform the scandalous upward-only rent review system and the penal rates regime, both of which are costing thousands of retail jobs throughout the country. One has to go no further than the midlands to see how businesses in our towns are being affected. We need to reform the upward-only rent review system that applies to commercial property by giving tenants the right to have commercial rents reviewed regardless of any upward-only or other review clause. A commitment to do so is in the programme for Government. It must be acted on before it is too late. The retail industry has lost thousands of jobs in the past five years. The maintenance of the upward-only rent review system will increase this number greatly. There is clear evidence in every part of the country - we witnessed it in the courts recently - that some landlords have no interest in reducing costs. There have been limited rent reductions of a few percentage points in recent years, at a time when sales have been decreasing by between 25% and 33%. We must take action in this area immediately. We cannot stand idly by and continue to allow what used to be one of Ireland's largest industries go further down the tubes.

I welcome the Minister of State with responsibility for small business, Deputy Perry, to the Chamber. I hope he is taking note of what I am saying. I ask him to examine what is happening in town centres across the country. As we welcome this Bill, we need to work hard to find solutions to these issues. We cannot ignore what has happened and is continuing to happen to our rural towns and villages. They are haunted by the substantial volume of ill-thought-out legislation that has been enacted. A hackney service needs to be provided in every small town and village in the country. As several Deputies have said, rural Ireland is dying on its feet. We urgently need local enterprises in our villages and small towns. By shopping locally, we can ensure local businesses thrive and local jobs are retained. It has never been more important to keep our shopping local. I have referred to this issue time and again in the House. We need to bring a new spirit to our rural towns and communities. In hard times, people need to stick together by looking out for their own and for one another. This means thinking about the community in which we live.

This Bill represents a new start. It sets out a series of simple procedural measures and landmark changes. It should improve company law in the best interests of the public. It will encourage entrepreneurs to explore new business ideas, invest and take risks. One of the functions of the Bill is to support new business by encouraging people to take the brave step of starting a new company. It will also encourage people to invest in existing businesses so that they grow. We have put actions and stimulus plans in place for the microbusiness sector. We have offered financial supports through the seed capital scheme to those who are starting their own businesses. Those who start their own companies and work full-time in them can claim back the income tax they paid for the previous six years in order to invest equity in their companies, as long as those companies are involved in a qualifying trade. The three-year corporate tax exemption scheme provides relief from corporation tax on the trading incomes and certain gains of new start-up companies in their first three years of trading.

Many of the schemes that help people to develop their businesses will be helped by elements of this legislation. The research and development tax credit, for example, is a valuable tax-based incentive that is designed to encourage investment in research and development by companies in Ireland. A 25% tax credit for qualifying research and development expenditure is available to companies that are engaged in qualifying research and development. The accelerated capital allowance scheme allows companies to write off 100% of the purchase value of qualifying energy-efficient equipment against their profits in the year of purchase. A person who owns or manages a small limited company and who wants to explore a business opportunity can apply for an innovation voucher worth €5,000, which is a great deal of money these days.

All of these incentives will encourage people to set up in business and this reform of the companies Bill favours the development of business going forward. We have to be positive and sell the advantages of this country abroad. I have said in the past we should be tapping into our ambassadors and other personnel working outside Ireland to try to keep at the top of the agenda that Ireland is open for business.

This is a ground-breaking Bill and, hopefully, it will meet expectations. As I said, Ireland is the best small country in which to do business and long may it remain so. There are a number of important changes in the Bill. It will mean that many of the 12,500 private companies limited by shares which are established every year will be able to incorporate more easily, resulting in average savings of €1,300 to €1,400 in professional fees in each case and leading to many improvements in the ease of doing business in Ireland by comparison to our competitors.

The Bill consolidates the existing 16 Companies Acts, which date from 1963 to 2012, into one Act and it also introduces a number of reforms which are designed to make it easier to operate a company in Ireland. Set out across 25 Parts to ease the accessibility of the law for each different company type, the Bill contains 1,429 sections and 17 Schedules. For private companies limited by shares, the Bill contains a number of significant reforms. It will now be possible for such a company to have only one director and there will no longer be a requirement to have a second director merely to comply with a requirement of the law. The company will be permitted to have a one-document constitution. Mr. Albert Reynolds, the former Taoiseach from my constituency, always said he liked a one-page document.

The Deputy likes quoting him.

The requirement under the current law for every company to draft detailed articles of association will no longer apply. Instead, the Bill will contain provisions which will apply by default unless a company wishes to vary any of these provisions.

All in all, it is a very good Bill. It will accommodate the most common company type in Ireland, the private company limited by shares, which will now, for the first time in Irish company law, be placed at the centre of the legislation. All of the law which applies to this company type, which represents approximately 90% of all companies registered at the Companies Registration Office, will now be contained together in Parts 1 to 15, inclusive, of the Bill. This law will be set out logically to follow the life-cycle of a company, starting with the provisions governing incorporation. The Bill is about cutting costs, waste and inefficiency, which will favour the development of business. As I said at the outset, it is a commonsense revolution and very important to us all going forward.

I hope the Minister will take note that we badly need jobs in the midlands, which is a region that is open for business. I was very disappointed when it was pointed out recently that the IDA brought no foreign investors to Longford in the past eight years. I would appreciate it if the Minister would look into this and see that this type of behaviour changes. Longford is a great place to work and any of the companies which operate there and have branches elsewhere claim that Longford is the supreme location for their staff and workforce.

I welcome the opportunity to speak on the Bill. I am pleased that Deputy Bannon sees fit to recognise the talents of Mr. Albert Reynolds, the great former Taoiseach from Longford-Westmeath.

One would want to be here a long time to deal with all aspects of the Bill. It is 1,136 pages long and its organisation has been ongoing for the past 12 years. I understand the last time changes were brought about in this way was when Mr. Seán Lemass was Minister, which is a long time ago. Obviously, therefore, the companies legislation was due to be brought into the modern era in order to bring about change. We have had the reports and recommendations of the tribunals in recent years and I hope many of those recommendations are enshrined in the Bill.

The Bill is one thing and its implementation is another. How it will impact on companies for the future is very important. We have had many company failures in recent years and I wonder what the Bill will do for companies in trouble. For the fifth year in succession, there has been a rise in the number of company failures, with 1,684 having collapsed during 2012 according to figures compiled in Kavanagh Fennell's Insolvency Journal. A notable feature was the dramatic increase in corporate receiverships. If someone had said to me a couple of years ago that A-Wear, Greenstar or Lyrath Estate in Kilkenny would be going into receivership, we would all have been shocked. I wonder what the Bill will do for such companies into the future.

A growing number of companies turned to examinership last year, including Atlantic Homecare, Cappoquin Poultry and the Ritz-Carlton Hotel, which were some of the high profile applicants among 27 or 28 such applications. I believe examinership is a far better way to proceed than receivership. When a matter goes to the courts, for judges to make a decision on receivership is far too easy, whereas if a company is put into examinership, the company might be saved. We have seen situations where examiners were appointed and companies were able to trade back out of their situation with the support and help of the examinership. In a recent case, Mr. Bill Cullen's hotel in Kerry was in receivership, it was then put into examinership and the judge then decided he would put it back into receivership. It is quite obvious there are problems in this area. I feel examinership should be the way to proceed and receivership should be the last resort.

There are many reasons companies collapse. Deputy Bannon referred to some of these, including the high rates being charged by local authorities, upward-only rents, service charges, water charges and planning charges. When retailers decide to upgrade their stores and apply for planning permission, the planning application is straightaway sent to the Valuation Office in Dublin. It sends its officials to the store and, sure as hell, the size of the store and so on will be changed and the rates will go through the roof. Therefore, there is no incentive for people to develop, expand and upgrade their businesses because they must straightaway pay a rates increase.

There is also the question of exorbitant legal fees, which increased rather than reduced during the recession.

Legal fees are huge and one must then face planning charges. Companies apply for permission to extend or expand and local authorities levy exorbitant planning charges on them. They will charge them for roads and water and levy community charges and every other possible charge to get money. This is an impediment to the creation of jobs. It is important that these areas are looked at also. I know the Minister of State has been working with small and medium-sized businesses up and down the country to see how they can be protected and saved, but all the charges mentioned are major impediments to companies, large and small, in surviving. The charges applied by local authorities to businesses are completely out of kilter with what they can afford to pay. These charges were grand during the Celtic tiger era, but we still see the same charges being levied on businesses, even though they are put to the pin of their collar to survive. I have raised this matter a number of times with my local authority which has told me that it is reviewing the county development plan and that when it is completed, it might then be in a position to look at the issue of charges. For many businesses, waiting for the county development plan in every county to be reviewed and changed will take too long and they will go out of business in the meantime. The Minister of State should work with local authorities to substantially reduce these charges in line with the current position rather than what it was in 1996 and 1997 when major money was being made. It is not being made today.

The Bill is a step in the right direction and the Minister has put much time and thought into it. It was initiated when we were in government. As we initiated it, we cannot criticise it too much, but it has taken a long time to get to this stage. I often wonder why it took the best part of 12 years and about six Ministers to bring it to do so, given the personnel available in the Department. The last major tidying up exercise in company law was undertaken by the then Minister for Industry and Commerce, Jack Lynch, in 1963.

It is very important that the legislation is clear and accessible. The company law reform group, CLRG, has pointed out that company law reform has often been driven by the need to comply with EU directives and regulations. I am sure this issue has exercised the minds of many Ministers in recent years. The European Union makes regulations and directives that must be transposed into Irish law. Sometimes the regulations and directives issued from Brussels bear no resemblance to how companies operate in this country and are out of touch with what is happening in the real world. Their implementation certainly causes major problems for companies.

The company law reform group made a number of recommendations. The aim was to simplify the Companies Act, bring greater clarity and transparency to the companies code and increase its intelligibility to the businessperson. In making a proposal for simplification, the CLRG recommended an increased focus on the needs of the small private limited company. In this respect, it fully endorses the "think small first" approach favoured by the English company law review steering group. The three principles to be followed are that the law should be clear and accessible; that accuracy and certainty should not be sacrificed unduly in an attempt to make the law superficially more accessible; and that the legislation should be structured in such a way that the provisions that apply to small companies are easily identifiable.

Many small companies believe they were left out by this and previous Governments and that we seem hell-bent on looking after the larger companies, such as pharmaceutical companies, locating here. These companies create many jobs, which is good in itself, but many smaller companies believe they are not receiving the same service and support from the Government, the banks, legislators and other bodies that could be of major support to them. Deputy James Bannon spoke about IDA Ireland and Enterprise Ireland. In Wexford we believe Enterprise Ireland and IDA Ireland have not been very supportive or helpful during the years. There have been a few announcements in recent years, but we have not received our fair share of visits in the past 15 or 20 years. We certainly have not received our fair share of job announcements. We have heard today that Ebay will be locating outside Dublin in Drogheda. All of the major companies coming into the country seem to want to centre their operations in the cities - Limerick, Galway, Cork and Dublin. It seems it is very difficult to get them to set up in counties such as Wexford which has the necessary infrastructure - the port of Rosslare, as well as roads, sewerage and water facilities. For years IDA Ireland and Enterprise Ireland told us we did not have the necessary infrastructure, but now when we do have it, we are still not getting our fair share. It is important that some of the good companies, as we call them - pharmaceutical companies and the likes of Intel and Ebay - are not placed close to the cities but that IDA Ireland and Enterprise Ireland encourage them to locate in rural counties which can offer services and locations equally as good as those on offer in the cities.

I welcome the Bill, which is essential. The questions of how it will be implemented, the wherewithal to do so, the financial package to back it up and the staff that should be available through the different arms of government are very important. In general, the Bill is good in itself, but it will only be as good as the manner in which it is implemented and the support and help given to companies that want to stay in the country, expand and develop. Many of the roadblocks I mentioned need to be dealt with. I hope the Bill will go some way towards achieving this. However, I have my doubts about whether it will deal with some of the issues I have raised because all of the agencies of State, including the Department of the Environment, Community and Local Government, the local authorities, Enterprise Ireland, IDA Ireland and the EPA, are not overly helpful when it comes to supporting industry. It is very important that the Minister of State lead and drive and, in particular, takes up with the local authorities the issue of charges which is an impediment to companies setting up not only in my county but also in every other county.

I call Deputy Brendan Ryan who I understand is sharing time with Deputy Tom Hayes.

I welcome the opportunity to speak on the Bill and welcome its broad thrust. It is an administrative and housekeeping Bill rather than radical legislation aimed at improving our competitive position as a location for business investment. It is welcome that for the first time in the State's history the most common form of company, the private limited company, has been placed at the centre of company legislation and given primacy. There are numerous simplifications and benefits within the Bill which will aid the limited company in starting off and continuing in business. Basic measures such as single directorships and single document constitutions are simple changes but ones which will have a practical and positive impact on business start-ups.

I have dealt with numerous constituents in the past couple of years who have good business plans but are faced with masses of prohibitive red tape from the outset. The Bill goes a way towards reducing some of that red tape, which is welcome. There is an oft-quoted line from Cabinet members that Ireland should be the best small country in the world in which to do business.

I support this aim. However, I wish to add that Ireland also needs to be the best small country in the world in which to be a worker. At the moment this is not the case. The implosion of the Irish economy for reasons we all know, has seen our live register figure climb to more than 440,000 people who are unemployed, underemployed or poorly employed. The live register figure is beginning to tick down and is now at 426,000. However, this needs to become a real trend and that trend needs to continue at a more rapid pace.

This Bill is geared towards streamlining company law in order to make it easier for companies to be established and to do business. I welcome any moves which will encourage companies to set up in Ireland - be they indigenous or foreign multinationals - and which will create and sustain employment. I firmly believe there is only one way out of the economic situation and that is through job creation and retention. Job creation will reduce the burden on the Department of Social Protection, allowing the Minister, Deputy Burton, to further target supports at those who most need it. Job creation will help alleviate the mortgage arrears crisis, allowing families to service their mortgages and to put their household budgets back on track. Job creation will bring in employers' PRSI, employees' PRSI and income tax, all of which will improve the State's coffers. The Government has introduced and supported a range of job creation measures which are helping small, medium and large companies to create employment.

Budget 2013 contained measures to enable the delivery of supports for companies in need of credit. Scarce public resources were used to leverage funding from the private sector to provide credit for businesses. Measures include the seed and venture capital scheme, the development capital scheme, research and development tax credits and an increase in the lending targets of the two pillar banks for 2013. More recently, the Minister, Deputy Joan Burton has announced details of the new JobsPlus scheme which is focused on the long-term unemployed and provides a cash-flow benefit to businesses which hire jobseekers who have been on the live register for 12 months or more. In addition, the back to work allowance scheme, JobBridge, the launch of Intreo and the rolling out of the pathways to work strategy, are the practical measures being introduced by the Minister and the Government to help people rebound into the jobs market.

In difficult times and with limited resources, the Government has put in place a range of practical measures to aid businesses. The collective purpose of all these State support measures is to create jobs. They are not designed to make it easier for businesses to run shaky concerns, to deprioritise their commitments to State charges such as commercial rates or indeed practise poor or immoral corporate governance. The example this week of the remuneration levels for the chief executive officer of Ireland was a slap in the face to the Irish people and should not act as an example of how State-supported companies, be they banks or SMEs, should operate. I welcome this Bill. I hope it leads to an increase in good companies setting up and more jobs being created. It is one more step in the essential support for small business if we are to deal with the current crisis.

I welcome the opportunity to contribute to the debate on this important Bill. A change in company law has been under consideration since 2000. This Bill will allow for a company to be composed of one person. After many years of consultation and reports, the Bill is before the House for debate.

The Government has worked hard to create jobs and to encourage an atmosphere conducive to job creation. We need jobs to help economic recovery and also to provide work for the many young people leaving our colleges and to give hope to the many young people who have left our shores to look for work in other countries such as Australia, America and England.

Many rural communities in particular see the impact of emigration on their communities. I have seen at first hand the effects on small GAA clubs in rural areas which are unable to field a team because most of the senior hurlers have gone. I refer to the situation in south Tipperary whose senior hurling clubs were at one time winning the regional finals. Now those clubs have only one or two players on a subs bench. None of us can be proud of that situation which we must strive to change. This is one of the best countries in the world and we have much to be proud of. This Government wants Ireland to be the best country in the world in which to do business.

This Bill will encourage individuals to set up in business. It is one piece of the jigsaw and many other aspects of business must be considered. For example, broadband is not satisfactory in certain areas of the country. I am frustrated with announcements about the introduction of broadband and the lack of information about the broadband service. The Government has given a clear commitment that broadband will be available. However, more needs to be done to bring broadband to all parts of the country as a means of helping business enterprises.

Business people are experiencing difficulties in dealing with the banks. I remind the banks of their responsibilities. The taxpayers of Ireland has bailed them out by throwing significant funding into the banks which, as a result, have a responsibility to help the country and its people to create jobs. The banks need to be more amenable and more accessible. They should provide alternatives when they turn down loans. They should be helping people. In the past, bank managers did not work with as many rules and regulations as is the case now. I agree that rules and regulations are very necessary but, in my view, local knowledge needs to be part of how a bank decides on a loan application.

I refer to the case where a bank turned down a very well-presented plan. I asked experts to look at the plan. I know that the individual in this case would certainly repay the loan. The banks need to be more reasonable in their dealings with people. We are living in a changing world. The old manufacturing jobs are no longer here; other countries such as China have taken us on. However, the IT sector is a whole new world as is the food processing sector. The farming sector is going through a very difficult time but there is a very significant market for Irish-produced food. The recent horsemeat in burgers controversy proved that this country has good standards in food production. We must chase the market for Irish food. Small companies and businesses may have the ideas but bureaucracy is killing many enterprises. I suggest the Minister should look to the food industry to provide jobs in rural areas.

I will mention a business in my constituency which is providing IT training in the town of Cashel and which has sourced jobs for those people.

It is a very successful company whose approach we should model. The Minister for Education and Skills, Deputy Ruairí Quinn, and the Tánaiste, Deputy Eamon Gilmore, launched the project earlier this year and it is working successfully. The retraining that is available should be nurtured into the future.

As the Minister of State, Deputy John Perry, is in attendance, I must mention my constituency. There are a great number of unemployed people in south Tipperary. There is a fantastic facility in Cashel which was once occupied by Johnson & Johnson and now lies idle. I urge the Minister and Minister of State at the Department of Jobs, Enterprise and Innovation to help south Tipperary in its endeavours to get a buyer for the factory. There is a potential to create 600 to 700 jobs in Cashel and it is a project the Government should go after. It is not an advance factory; it is purpose-built to accommodate enterprises in the medical devices sector. It is constructed to the highest standards.

I welcome the fact that the Bill is before the House. I compliment the Ministers on its introduction and hope it gets through speedily. I am delighted at the all-party support there appears to be for the Bill, although there are changes that need to be made. All Members want to see small companies develop and expand and to see a removal of bureaucracy and red tape. The legislation will impact on many companies. Given that only 1% of companies registered are public limited companies, the legislation will cover and support a broad range of businesses. I thank the Leas-Cheann Comhairle for giving me the opportunity to speak.

The Bill represents a massive body of work and is to be welcomed.

I note that Part 5 of the Bill contains a codified version of the fiduciary duties of company directors, which require them to act in good faith, honestly, responsibly and with due care, skill and diligence, and to avoid conflicts of interest. Currently, directors are subject to these obligations through a combination of common law and statutory provisions. The principle effect of listing directors' duties in the Bill will be to act as a signpost to directors on the standards of conduct the law requires of them. Will the Minister consider expanding on the provisions by examining ways in which the information they contain could be widely disseminated to existing and new company directors to educate them fully on their responsibilities and, more broadly, promote a culture of corporate responsibility? The provision of a new pack setting out directors' duties could be issued by the Companies Registration Office to all directors on the incorporation of a company. It could alternatively be issued by the Office of the Director of Corporate Enforcement, which happens to have a clear text on directors' duties on its website. Those agencies could organise the distribution of a leaflet setting out the provisions of the relevant section of the Act to the registered offices of companies for the attention of all current directors.

Currently, the practice is that directors of companies with means available are advised of their duties by solicitors. However, many start-up companies do not have the means to provide such legal advice. There are also voluntary directors in the property management sector who are subject to additional requirements under the Multi-Unit Developments Act 2011 who may not have the means to seek legal advice on the duties owed by them. I would welcome the insertion in the Bill of a recognition of the general duty owed to employees and shareholders in addition to the primary duty owed to the company itself.

I welcome, broadly, the proposed reform of the examinership process. I note that in accordance with the recommendations of the Company Law Review Group, section 5(10) of the Bill will provide for small and medium enterprises to apply directly to their local circuit court for examinership where they satisfy two of the following conditions: fewer than 50 employees; a turnover of less than €8.8 million; and a balance sheet not exceeding €4.4 million. It has been estimated that the new provision could cut the legal cost of examinership by up to 50%, making the process more accessible and affordable to small and medium enterprises, in contrast to the current requirement that all companies, regardless of size, apply to the commercial courts in Dublin with the attendant cost of doing so. Protection provided by the courts from creditors' actions for three months can sometimes give enough breathing space for a company to recover and survive its difficulties. Ultimately, examinership can save valuable jobs in small and medium-sized enterprises.

While the reform is very welcome, will the Minister consider separating and fast-tracking the enactment of the relevant provisions to ensure they commence as soon as possible? The Bill may be the largest tranche of legislation ever enacted in the State, with the result that it may not be passed until 2014. Commencement of its provisions may occur at an even later date. Currently, thousands of small and medium-sized enterprises are struggling and in distress and may not survive until 2014. They would benefit greatly from a lifeline in the form of three months' protection from the Circuit Court, which would allow them to restructure debts and trade out of difficulty. Realistically, it will be a year before this significant body of legislation is passed. One can imagine how many people will fall through the cracks in the next 12 months. I ask the Minister to consider bringing these provisions in a little sooner.

I welcome the removal of the audit requirement for voluntary organisations provided for in section 121(4). It is a welcome reform which will reduce the administrative and financial burden on not-for-profit community development organisations. Many small management companies will also be exempted from the audit, which is welcome. The regime was overly bureaucratic previously.

I welcome the absence of the nebulous "place of business" concept in respect of unlimited companies from Part 21 of the Bill as it relates to external companies. This gives greater clarity to third parties dealing with such companies. They will now deal either with a branch of an external company which has a CRO number and a filed account or an unregistered company. However, I have concerns about the use of unlimited holding companies in corporate structures in Ireland and the use of offshore limited companies as shareholders within that structure. I am disappointed that these issues were not addressed in the Bill. I ask the Minister to clarify whether he attends to address these issues. One can start an unlimited company in Ireland and bring in shareholders who have limited liability. If the company is based offshore, it reduces the unlimited liability of the company that was established. It is a loophole the Government should examine. Most people assume, when dealing with an unlimited company, that there is no upper limit on the personal liability of its shareholders for the company's debts if it were to become insolvent. Approximately 4,000 Irish companies are unlimited and, as a result, escape the stricter filing and disclosure companies to which private limited companies are subject.

The usual filing and disclosure requirements allow a creditor to apprise himself or herself of a company's solvency before trading with it. Many large corporate structures are, however, using unlimited liability companies with limited shareholder liability by ensuring that some or all of the shareholders are limited liability entities. They may also reorganise company structures to transfer trade to a limited liability company at a later date. While it is always open to the courts to look through the corporate character of unlimited companies to see for themselves if its members include limited companies - in other words, to lift the corporate veil to examine the underlying members - it can only be done via an expensive court application. This general principle was approved by the Supreme Court in the case of Bray Travel Ltd, but, as the High Court remarked recently in Goode Concrete v. CRH plc and others, this approach is not possible when the limited company is an offshore company. This happens where the subsidiary limited company of an Irish holding company with unlimited status is registered in a country outside the EU which has limited disclosure requirements. This includes the Isle of Man.

I could name three of the more serious players in the development game in Dublin, with problems in the region of €2 billion, who were availing of the structure. The Acting Chairman would be less than impressed if I did. This Minister might indicate whether and how he intends to deal with such unacceptable situations and whether by additional legislation or discussion in a different forum. One possibility is to introduce legislation requiring all private unlimited companies to notify the Companies Registration Office, CRO, of any shareholder company that might limit its liability. The unlimited company could be required to update information every year when filing an annual return or any abridged financial information required. In this way, a creditor may check the CRO records of an unlimited company at the outset of contractual negotiations and is alerted to the fact that, although registered as unlimited, the company’s liability may be limited. Failure of an unlimited company to notify the CRO of any limited liability shareholder could result in the imposition of limited liability status on the company immediately or in respect of a particular transaction as the courts see fit, within the limits of reasonableness and proportionality.

I wish to discuss the thoughts of Ha-Joon Chang, a South Korean economist based in the University of Cambridge. He advocates a strong hands-on approach by government in dealing with companies to ensure better long-term outcomes. My philosophy is that bureaucracy and red tape are negative for companies but good regulation is positive. A major problem in the business world, which is also a problem for government, is that many decisions are based on short-term thinking. There is not enough long-term planning or investment. The logic is that management and shareholders are not mobile and will not be around forever. They are more interested in turning a quick buck than the firm's long-term prospects. Ha-Joon Chang states:

The corporate sector is very important to any economy but allowing firms the maximum degree of freedom may not even be good for the firm themselves, let alone the national economy. In fact, not all regulations are bad for business. Sometimes, it is in the long-run interest of the business sector to restrict the freedom of individual firms so that they do not destroy the common pool of resources that all of them need, such as natural resources or the labour force. Regulations can also help businesses by making them do things that may be costly to them individually in the short-run but raise collective productivity in the long-run – such as the provision of worker training. In the end, what matters is not the quantity but the quality of business regulation.

By the end of the Second World War, GM was the biggest car-maker in the US and had become the biggest company in the country. It was perceived that what was good for GM, was good for the United States, and what was good for the United States was good for General Motors. The logic behind this argument seems difficult to dispute. In a capitalist economy, private sector companies play the central role in creating wealth, jobs and tax revenue [or a central role]. If they do well, the whole economy [benefits]. Especially when the enterprise in question is one of the largest and technologically most dynamic enterprises, like GM in the 1950s [and 1960s in America], its success or otherwise has significant effects on the rest of the economy – the supplier firms, the employees of those firms, the producers of the goods that the giant firm’s employees may buy and so on. Therefore, how these giant firms do is particularly important for the prosperity of the national economy.

However, between the Great Depression and the 1970s, private business was viewed with suspicion [in most quarters] even in most capitalist economies. Businesses were seen as anti-social agents whose profit-seeking needed to be restrained for other, supposedly loftier, goals, such as justice, social harmony and protection of the weak. As a result, complicated and cumbersome systems of licensing were introduced in the belief that governments need to regulate which firms do what in the interest of wider society. Large firms were banned from entering those segments of the market populated by small farms, factories and retail shops, in order to preserve the traditional way of life and protect ‘small men’ against big business. Onerous labour regulations were introduced in the name of protecting worker rights. In many countries, consumer rights were extended to such a degree that it hurt business [in some way].

These regulations, pro-business commenters argued, not only harmed the large firms but made everyone else worse off by reducing the overall size of the pie to be shared out. By limiting the ability of firms to experiment with new ways of doing business and enter new areas, these regulations slowed down the growth of overall productivity. As a result, since the 1970s, countries from all around the world have come to accept that what is good for business is good for the national economy and have adopted a pro-business policy stance. This was at the heart of neoliberalism [but we have learned much since then].

In the summer of 2009, GM went bankrupt. Notwithstanding its well-known aversion to state ownership, the US government took over the company and, after an extensive restructuring, launched it as a new entity. In the process, it spent a staggering $57.6 billion of taxpayers’ money. It may be argued that the rescue was in the American national interest. Letting a company of GM’s size and inter-linkages collapse suddenly would have had huge negative ripple effects on jobs and demand, aggravating the financial crisis that was unfolding in the country at the time. The US government chose the lesser of the two evils, on behalf of the taxpayers. What was good for GM was still good for the United States.

But what went wrong? When faced with stiff competition from imports from Germany, Japan and then Korea from the 1960s, GM blamed ‘dumping’ and other unfair trade practices by its competitors and got the US government to impose import quotas on foreign, especially Japanese, cars and force open competitors’ home markets. In the 1990s, when these measures proved insufficient to halt its decline, it had tried to make up for its failings in car-making by developing its financial arm, GMAC (General Motors Acceptance Corporation). GMAC moved beyond its traditional function of financing car purchases and started conducting financial transactions for their own sake – all leading to the $57 billion bailout on the part of the taxpayers. Things would have been so much better, had GM been forced to invest in the technologies and the machines needed to build better cars, instead of lobbying for protection, buying up smaller competitors and turning itself into a financial company.

More importantly, all those actions that have enabled GM to get out of difficulties with the least effort have ultimately not been good for GM itself – unless you equate GM with its managers and a constantly changing group of shareholders. These managers drew absurdly high salaries by delivering higher profits by not investing for productivity growth while squeezing other weaker ‘stakeholders’ – their workers, supplier firms and the employees of those firms. They bought the acquiescence of shareholders by offering them dividends and share buybacks to such an extent that the company’s future was jeopardized. The shareholders did not mind, and indeed many of them encouraged such practices, because most of them were floating shareholders who were not really concerned with the long-term future of the company because they could leave at a moment’s notice. What is good for some stakeholders of a company, such as managers and short-term shareholders, may not be good for others, such as workers and suppliers. Ultimately, it also tells us that what is good for the company in the short run may not even be good for it in the long run.

Sometimes regulations help business by limiting the ability of firms to engage in activities that bring them greater profits in the short run but ultimately destroy the common resource that all business firms need. For example, regulating the intensity of fish farming may reduce the profits of individual fish farms but help the fish-farming industry as a whole by preserving the quality of water that all fish farms have to use. For another example, it may be in the interest of other individual firms to employ children and lower their wage bills. However, a widespread use of child labour will lower the quality of the labour force in the longer run by stunting the physical and mental development of children. In such a case, child labour regulations can actually benefit the entire business sector in the long term. For yet another example, individual banks may benefit from lending more aggressively. But when all of them do the same, they may all suffer in the end, as such lending behaviours may increase the chance of systematic collapse, as we have seen in the 2008 global financial crisis. Restricting what banks can do, then, may actually help them in the long run, even if it does not immediately benefit them.

It is not just that regulation can help firms by preventing them from undermining the basis of their long-term sustainability. Sometimes, regulations can help businesses by forcing firms to do things that may not be in their individual interests but raise their collective productivity in the long run. For example, firms often do not invest enough in training their workers. This is because they are worried about their workers being poached by other firms ‘free-riding’ on their training efforts. In such a situation, the government imposing a requirement for worker training on all firms could actually raise the quality of the labour force, thereby ultimately benefiting all firms. There are many regulations that are pro- rather than anti-business. Many regulations help preserve the common-pool resources that all firms share, while others help business by making firms do things that raise their collective productivity in the long term. Only when we recognise this will we be able to see that what matters is not the absolute amount of regulation but the aims and contents of those same regulations.

I welcome the opportunity to speak on the Companies Bill 2012 and will mention a number of elements of it which are important and relevant to the modern running of a company. For the first time in Irish company law, the most common company type in Ireland - the private company limited by shares - will be placed at the centre of the legislation. Since 1963, there have been 16 relevant Acts on company law. These need to be consolidated, and this is achieved in this Bill. The Bill is designed to make it easier to operate a company in Ireland and it is set out in 25 Parts to ease accessibility to the law for each company type. The Bill contains 1,429 sections and 17 Schedules and it will provide significant benefits to companies by reducing red tape and making company law easier to understand. All of us who have worked in or worked for companies long to see a reduction in red tape and this Bill will realise this ambition.

As some speakers have said, many companies are struggling currently. I have been approached by many companies in my constituency of Sligo-North Leitrim and have met many directors and workforces. These people have told me there are major difficulties, one of which is access to broadband, as mentioned by some of my colleagues. There are many black spots in the constituency I represent and that needs to be reviewed.

This Bill will provide significant benefits to companies of all types and it is part of the Government's drive to make Ireland the best small country in the world in which to do business. I will point out some of the measures which will ease the burden and cost of regulation. Companies will be able to operate with one director and will not have to hold a physical annual general meeting. There will be a reduced burden of paperwork and there will no longer be a need for articles of association. For the first time companies will be able to engage in mergers and an audit extension can be extended to dormant companies.

It is clear to many of us that the small and medium-sized enterprise sector is suffering more than any other area from the current credit drought in the banking sector. We have spoken about the banks and their behaviour towards small companies over the past number of years. Unfortunately, banks are not behaving in the way they should, although they are being requested to do so. We see the controversies in the banking sector, and some people doing well out of it while some SMEs are struggling to survive.

Commercial rates are another cost. There will have to be a review of commercial rates, which should be based on profits. Many companies are closing due to commercial rates and the penalties involved. It is important that we review commercial rates because they are one of the main worries for companies currently. We also talk about VAT and compliance with health, fire and employment regulations, which make it difficult for company managers to achieve a profit.

There are numerous regulations which reduce the time managers have to run their businesses. The Minister is to be commended on his initiative to tackle company law and to reduce the burden on company owners and managers by reducing red tape and regulations. It is estimated that 13,000 companies are established every year and they will see savings of more than €6 million, mostly in professional fees. Legal fees and transaction costs for businesses can be expected to fall under the new system, as the streamlined registration system should make it faster and easier for companies and their professional advisers to register charges. It is widely expected that the risks of lending to Irish companies will be greatly reduced, which will, in turn, marginally affect the cost of credit for businesses in the economy.

For the first time, private companies will be able to engage in mergers and divisions, whereas under the old law there was no facility for Irish private companies to merge. This will strengthen existing companies, which may see opportunities to join and combine resources, staff and expertise for their future advancement. Many sole traders asked their spouses or partners to join them as directors even though they may have had no interest in the business. The proposal to allow one director is sensible and practical and I commend the Minister on this change.

Many companies - for example, small management companies and community-based companies - end up causing citizens much unnecessary hassle and extra cost, but this Bill will benefit these people who require a company to administer their affairs but who do not want the hassle of undue regulation and red tape. Many Deputies work with community organisations which must form companies to release funding and they despair of all the paperwork, such as articles of association and various audits. This Bill will benefit many of these community groups. Some residents in housing estates also form their own companies to look after their estates. There will be benefits for them also.

There has been a terrific reaction to this Bill across many sectors. One company involved in company trading and advice said on its website that it is delighted with any legislation which makes it easier to do business in Ireland and abroad. I am delighted to support this Bill and commend the Minister on his work.

I thank the Technical Group for giving me some of its speaking time. Nobody can accuse the Minister or his predecessors of rushing this legislation as it has been approximately 13 years in the making. The Bill is 1,300 pages long and costs €109. Nobody could say it was rushed or put together in a hurry.

I have received representations from accountants who have concerns about this Bill. All qualified accountants in Ireland are disappointed that the Bill does not include a clause giving protection to the term "accountant", as was promised by successive Governments. In Ireland, the titles "doctor", "dentist", "solicitor", etc., are protected so that only a person qualified and registered with a supervisory body can trade as such, but this is not the case for accountants. Anyone can set up an office and refer to himself or herself as an accountant. This is misleading to the public and anti-competitive, as all qualified accountants are required to be licensed and insured, whereas an unqualified accountant is not regulated but competes with qualified accountants for clients.

The various accountancy institutes have campaigned for this for some time and they have sent a letter outlining their concerns to all the qualified accountants who sit in Dáil Éireann. I raise this matter on behalf of up to 40 qualified accountants in County Kerry who create much needed jobs and provide a respectable service. We are all very glad of good and proper accountants and accounting advice when we need it. County Kerry is blessed that it has very eminent and qualified accountants looking after its affairs.

I would like to hear what the Minister of State and the Government have to say about that. The person who brought it to my attention is perfectly correct.

Since I was 17 or 18, I have been a small employer. I have run various types of businesses and experienced all of the associated red tape. It must be acknowledged that small companies and businesses are the backbone of the economy. Anything that can be done to make the running of a small company or business easier should be done by the Government.

Some days ago I heard a multinational retailer, which I will not name, boasting about how it would create 200 or 300 new jobs here. I have no doubt that it will, but in doing so it will probably cost small businesses 300, 400 or 500 jobs. There is nothing said about that. This relates to the challenges small businesses face daily in competing with multinationals. We all want competition and people to have a variety of goods.

We are always told that, for ethical reasons, we must declare everything. I may be deemed to have a vested interest when I speak about multinational shops because I am a small trader and have a small shop and run a small country post office. Of course, I defend my business, but I also defend every other person with a small shop. These small businesses are the backbone of the country and give much needed employment. There is nothing fancy or grand about it in that the shops about which I speak do not employ 200 or 300 people; they employ two or three. However, these employers are very important.

In recent years small businesspeople have been crippled with bureaucracy and red tape. People are blowing about how this Bill will be great. Members on the other side of the House are all clapping each other on the back. Does the Minister of State not see what is happening every day among small businesses? I will give him examples. HSE officials travel around in a motor car and employ under-age youngsters to try to entrap shopkeepers by getting them to sell cigarettes to them. Shopkeepers try to act within the law and we all want to see the law upheld - we do not want to see cigarettes sold to those who are under age - but it is wrong that there are Government agencies trying to entrap and criminalise people if an error is made. I can instance a case in which a shop made stools available for elderly people waiting for their shopping or assistance. A HSE official insisted that the stools had to be taken out of the shop. Can any Government tell me it is helping small businesses when it carries on like that?

Daily there are rafts of new Bills. The cost of compliance with legislation is enormous. In recent months it was dreamed up that it was a great idea that filling station owners should account daily, weekly and monthly for the amount of stock in their fuel tanks. This was deemed to be a way of combating the illegal sale of fuel, including laundered fuel. However, it placed a further burden on already struggling small businesses. One might believe it is very easy to keep a record of stocks in the manner prescribed, but it takes time and there is an expense. Somebody has to take on the job every day. It is anti-competitive and represents another burden on businesses.

The Government should do something imaginative. We must all send in audited returns. The cost of submitting audited returns every 12 months is significant for small businesses. What if the Government came up with an imaginative proposal such as requiring the submission, by small businesses with a turnover below a specified threshold, of an audited return only every two or three years? Would this not be positive? It could save a small business or company €4,000 or €5,000 per year. These are the imaginative steps the Government should be taking.

Receivership should be the very last option for small businesses. The best person to keep a business going is the business owner. There was recently a high profile receivership action in County Kerry in which a highly capable businessperson, whom I will not name, had their business taken from them. That was wrong. In general, every assistance should be given to a person to keep his or her door open and to allow him or her to try to save his or her business. Just as a farmer adores his or her land, a businessman who has been running and trading successfully, or struggling for many years, dearly wants to keep his door open, stay in charge of his own destiny and try to continue to create employment. Receivership should be the last option in all cases.

The Government made commitments and broke promises regarding upward-only rent reviews. I asked in the House on several occasions why the Government would not make public its correspondence on upward-only rent reviews and the reneging on the promises it had made before the general election. I firmly believe the Government dropped the ball. Of course, high rents must be tackled. One need only go out onto the street to meet people who are paying rents that are too expensive. This issue should be tackled.

There is a raft of new charges on businesses, including increased water charges and refuse charges. The bills that come in every day are a burden; it is like an avalanche. They really find it hard and it does not look as if there is any light at the end of the tunnel for them.

It is very important to small businesses and companies that broadband be provided in all parts of the countryside. Now more than ever before, people are creating offices in their homes, if possible, in an effort to curtail costs. Broadband is essential in the running of any business.

The behaviour of the banks leaves an awful lot to be desired. Business owners who want to advance or improve would see a great difference if they were given a small amount of money. Despite the fact that they might have a great track record for many years, they are not receiving loans. Just because bank mangers and bankers lent recklessly to those who would never be in a position to pay back what they owed, they are refusing to give loans to those whom I would call respectable businesspeople.

The people about whom I am speaking are not fly-by-nights like those who during the boom were flying around the country in helicopters thinking they were gods but the backbone of Ireland in terms of the small businesses they run, some of which were started by their parents, grandparents and so on. They are also the unfortunate victims of bad banking practises. The banks need to start lending again to small companies if they are to remain viable and the economy is to recover. This is one of the most important issues on which the Government should be concentrating. I urge it to stop looking to the multinationals to invest here and create jobs and focus instead on protecting the people here who are creating employment.

I would like to speak about the level of unemployment in County Kerry which has been badly let down not alone by this Government but also by successive Governments, IDA Ireland and all of the other agencies charged with bringing investment and employment to all counties. The agencies are not concentrating on locating jobs in County Kerry. Enough is not being done in this regard. I have always been supportive of the local development companies and have had many dealings during the years with the partnership companies. Lest anybody accuse me, as happened recently in a media report, of not declaring what might perceived to be a vested interest in this regard, I am currently involved in a small business which is awaiting an adjudication on an application for funding. I support the work of the local development companies which, in the administration of European funds, always take a bottom up approach in nurturing and assisting businesses. They assist people who are creating jobs for themselves and, perhaps, one or two others, be it in the tourism or manufacturing sector. Many owe the success of their small businesses to the critical investment they received from Leader companies at a time when they desperately needed it. Great significance should be placed on back to work initiatives and so on. Any initiative which helps even one person to return to employment, even if it is only for a couple of days a week in the first instance, is welcome. Irish people want to work. They need a reason to get up in the morning and make a living for themselves. The Government needs to support them in that regard.

When it comes to the removal of red tape, enough is not being done by the Government. If I thought this legislation would help small businesses and keep people in employment, I would be supportive of it. However, enough is not being done in this regard by the Government. The Minister of State, Deputy Michael Ring, will know from his constituency work that many people are in distress. Owing to the refusal of banks to assist them and the level of red tape involved in terms of high insurance costs and so on, many have seen their life's work crumble before them. The cost of public liability insurance is out of control. Many are finding it difficult to get such insurance and those who have managed to get it are experiencing difficulties in meeting the cost of premiums which are ever increasing, not because they have made a claim but to cover the cost of claims made by others, which is unfair. I am approached on a daily and weekly basis by people who are finding it hard to keep going. These are the reasons for many of the company closures during the past five years, in particular. The number of vacant premises in towns and villages saddens me. Many of them are going to rack and ruin. Many pubs have also gone out of business. Successive Governments did everything they could to ensure the closure of pubs and small shops, leaving villages decimated. Those that remain open are under attack.

The Minister for Justice and Equality, Deputy Alan Shatter, thought it was a good idea to close rural Garda stations. People, particularly those living in rural Ireland, will remember this. The Minister also closed Garda stations in urban Ireland, including one in which 36 gardaí were located. As I have stated previously in the House, the cost of closing a Garda station is greater than keeping it open. The Minister has misled the House on numerous occasions. On one occasion he told us that the purpose in closing Garda stations was to have more gardaí on the street, while on another, he told us gardaí were being taken from Garda stations and placed in community centres and so on. Where was the common sense in this approach?

When I look at those sitting on the front benches on the Government side - I do not include the Minister of State, Deputy Michael Ring, in this, as he is a good Minister - I see people who have never created even one job. A person who cannot create a job for himself or herself cannot create jobs for his or her friends and neighbours. Many Ministers would not have a clue how to create employment, which, sadly, is evident from some of the decisions they have made since taking up office.

The next speaker is Deputy Seán Kyne who I understand is sharing time with Deputies Damien English and Áine Collins.

At the recent regional consultation meeting in Galway on the Action Plan for Jobs 2013 a local businessman lamented the time he had to devote to navigating regulatory issues. He contended - correctly, in my view - that the time spent on such issues was not time spent on strengthening and growing his business. Almost all of the businesspeople who spoke at the meeting told of difficulties in grappling with rules and regulations at different levels of government, including Departments, local authorities and State agencies. This legislation will go a long way towards addressing the concerns of the people assembled at that meeting in Galway and all of other men and women running businesses across the country.

We cannot underestimate the significance of small firms. As stated in the report of the advisory group on small business, there are almost 200,000 small firms in Ireland employing more than 655,000 people. The figure of 200,000 represents approximately half of all the people engaged in business. At a cursory glance, the ramifications of this landmark legislation will be felt directly by at least 1.3 million people and indirectly by hundreds of thousands more.

The overarching theme of the legislation is consolidation. It represents the culmination of a long period of consultation and co-operation with input from experts and stakeholders from across sectors including business groups, Departments and agencies, the legal and accountancy professions and trade unions. The legislation is the most comprehensive put forward by this or any Government in the history of the State, with 25 Parts, more than 1,400 sections and 17 Schedules. It indicates how central businesses - from the most local, community-focused organisations to the largest corporations – are to communities across the State. As anyone who has ever had cause to examine or consult legislation will know, there is little that is more tedious and time-consuming than having to search back and forth through various Acts and their amending Acts. We often hear talk of plans to create a one-stop shop for a scheme or a sector. This Bill achieves that task in terms of setting out the law as it stands for companies - for their formation, operation and, if required, their winding up. From the duties of directors to the law concerning shares and share capital, this Bill covers it all.

However, the Bill also goes beyond consolidation by setting out innovations and reform across an array of areas, including business type, director duties and offences against the Companies Act. As the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, has noted, the Bill will make it easier for companies to be aware of and understand their legal obligations, reduce red tape and simplify obligations, reduce regulation and compliance costs, and improve competitiveness, ultimately ensuring that our Irish businesses receive the support they need from the Government to prosper and flourish and so in turn ensure that our communities do likewise.

Continuing the common-sense approach, two thirds of the Bill sensibly focuses on private limited companies, as this company type is the most popular choice of business model. It is interesting to note that this company type is a little over a century old and was first permitted within the 1907 Companies Act. Among the most radical of the reforms for the traditional private company limited by shares is the abolition of the objects clause, which means that a company will now have the same legal capacity as a natural person, with particular positive consequences in terms of accessing finance and credit. Several other reforms include the new summary approval procedure, which will allow companies to carry out certain activities without having to seek High Court approval, as well as new powers to engage in mergers and divisions, heretofore not provided for private companies under Irish law, which all contribute to faster, more efficient decision-making and ultimately place Irish companies in a much improved position to compete in the more complex and competitive global marketplace.

One of the most welcome provisions of the Companies Act 1990 was the introduction of the concept of examinership. Examinership recognised that a company experiencing difficulties of a temporary nature might, with legal protection, time and space, be able to work its way through the difficulties. Thousands of companies here have successfully availed of examinership since the law was introduced. The new Companies Act sensibly permits examinership through the Circuit Court so that it will be a realistic, more affordable option for smaller companies, which make up the Irish business landscape to the greatest extent.

The Bill, however, also provides for a much greater degree of flexibility to facilitate people in choosing different business models should that prove more suitable to their situations. For the first time, each company type is governed by a specific part of the Bill, with the creation of new, more flexible company types. It also recognises the evolution of a business and that at times a different model may be a better fit for the organisation. That is why the Bill contains a provision to enable a business to change business model, subject to satisfying clearly defined rules.

While we must cherish and support entrepreneurial endeavours, we must also ensure that a person takes responsibility for his or her actions concerning a business. While we must facilitate innovation and sensible risk-taking, we must not facilitate recklessness and irresponsibility, which often leaves the taxpayer exposed and picking up the pieces.

A particularly important and innovative component of the Bill is to be found in Part 5 - that is, the duties of directors and other officers. This sees the codification and consolidation, in their entirety, of the duties of the director and other officers of the company.

Section 226 is of specific note as it concerns larger public limited companies, the failure of which can have greater ramifications, as we have unfortunately seen in recent times. The fact that directors will be required to make an annual statement acknowledging that they are responsible for ensuring that the company has complied with its relevant obligations demonstrates the importance of the role of directors and also makes certain that a director will be unable to declare that he or she was oblivious to regulatory failures should such failures be uncovered. Section 229 sets out the main fiduciary duties, including the requirements to act honestly and responsibly, to avoid conflicts of interest, to act in accordance with the company’s constitution, to exercise care, skill and diligence, and to have regard to the interests of the employees and the members of the company.

I am heartened to see the prioritisation of ethical matters. While the vast majority of Irish companies have operated ethically and in good faith, regrettably there have been those which have not upheld such high standards. Those which have acted in an unethical manner, while perhaps not illegally, have often done so often for personal gain at the expense of others, including the taxpayer. Unambiguously stating these duties and revising and strengthening the rules concerning liability for breaches and failures will not only hold to account those acting recklessly, unethically or illegally but also protect those who act honestly, genuinely and faithfully.

Furthermore, Parts 14 and 15 comprehensively address compliance and enforcement and adopt a more stringent approach. Regrettably, in the past number of years the Office of the Director of Corporate Enforcement has had a greater workload and increasingly complex cases. I welcome the fact that the Bill before the House today sets out the functions of the office while also innovatively categorising various offences against the Companies Act. The Bill demonstrates that so-called white-collar crime will rightly be dealt with as effectively and expeditiously as any other category of crime.

It is the aspiration and wish of the Government to put in place the conditions necessary to create jobs. While we cannot, except in a small way, improve the overall European and world economic climate, we can and must change the conditions within the country to help business start-ups and existing businesses to maintain jobs. It has become a cliché to say that we must reduce red tape and bureaucracy for businesses, but this Bill will do exactly that.

I look forward to the taking of Committee Stage at the Select Committee on Jobs, Enterprise and Innovation, and I have no doubt that business groups across the country will continue to submit ideas on how to optimise the climate for job creation and retention. I am confident that this ground-breaking legislation will permit the Galway business person I mentioned initially and business people across the country the time to concentrate on expanding their businesses to compete nationally and globally and, ultimately, to create the jobs that are vital to our economic recovery.

I thank the Ceann Comhairle for the opportunity to speak on this Bill, which is highly anticipated and will be significant for the business and legal sectors for generations to come.

As Chairman of the Oireachtas Joint Committee on Jobs, Enterprise and Innovation, I welcome Second Stage of this Bill and look forward to facilitating as much debate on it as necessary on Committee Stage. I am conscious that Deputy Kyne, Deputy Áine Collins and other members of the committee welcomed the Bill and looked forward to its consideration on Committee Stage but I will have to remind the members of the committee to book most of the autumn for its consideration, because it could take us three or four months to deal with the 1,429 sections of the Bill. At a meeting of our committee this morning, one of our members, Deputy Lawlor, claimed he had read 1,427 sections and has only two more to read. We will have a busy time ahead and it is important we all put the work into this Bill and get it through the Houses as quickly as possible as it is a long time in the making.

I wish to join the Minister, Deputy Bruton, in acknowledging and thanking the officials in the Department for Jobs, Enterprise and Innovation, the Company Law Review Group and the Office of the Parliamentary Counsel for their complete and meticulous work in bringing this Bill from inception to publication to the Second Stage debate today over the past six or seven years. I also want to acknowledge the many groups and individuals that have written to members of the committee, and to myself as Chairman, offering assistance, help and guidance in bringing the Bill through the Houses. None of us here are experts and we do not know everything there is to know about this legislation. Given the large number of sections in it, it is important that we consult all those who would be affected by it and do a good job in bringing it through the Houses.

Our Taoiseach has said many times that the ambition is for Ireland to become the best small country in the world in which to do business. That means all business, small and large, domestic and exporting. It refers to those in the retail trade and those serving local communities. It means those paying their taxes and charges will be able to work in a legal, regulated and fair marketplace. That is the reason this Bill is extremely important. I believe we will achieve this ambition. The scale of reform and action across the Government to improve our competitiveness is unyielding until we reach our goals.

It is important to understand that becoming the best location for business and enterprise is not an end in itself. It is not for business's sake alone that we do it, but for the sake of the people. Only a successful and thriving enterprise environment can provide the types of opportunity that our people demand and need. The jobs from a growing economy can support their dreams, fuel their ambitions and provide for their families. It is a big challenge. There is a great deal of work to be done. The Companies Bill 2012 will be a main component of this work in providing the opportunities needed to make it easier to start up and run a business in this country and create employment.

Ireland, like many other countries in Europe, has experienced an unemployment shock in the past few years from which it has yet to recover. Our citizens rightfully expect us to show leadership to get the economy moving again, to help businesses develop and to get people back to work.

To succeed, we must now show leadership to transform the way we do business, to build a sustainable future for business and our citizens. For business, this means being ready and willing to adapt to the emerging and improving business environment, to adapt to new law such as this Bill, to work with Government and its agencies as we seek to improve national competitiveness, and we in turn will provide the stability and security needed by business to prosper.

The Government is rebuilding the economy by moving it from a failed model based on property speculation, banking and debt to a sustainable economy based on enterprise, innovation and exports. I am glad to say that significant progress has been made in dealing with the many legacy problems. We still have a long way to go. Over the past two years we have worked hard to bring a new level of stability to our economy and politics which is now allowing us to focus on the main challenge of getting Ireland working again.

With renewed confidence and belief in ourselves, the most troubled economic period of the recent decade is now behind us. I have no doubt that we will collectively overcome the current economic challenges before us. As our competitiveness improves, we have seen our economy return to growth for the past two years. Further growth is forecast for this year. Costs are back to 2003 and 2004 levels and our exports are breaking new records. The growth is small. It is going in the right direction but we still have a lot of work to do.

The Government's top priority is to get Ireland working again. We have started to see some positive improvements in the unemployment situation in Ireland. We have seen a turnaround in private sector employment, moving from a net loss of 250,000 jobs in the three years leading up to this Government's election into office in 2011 and have recorded a net increase of over 12,000 in the past 15 months. We are still losing jobs but we are winning more per week than we are losing and that is a positive development. If we keep that up and increase the number we win and reduce the number we lose we will be in a better place in a couple of years time.

A good example of this can be seen in my own county of Meath where there are now some 4,771 jobs in Enterprise Ireland supported businesses. This is even more encouraging as there are now more jobs in Enterprise Ireland supported businesses in Meath than in 2008. While we are not always happy with the IDA and demand more for our constituencies I am quite impressed with Enterprise Ireland's results in the past couple of years. The IDA is doing amazing work for the country. The past two years have been two of their best ever. Deputies naturally fight for more for their own counties so we will keep the pressure on the IDA.

I welcome the fact that the Bill consolidates and simplifies over 50 years of company law. Since 1963 there have been 15 amending Acts. There have also been many statutory instruments and hundreds of EU directives coming through every year. When I worked on the Oireachtas Joint Committee on EU Scrutiny, on average 500 new directives came before us every year. Under the new regulations many of the directives go directly to the relevant committees but we deal with ten or 20 at every meeting. A lot of legislation comes at companies, and to deal with it they have to do a lot of work. It is important to have new consolidating Bills such as this which make company law more accessible to more people. This is a good development as clear law leads to more compliance and comprehension on the part of those setting up and already in business. It also helps legitimate businesses to flourish while making it less of an incentive to operate illegally. This has come to the attention of Oireachtas Joint Committee on Jobs, Enterprise and Innovation as we investigate the black market and its effects on legitimate retail trade. At our regional meetings we hear directly from the retail trade and interested groups on how we can further tackle the black market sale of goods and services. We look forward to reporting on this to the Minister for Finance and the other Ministers in the coming months, hopefully in time to effect change in the budget.

I commend the structure of the Companies Bill. It is great to see that for the first time in company law the private company limited by shares is placed at the heart of the Bill. This will be of great relief to the SME sector. The unfair demands that were being placed on small business will be lessened and the environment for small companies and those run by families or with one director will be clearer and more straightforward making it easier for them to survive, thrive and create jobs.

I too welcome the opportunity to speak on this Bill. I assure Deputy English that the committee looks forward to the autumn and relishes the opportunity to go through this Bill section by section because we know how important it is.

The focus of this Government and particularly the endeavours of the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, is to ensure that everything possible is done to create an environment for business to prosper. It is now well accepted that government does not create jobs but an effective Government and Minister create the environment for job creation. The Minister has worked consistently over the past two years to increase our competitiveness as a country and to demystify systems that create uncertainty, to examine our bureaucracy and costs for professional services, all in an effort to encourage people to get involved in enterprise and job creation. Company law is a fundamental block to building any business. The simpler and more comprehensible it is the more people will participate. This Bill is the largest substantive legislation dealing with company law since the foundation of the State. It will bring significant benefits to companies of all types throughout the country and will add greatly to the Government's drive to make Ireland the best small country in the world in which to do business.

Until now company law has been incorporated into 16 Companies Acts which date from 1963 to 2012. I know from my own experience as an accountant and having studied this that it was a huge issue for small businesses and small practices. The situation has been a nightmare for ordinary business people, especially SMEs who have not had the in-house experience to understand this legislation. As well as being a nightmare for entrepreneurs the situation was a bonanza for professionals whose input was necessary to interpret the relevant parts of any of these 16 Bills meant for SMEs. Not only did it add substantial costs to businesses but because of the complexities it added to business people's anxiety because it was difficult for them to understand their responsibilities as owners and directors of SMEs.

The Bill consolidates the existing 16 Companies Acts in one substantive Act. The most common type of company in Ireland, a private company limited by shares, will now for the first time in Irish company law be placed at the centre of this legislation. All the law which applies to this common type of company which represents up to 90% of all companies registered in Ireland will be contained together in Parts 1 to 15, inclusive. This law will be set out logically to follow the life cycle of a company, starting with the provisions governing corporations followed by sections which apply to the ongoing operation of the company before dealing with provisions which apply to the closing down or winding-up of a company. The main provisions in the Bill which simplify the whole process for private companies limited by shares are that only one director is required. The company will not be required to hold a physical AGM. Under the old system a company had to adhere to many unnecessary procedures to comply with the law. The constitutional requirement is simplified such that when the Bill is passed a company will have the same legal capacity as a sole trader. This will aid the establishment of a variety of commercial transactions and reduce compliance overheads. Private companies will be able to engage in mergers and divisions. Under current law there is no provision for two companies to merge. I welcome the new rules on audit exemption because this is a huge cost for companies. Directors' responsibilities will be clearly set out and simplified. All offences under company law will be streamlined.

Most of the provisions in this Bill deal with SMEs. The changes are very significant and will make it easier to become involved in business and for business to expand and provide jobs. This is just part of the Government's drive to create the type of business environment that will encourage our own entrepreneurs and create a feel-good factor for business generally. It will enhance the emerging reputation of this country as being one of the best places in the world to do business. I commend the Bill to the House.

In introducing this Bill the Minister said that we were at the foothill of a very big debate and that this is a landmark project. There is no doubting that is the case. The Bill has been in gestation for almost 12 years under the remit of six successive Ministers and numerous reports. It comes from a very different and damaging era in Irish society, which had an ethos of light touch regulation. That culture has had devastating effects on Irish society and business and on workers and their families. There have been six austerity budgets, annual or more frequent cuts to services, huge tax increases and significant job losses and emigration. Unemployment stands at 14% with 430,000 unemployed and many people leaving the country.

The Bill comes from that era and is, unfortunately, deeply flawed in several areas as a result. Small and medium-sized enterprises are vital to the retail trade, the economy, its recovery and employment creation. We must ensure the many retail outlets and businesses closed on the main streets of every city, town and village are brought back to life to create employment. I welcome those aspects of the Bill that reduce the burden of red tape and help the day-to-day operation of businesses.

Unfortunately, under the cover of this legislation, there are some seriously flawed provisions and omissions which must be rectified. The Bill provides that a private company limited by shares, or the new LTD company as it will be known, will have the same legal capacity as a natural person. I am advised that this is a seismic shift which will prove seriously damaging to workers’ rights, particularly the rights of women workers. Giving a company the legal personality of a natural person is unprecedented. It is hard to understand and believe Cabinet members who were formerly trade union officials, including the Tánaiste, could leave this provision through the Cabinet.

The Bill should include a specific provision to ensure workers would be regarded as stakeholders for the purposes of representation on the boards of companies and, accordingly, would have the right to sit on the board. The Bill also states a LTD will no longer be obliged to go through the formality of holding an AGM, annual general meeting, whereby all members must convene at one location at the same time once a year. Instead, members will be allowed to have a written AGM, whereby all matters can be dealt with. This is an incredible provision which will have seriously damaging effects on many companies. Residents in apartment blocks run by a management company will now not have the right or entitlement to attend an AGM to hold the company to account. This is a wrong and damaging provision which should be withdrawn.

The Bill will allow a LTD to have only one director; under the current law the minimum number has been set at two. The current arrangement should remain, as it allows for necessary checks and balances. Provision should also be made for public interest directors with legislative teeth, not like those in some of the banks who just want to be paid and have no hand, act or part in the running or calling into account of the banks’ boards on behalf of the public.

Workers should be priority creditors when it comes to redundancy payments, with the ring-fencing of company pension funds to ensure companies cannot declare themselves bankrupt or go into liquidation, leaving huge holes in such funds. I congratulate and compliment the workers of Waterford Crystal who this morning won a significant court case on their entitlements and rights in pension payments.

The issue of commercial rates or local development charges, which present a particular difficulty for small retail companies, has not been addressed in the Bill. Neither has the hoary old chestnut of upward-only rent reviews. The Government promised it would deal with this issue and the Bill provides an opportunity to do so. An affordable examinership process must be introduced so as to make it accessible to small businesses.

I would go so far as to suggest the Bill should be withdrawn and redrafted as it contains significant flaws. At a minimum, there should be significant amendments to address the issues I have raised. The Bill which, in particular, gives a LTD the legal personality of a natural person is simply not good enough

I congratulate the Minister and his officials on this Bill which is a fantastic step forward. Legitimate concerns have been raised on Second Stage which I hope will be dealt with by the Minister, his officials and Members on Committee Stage. Still, the Bill is to be welcomed, notwithstanding these concerns.

I am new to the legislative process, having only started looking at legislation two years ago. Before then, I had never seen a Bill or an amendment in my entire life. I was horrified by how complicated, labyrinthine and inaccessible the process could be. One gets a Bill which can refer to an Act dating from the 1930s or 1960s and one needs a team of 12 lawyers just to follow the threads. This Bill is a fantastic development and I would like to see the consolidation of as many Acts as possible, as well as more efforts to simplify them and make the language more accessible.

This Bill will make life easier for companies. I hope it will mean they will have to pay lawyers less money and that businesspeople will not have to deal with inaccessible and labyrinthine legislation in order that they have more time to do what they enjoy doing, which is innovating, selling goods and services, creating wealth and generating jobs.

I hope the Bill goes some way towards reversing a worrying trend. Only a few years ago Ireland was highly distinctive in terms of ease of doing business. The best known international metric is probably the World Bank's ease of doing business index. In 2009 we were seventh in the world, which is phenomenal. I believe we were fourth in 2008. I could be wrong but I think we were even better in 2006 and 2007. I looked at our position this morning when preparing my contribution and it turns out we have drifted to 15th, which is worrying. Obviously, this is a niche for us where we should be distinctive in the world.

The World Bank rankings can point us to some of the areas on which we must focus. On paying taxes us law-abiding citizens are sixth. Ironically, on protecting investors we are also sixth. How we are not first in the world after everything we have done for international investors in this country is beyond me. I would love to know who are bigger saps than ourselves. On enforcing contracts, which is very important, we are only 63rd in the world; I understand the rankings are done for 150 countries. Interestingly, on getting electricity, a key factor input for many businesses, we are 95th. My understanding is that we have some of the highest energy prices and some of the highest paid utility workers, if not the highest in the world. That is something for the Minister to examine. On dealing with construction permits we are 106th. The World Bank index could be useful in trying to drill down into how we can keep our ranking up. Ireland should aim to be in the top five in the world and sell that abroad as a reason for people to do business here and for people to come here and invest. I encourage the Minister to examine those issues to determine what can be done.

As well as making company law more accessible the Bill proposes some very good changes. I agree with the removal of the stipulation on two directors. Having one director is useful, particularly now with so many young, hi-tech educated people out of work here. There is a great deal of space for very small-scale entrepreneurship and the more that can be done for a single entrepreneur sitting in his or her bedroom or at the kitchen table trying to do something the more useful it is.

I had intended to commend the removal of the need for a physical AGM but I listened to Deputy Healy express his concerns about that and he makes a good point. The point I intended to make was that it streamlines operations and will cut down on costs but Deputy Healy made the good point, which I hope can be examined on Committee Stage, that companies cannot abuse that. I hope the property companies to which he referred cannot use this to circumvent important accountability, which is allowing all the shareholders or owners of the properties to come together. I hope that has been addressed already through the legislation but it might be an issue to be addressed on Committee Stage.

Clarification on directors' loans to ensure they are properly documented is welcome and will inevitably lead to a greater level of transparency and responsibility. I particularly welcome the categorisation on directors' offences, mentioned by a previous speaker, with a maximum fine of up to €500,000 and custodial sentences. It is fair to say that the vast majority of the public does not believe that white collar crime is taken seriously in this country and that there is a serious gap in enforcement. I welcome this measure in the Bill and hope it will be carried through because having the tools in place is one thing but they must be enforced.

The Bill contains a variety of ways to reduce red tape but we must have a balance in that regard. We do not want to fall into the late 1990s and early noughties trap of laissez-faire markets, light touch regulation and the market, the companies and the banks always knowing best. They do not. There is a careful balance to be struck and for me, red tape is the non-value added bureaucracy, administration and so forth. I welcome everything that reduces what I see as red tape, which is the bad stuff, and I hope the Minister will be cognisant that globally we got this badly wrong in the past in terms of letting the markets do whatever they want. I hope we do not end up making some of those same mistakes in an attempt to make the environment for doing business as reasonable as possible.

While we are talking about company law and job creation making things easier I want to put some ideas to the Minister of State to bring to the Minister, Deputy Bruton, for consideration, one of which is a tax deductible scheme for employees to invest in their own businesses. I asked a venture capitalist in London last year why he thought the modus operandi for entrepreneurs in Ireland appears to be to start a company and sell it as quickly as possible for €100,000, €500,000, €1 million or €10 million. In the media we celebrate the sale; the sale is the success. I lived in Boston, which is one of the main venture capital and entrepreneurial hubs in the world, and that is not how the people there think. It is not how they think in Silicon Valley or in London. I asked him why we appear so obsessed with selling the company to Google or whoever as soon as it is worth something. He said that one peculiarity of business and entrepreneurship in Ireland is that the people who set it up try to hold on to all of the equity. They will cede equity to people who invest in the first round, second round etc. but his observation was that culturally we do not like sharing out equity.

There is research that shows when employees have bought in, various good things happen. I am positing. I have nothing to back this up but if more employees own the company or have bought in to the company we might be able to retain them as Irish companies for longer and grow them, as they do in other countries, rather than what seems to be this obsession with getting it in for three years and then flogging it for as much money as we can get. A tax deductible scheme to allow employees buy in to the equity in their firms might be an interesting proposal for consideration.

In the vein of the red tape in the Bill I would like the Government to examine the number of certificates companies need to operate. They need items from the Health Service Executive and from the council for change of use. I am told some businesses can need up to 21 different licences to trade. A good deal of streamlining could be done in this Bill, and much of it may need to include the councils.

I am out of time so I will briefly mention some of the other issues. The upward only rent review is something the Oireachtas should have dealt with. It was a pity the courts stepped in in the Bewleys case and made the right decision. I would like to see a hub of innovation centres throughout the country. There is huge opportunity in that regard. I have seen similar models in the United States and in Germany whereby the state essentially subsidises small office units for one, two or three entrepreneurs. They have shared services and high-access broadband. They can bring in training around accounting, entrepreneurship and these hubs of entrepreneurship are created. The most important facet of them all is that 20, 30 or 40 entrepreneurs across ten or 20 different business are all sharing ideas and expertise. There are a small number of examples in Ireland but if it could be rolled out strategically it would be very useful.

The county enterprise boards should not be put into the county councils. County councils are not entrepreneurial organisations. Notwithstanding that they might have some fantastic people as members, it is a mistake. It has not happened yet. It is in the area of the Minister, Deputy Hogan, but it is not a good idea.

I encourage the Government and the Minister for Finance to give more funding to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, for the venture capital fund. This fund is a fantastic idea and it can leverage more money. Currently, the fund is approximately €18 million a year and that is welcome, but it should be ten times that. No doubt the Minister is listening and I hope he will give Deputy Bruton a lot more cash for the fund.

It has been clear as day over the past two years that the social welfare system does not encourage people to work. I have tried to give people short-term work for five days a week, but they have told me that the social welfare offices have told them they cannot take that work. They can work for three days a week, but if they do five days they lose all their benefits. There are clearly opportunities to make this area more flexible.

Another issue concerns both the Minister and, probably, the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte. The ESB has a fibre optic network throughout the country, but most of it is dark. I understand the ESB is asking for too much money to connect people to it, because, understandably, it wants to recoup its costs. However, I am aware that some very exciting businesses were not established in various places around the country because they needed connectivity and a lot of bandwidth. The ESB was the only way of providing that facility, but the amount of money it sought meant these businesses did not get set up. I believe there is a great opportunity for public value for the State to subsidise the lighting of some of this dark fibre for companies. This would lead to more jobs, tax receipts, etc.

I thank the Ceann Comhairle for the extra time and I commend the Minister and his officials on the introduction of the Bill to the House. It is a fantastic step forward.

When I was a Member of the last Seanad, the then Senator, Joe O'Toole, used to stand up regularly and ask the various Ministers who came to the House the position with regard to the consolidation of company law. He made the point that this consolidation had been long heralded and promised, but deadline after deadline had been missed. The response the Senator always received was that due to the vast complexity of the work and the huge number of Bills involved, it was taking much longer than anticipated, but the legislation would arrive soon. That day has now arrived. The reason the then Senator was so persistent in raising this matter was that even though it is an area of gigantic complexity, with many different Bills involved, it is something that will have a decisive impact on how companies, entrepreneurs and individuals operate within Ireland. Having had an opportunity to look at other pieces of company legislation and having looked at this Bill, I am aware there was huge work involved in getting it to this point. We should therefore welcome the fact we are at a point at which it has been brought to the Oireachtas for debate and adoption.

I wish to make three specific points with regard to how this Bill will be implemented and the impact I hope it will have on companies. I believe the reason this legislation is so important is that individuals who seek to start businesses and invest here need two things from the regulatory environment in which they must operate. First, in so far as is possible, they need simplicity and clarity. They need to be able to understand the rules involved and what they must do to meet the requirements. Second, they need certainty that the environment in which they will operate will exist tomorrow, next year and the year after. One of the reasons the Bill is so welcome is that it will provide greater clarity to many investors and companies in Ireland with regard to where they stand currently and the rules that need to be obeyed. It will also make clear that after the implementation of this Bill, the rules will be in existence for quite a while to come. Businesses will understand that any changes related to the areas covered within the Bill are likely to be changes of degree rather than fundamental changes.

There are other areas that are important to companies seeking to set up businesses here. As this Bill is being discussed in the Dáil today, we should acknowledge that one of the largest foreign investors in our country, PayPal, has opened a new office in Louth, employing more Irish people. One thing that company has acknowledged in statements relating to opening up that office and its other investments in this country is that this is a good place in which to do business because of the quality of our workforce and the environment in which businesses operate. However, I believe the president of PayPal recently said that despite the amount of investment it is seeking to make here and the number of people it wishes to employ, one in five of those it wishes to employ are likely to have to come from abroad. The reason for this is language proficiency and the ability of those who will work in the company to do business with various cultural groups through the languages required. This must give us food for thought. Despite all the progress we are making in so many areas, despite progress made through Bills such as this, despite the enhanced competitiveness of our tax system and despite the good things we say about our educational system - much of which is true - we still find that for a large investor who is seeking to create new jobs in a country with catastrophic levels of unemployment, the skill levels are not sufficient for that investor to employ Irish people alone. This is a sign that the kind of work the Minister for Education and Skills, Deputy Quinn, has signalled regarding the overhaul of the junior certificate syllabus is necessary. It is a sign we need to continue to question and challenge our system to ensure the rhetoric around our education system - much of which is justified - is met by the reality of what we deliver to our students. We must challenge ourselves to ensure we meet the needs of employers and others who want to hire our students when they leave our schools and colleges.

We must also focus on the area of procurement, particularly procurement by public bodies. Two areas are relevant in this regard. Many of the companies that depend on public procurement for their existence are small and medium-sized companies that provide the backbone of employment in this country. The first issue of particular importance for these companies concerns how long it will take to receive payment. The second concerns the changes taking place currently regarding centralisation of procurement, which are being led by the Minister of State, Deputy Brian Hayes. I agree completely with centralisation of procurement and believe it is a much overdue reform. However, we need to ensure, as we implement this, that we do not move from an environment or market in which we have 1,000 suppliers and one buyer to a model in which we have one supplier for one buyer. Moving the pendulum to that position would result in a structure that is as risky as that from which we are starting. The Minister of State has acknowledged this and has said that what we need to do is to ensure the procurement model to which we move is one that is diverse. Instead of a system under which a small number of companies win all the business, we must select a model under which a larger number of companies, though not as large as currently, win business. The model must ensure these companies are competitive, but it must also ensure that the public body continues to have some degree of choice regarding the company from which it buys.

A concern I have had regarding how this has happened in the past is that we could move from having too many suppliers to having too few. As I have said, that would be risky because it would be inefficient.

I would like to make a point about the implementation of this law. Deputy Donnelly rightly said he hopes we end up with fewer solicitors and barristers being involved in having to interpret the complexity of this area and in the implementation of it. I think the whole area of implementation is crucial. During previous company law debates in this House, I have expressed concern about the scale and size of the bodies that are involved in the implementation of our company law. I refer to the Office of the Director of Corporate Enforcement, for example. I accept that we are making progress through measures like this to ensure our law is clearer and simpler, but we need to make sure an adequate number of the right kind of people are involved in the implementation of this law in the future.

A famous book, The Smartest Guys in the Room, was written about the collapse of a large company in America some years ago. Its title referred to the idea that the company in question always hired the smartest people. Similarly, it is appropriate for us to challenge ourselves to ensure the smartest people in the room when our company law and our financial regulations are being implemented are people who are paid for by the State. We should also have the right number of those people. On the basis of figures I have seen regarding the past implementation of financial regulations and company law, I am concerned that the right number and the right kind of people have not always been involved in doing that on our behalf. As we make progress in tidying and clarifying the law, as we are doing in this Bill, I urge the Minister, Deputy Bruton, to provide that we continue to challenge ourselves to ensure the right resources are in place when that law is being implemented. As we know, the passing of good law is just half the battle. I would argue that the most important thing is to ensure that good law is well implemented.

I am delighted to contribute to the debate on this Bill, which is very welcome. My general view is that new legislation is not always needed. In many cases, the old legislation should be reviewed to see how it can be made fit for purpose and suitable for modern use. Much of the legislation that was introduced over many years is never used, or is not used properly. This Bill will consolidate the various enactments associated with the Companies Act 1963, with which we are all familiar as the source of more or less all our company law. Having operated in this area over many years, I know this legislation will make life much easier. Up to now, practitioners have had to pore over rafts of property legislation and cross-reference it. This Bill will consolidate all aspects of property law. It will improve our competitiveness as a country, make it much easier to do business and reduce red tape.

I would like to comment on a couple of aspects of the legislation that have struck me. Two directors will no longer be required. One director will suffice. That will make it much easier and much more streamlined. Changes have been made over the years. There used to be a requirement for two shareholders and two directors. That was changed to require one shareholder and two directors. It has now gone a stage further. The new approach, involving one shareholder and one director, will make it much more streamlined. The approach being taken with regard to AGMs will also be much more streamlined. It will be a case of ensuring the proper procedure is in place, rather than requiring the holding of meetings that might not be fit for the purposes of the modern company.

I have used the term "examination lite" to describe one of the provisions of the Bill. Companies of a certain size will no longer have to go to the High Court in cases of examinership. If they satisfy two of three criteria - having a balance sheet of less than €4.4 million, having a turnover of less than €8.8 billion and having fewer than 50 employees - they will be able to take the examinership route through the Circuit Court rather than the High Court. That is very much to be welcomed.

I would like to speak generally about the small business sector, particularly in the domestic economy. The Minister will be aware that SMEs are under enormous pressure at present. We are looking at restructuring home loans and mortgages, which is extremely important, but it is just as important to restructure SME loans. Many companies operated soundly for many years until the Celtic tiger era, when the banks insisted on them having property as security. Many of them invested their returns and borrowed heavily to invest in property. Many of them are still making money from their core businesses, even if they are under pressure in that regard, but they are being dragged down by property debt. I ask the Government and the Minister to meet the needs of the SME sector by pushing for the decoupling of SME property debt from the core business of SMEs. Many of these businesses employ large numbers of people. They are being dragged down because they are servicing debt on properties that, in many cases, are not worth a fraction of what was paid for them. The properties in question are likely to be in negative equity and are probably not yielding rents. I feel strongly that this has to be taken on board.

If this economy is to continue the way it is going and to have real and substantial growth, we have to look after our SMEs. While I accept that foreign direct investment is hugely important for our economy, I feel that the SME sector is just as important if not more so. The companies throughout the country that employ five, six, seven or ten people were established by entrepreneurs. We have to create an entrepreneurial culture in which people take risks. Many SMEs are drowning under debt that is related to property rather than to their core business. This must be the next phase of the restructuring of debt. Our national debt has been stabilised. Banking debt is still an issue. Personal debt is being looked at under the insolvency legislation, as is the whole issue with mortgages. The decoupling of SME property debt from the core business of SMEs has to be a key focus for the Government. I will pursue this matter with the Minister, Deputy Bruton, and his colleagues. We have to look at it.

I welcome the fact that the credit guarantee scheme is now up and running. The latest figures suggest that over €3 million has been provided by way of facilities. That has had an impact on over 200 jobs - 180 new jobs and 25 existing jobs which have been maintained. It is extremely important. People are often unaware that every manufacturing job that is created has an indirect impact on another 2.5 jobs. It affects 3.5 jobs in total. It is something that we have to push on.

The JobsPlus initiative will take people off the live register and put them into jobs. The incentive for the employer is to be paid €1 for every €4 it costs to hire someone. That is coming on stream.

I would like to mention something of a more macro nature. We are spending over €20 billion a year on social welfare. There will have to be a greater focus on labour activation measures. We have to look at measures that will get people back to work. I do not doubt that the JobsPlus initiative will feed into that. It will be an extremely important labour activation measure. The creation of jobs is the key challenge nationally and in my constituency of Limerick city.

In the two years since we have come into government, there have been 15 IDA-backed jobs announcements yielding over 1,100 jobs. I compliment the Minister and everyone involved. I will continue to have discussions with the Minister, Deputy Bruton, the IDA and the other stakeholders. With the amalgamation of Limerick city and county, there is now a designated economic director, Mr. Tom Enright, and a joint overall manager, Mr. Con Murray, who are very pro-business and pushing very much the redevelopment of the city and the county. Promoting Limerick as a tremendous destination in which to live and do business is an issue on which I feel strongly.

To put this in context, we must ask how jobs evolve into an area. Last October, I took a phone call from a Mr. Lloyd Nolan from Limerick city, who happens to be the vice president of an American multinational company. He wanted to consolidate the European operations in Limerick so we got him talking to the IDA and discussions took place. One month ago, the Minister, Deputy Bruton, came down for the announcement of 62 high-tech jobs in the middle of Limerick city. That is what it is about. It is not always about the big announcements, although they are extremely important. It is about linking with the diaspora and with people who have connections with an area, and it is about supporting the SME sector.

We have had all the talk about restructuring our national debt, banking debt and personal debt. However, the SME sector, which is the lifeblood of this economy, is under enormous pressure and it is extremely important everyone is aware of this. I ask that a specific policy be put in place to decouple property debt for the SME sector from its real business because I believe this is costing jobs. These companies and businesses are not able to continue to trade because they cannot pay their debts in respect of property loans, which is dragging down their business.

In summary, I congratulate the Minister, Deputy Bruton, and his colleagues on this Bill, which is extremely pro-business and long overdue. Where there is consolidation of existing legislation across a range of sectors, it should be the blueprint for other areas and should be put in place. However, I want the Minister to take on board the point on the SME sector and to tackle its level of debt in order to allow the core businesses to survive and prosper. These are the groups that will, along with FDI, generate the key employment to bring us back to sustainable and healthy long-term growth figures.

I welcome the Bill in principle because I believe it is a constructive effort not only to consolidate vast volumes of former Companies Acts but also to encourage new investment and to make Ireland a more attractive place for both indigenous industry and overseas industry. I am not quite sure I share the sentiments that were expressed in the press release, which is full of superlatives about landmark reforms to slash the cost of operating a company and to make Ireland the best small country in the world in which to do business, but I understand the language and rhetoric which is necessary to draw attention to matters of this sort. I suspect the claims are somewhat over the top but, nevertheless, the Minister's heart is in right place. It is hardly landmark legislation but it certainly tweaks in various places the law as it stands at present, and it certainly makes a very definite effort to produce a buzz and reduce red tape.

One has to be a bit careful when talking about reducing red tape. While it is a useful cliché, one man's red tape is another man's regulation. I hope the reduction of red tape does not mean the rules we have been recently forced to enforce rather more strictly in various areas, particularly the financial area, are now being relaxed again in a way which will make Ireland not just an easier place in which to operate but also somewhere the wrong sort of loose regulation leads to further mischief and difficulties down the road.

My guess - the Minister could help me on this - is that this Bill is introduced with the multinationals and native entrepreneurs in mind. I note the briefing to the Whips specifically mentions that the IDA was consulted on the Bill and my guess is that a vast number of other bodies were also consulted. In the type of climate in which we find ourselves, I believe this is targeted at those areas where we think there is the greatest room for expansion, which I suspect are the areas involving the multinationals and small indigenous industry. Its purpose is to facilitate both those areas and it is stated that some measures will reduce the cost of locating here in that they are an attack on bureaucracy. The Bill goes on to list the amount of professional fees that can be charged.

I am not sure it will impress multinationals all that much. I believe it will improve the atmosphere and make them less irritated by what they see here but I am not sure it will change the big picture which is, by the way, healthy enough and encouraging, although it is getting more difficult. Indeed, the reference in the Minister's press release and in other Government statements on this, namely, that it will improve competitiveness here, may or may not be true and it will certainly not reduce it. However, it fails to look at the real elements which seduce or persuade multinationals to come here. While there are several issues and several moves which could have done that, I do not believe tweaking the law in favour of less red tape is necessarily going to make that large a difference.

My colleague, Deputy Richard Boyd Barrett, regularly suggests there is a case for increasing corporate tax. My guess is that this would scare away a large number of multinationals and they would not go with any apology, they would simply go elsewhere. Competition among corporate tax regimes is very intense, not least in Europe. The Minister might be able to tell me if anyone has done a forensic analysis of what difference it would make to the economy if there were changes in corporate tax, both upwards and downwards - this would only be a projection. My guess is that, in the current atmosphere, the Minister and his colleagues should be looking at a reduction, not an increase, in corporate tax. This is the kind of heresy that always unites the conventional political parties, which say "No, Europe would not tolerate it", or, indeed, "No, the trade unions would not tolerate it", and so it is a no-no. It is said that we are up against it already, fighting with our backs against the wall to retain it at 12.5%.

I am not sure about that. I would have thought that if we flew this flag in Europe, it would cause a certain amount of trouble, but it would also send a signal that there were areas, particularly company law and taxation, in which we were still an independent nation and not frightened to take steps which would offend our European partners, just as they are not frightened of taking steps which offend us. The downside, obviously, would be a loss of revenue, but the benefit would surely be drawing the attention of those multinationals looking at Ireland as really the best small country in which to do business. Were we to reduce the rate by 3.5% to 9%, I would like to see an accurate analysis of the loss of revenue and what the spin-off effects might be in terms of an increase in revenue. I do not expect the Government which is so incredibly committed to the European project and which identifies, to a large extent, with obedience to its European masters to even contemplate this suggestion for the moment, but it is something about which they should think very seriously as having a beneficial economic effect and possibly leading to an increase in revenue. When capital gains tax was reduced from 40% to 20% by a former Minister for Finance, there was uproar led by all the Opposition parties. They stated it was absurd, favoured the rich and was bad for the economy. What happened, of course, was that revenue from capital gains tax rocketed in the years after that decision was made because people were prepared to start selling their assets and moving them around, whereas before they had been prisoners in a capital gains tax trap that they could not get out of. Nobody knows the answer to this - no economist ever knows the answer to anything - but it is possible that a reduction in the corporation tax rate might produce an inflow of foreign investment and companies which would raise revenue. It would certainly improve the employment position and send a message that we did not take diktats from Europe about our tax regime. As such, it is worth considering.

Multinationals look at this country in a jaundiced way, as we do not normally do business the way they do. There is another area in which they are somewhat surprised at how we run our business. I imagine they were surprised at what happened last week when a single trade union managed to sink a Government project which, supposedly, was to save us the necessary €300 million to get us out of the bailout programme and back into the market. I would have thought this would be another big area, not a small one as in the case of this Bill, at which the Government would look. It should look at no longer allowing trade union leaders who are completely out of touch with their flock to dictate the future of Government economic policy. Multinationals are staggered by this. They do not tolerate trade union leaders dictating to them, although they are very sensitive, as they should be, to the wishes and conditions of their workforce. I would have thought a challenge to the leadership of the trade unions by the Government would send a really strong message on the attractions of doing business here. What was important was that the deal was rejected by hard working members against the wishes of the trade union leadership. This tells us that something is going wrong in the power structure and the social partnership agreements when the largest trade union is completely out of touch with its membership. As any US multinational will point out, only 45% of SIPTU members actually voted in the ballot. Of these, a majority rightly went against the wishes of the leadership. This meant that only about one in five voted in favour of the agreement. The Minister may be able to correct me, but I think one in five represents only about 13,000 people who held the union and then the nation to ransom. The leadership carries enormous responsibility if it is going to torpedo Government policy and frighten overseas investors to an extent that we should no longer allow it to do.

There is almost unanimous approval of the measures brought forward in the Bill in their individual form, even if their extent is so limited. Having only one director, as Deputy Kieran O'Donnell noted, is absolutely fine. The practice of having two directors was often abused by a person in having his or her spouse on the board and getting him or her to sign something every year, even though the person not directly involved had no idea of what was going on. The proposed measure recognises the reality.

The idea of not having a physical AGM is rather like the ideal of incorporeal Cabinet meetings, of which there was one in 2008 that is now infamous. Facilitating AGMs, both private and public, is very sensible in principle, but the Minister will be aware of a certain practice that has been increasing in companies. Directors sit down, read through pre-written minutes, tick the boxes and say they are fine - that what is written down happened. One is not very far away from people saying this is what happened, even though there was no meeting. One then gets to a stage where what secretaries think ought to happen is written down and one gets one, three or four directors to sign it. One then has retrospective minutes, which are not unknown. If one does not have a physical AGM, one might not have physical meetings at all and move into the world of creative board meetings, which might not be the best possible route to go down.

The idea of memorandums and articles of association being merged into one document is very sensible. I have never seen a need for two documents and I am ashamed to say I am not quite sure what the difference between the two is.

The idea of codifying directors' duties is very important because many directors in private and public companies do not know what their duties are. They tend to be dominated by one or two people on the board. A large number of them do not do a proper job; it is a sinecure and they suddenly find they have extraordinary responsibilities they did not realise they had and are liable for things for which they did not want to be liable. Being a director of a company, both non-executive and executive, is a serious job.

It is important that this is made absolutely clear to them.

There is a missed opportunity for the Bill to provide more radical measures. There are references to the liquidator and the need for liquidators to be approved by various self-regulatory bodies, specifically, the accountancy body, a body regulating liquidators or the Law Society.

It is high time the Government looked at the overall effectiveness of self-regulation. It has set up bodies which are sometimes effective such as IASA which looks after the accountants and the property regulation body which takes away certain powers from auctioneers. However, self-regulation has failed in Ireland.

Not that long ago, for fun, I became an auctioneer. I was not even a member of a body. I just went through the system of going down to the court and putting in a bond. I suddenly became capable of moving into this wild, unpoliced, unregulated jungle, buying and selling houses, handling people's money without any particular discipline, without being a member of a regulatory body. I did not practise, I hasten to say, at any stage, because that would have been utterly irresponsible. However, I was allowed to do so. It would have been utterly wrong but people with equal qualifications to mine are still practising as so-called auctioneers and valuers who should not be allowed near the sale of a house.

Two auctioneering bodies were set up some years ago to regulate the industry. Above all others, that exposed the very significant flaw in regulation in Ireland, in particular, for professional bodies. These bodies were set up not to look after the interests of consumers - or the end-users as they are known in this Bill - but to protect the industry itself. Both these bodies were very close to running fiascoes in terms of the disciplining of their members which virtually never happened. Rules, regulations or ethics were not imposed or were certainly significant by their absence. One only needs to see the absolutely unfettered, unhindered activity of auctioneers, valuers and estate agents during the time of the property boom, to know what I am talking about. They were issuing guide prices and exaggerated claims which were completely unchecked, unpoliced and connived in by their bodies. The result was a fuelling of the boom and the public were misled into believing that houses were of far greater or sometimes lesser value than was the case. That was the result of having no proper regulation.

We are enjoying the Deputy's stories about auctioneering. However, he is probably coming close to the end of his time now, if not overtime.

I will conclude. I have been providing an example of how serious regulation is needed in order to give confidence to entrepreneurs and to people overseas. A similar situation existed in the accountancy profession because the overseeing body was a farce. I will not refer to the high profile individuals who were members of that body but there was clear evidence produced by IASA itself since it was set up, that the previous body was running the regulation of accountants for its own benefit and not for that of the consumer. There are several well-documented cases which have been appealed to IASA. It has found against decisions made by the accountancy disciplinary body and these decisions have been reversed. Top accountancy firms who beforehand were regarded as untouchables by that body because of their strength, have been fined six-figure sums.

This is a very progressive Bill which will make Ireland a better country in which to do business. It will enable more businesses to start up and grow and so provide the necessary jobs stimulus which is urgently required. The passing of this legislation will implement a series of changes aimed at reducing the red tape and the administrative burdens imposed on business. It will make company law more accessible for the end-user and easier both in its application and in compliance. It will consolidate existing company law legislation into a single Act which is a welcome initiative. The governance procedure should make it easier for a company to do business. It will reduce the complexity of doing business with other companies.

Local community groups and small to medium businesses are vital groups which avail of the limited company mechanism. Leader funding has transformed rural Ireland in particular and has invigorated many communities and small businesses with the necessary support and grant aid for community projects and facilities. There is a minimum of red tape and bureaucracy in accessing these funds from the partnership bodies. The approach used is from the bottom up rather than the norm in business which is often from the top down. The people are the promoters and in many cases it is voluntary effort. I rate Leader to be the best scheme of funding. I admire the democratic administration of the scheme. The funds are distributed in a business-like manner. It has transformed our communities by enabling the progression of projects.

The facilities and infrastructural development such as the partnership companies have provided a lifeline to many entrepreneurs who have been enabled to set up and grow their small businesses in their communities. These small companies provide jobs and widespread gain for the local area. In order to draw down Leader funding, community groups and small businesses are required to form companies limited by guarantee under EU regulation. These companies will benefit from the streamlining of the legislation in this Bill. Currently there are two benefits to these companies. I refer to the separate legal entity dealing with the banks which is subject to legislation.

I refer to the benefits of limited liability. Many of these companies were established by community groups with directors who started out as local committee officers. To draw down EU funding under legislation and the Leader programme, they had to incorporate. These people put themselves to the forefront on behalf of their communities. The Companies Act and the requirement to form a limited company is a protection for ordinary people who put themselves at risk for the greater good of the community but there have been alarming instances of breaches of the protections offered under the current legislation. The courts have been lifting the corporate veil to fix directors with liability in some cases. People are then faced with the burden of responsibility for the debts of companies. The current Act is being broken in certain cases and the courts are setting aside the liability benefit. There is a specific need to include in the Bill a strong provision to ensure that it provides definitive protection and clarity as members of voluntary bodies should not have to endure the repercussions of company failure. Many voluntary directors have only a small income. Their home may be their only asset or perhaps a bit of land. They may be struggling with the weather conditions we are getting in the south west in particular. Hopefully, smaller farmers will not be put out of business. They have enough obstacles to preserve their family holdings but are an example of the type of people who sit on local boards for the good of communities. Either limited liability exists or it does not. I ask the Minister to ensure the Bill is clear on the matter of the protection that should be afforded at all times. If it is not, many people will be reluctant to come forward to form companies to obtain funding for local projects.

I am glad the Minister, Deputy Bruton, is present. His colleague, the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, has proposals before Government to rearrange the existing Leader companies and to transfer a sizeable element of their functions to local authorities. It is a retrograde step. I have served on two Leader company boards in my county. At all stages, they were accessible and co-operative in providing services to the public, including step-by-step advice and seed money for people with business plans. The companies have invigorated and transformed rural Ireland. Local authorities have been represented on them through the years, which is how I became a member of one. The boards are very democratic and representative of communities. In many instances, local voluntary committees were made up of people of goodwill and boards were composed on a voluntary basis also. They have been workable, practical and creative. The Minister, Deputy Bruton, has been very proactive in seeking to make it easier for people to create employment and has done excellent work to remove obstacles and red tape and to iron out creases. It is evident that local partnership companies have been accessible and approachable. Without criticising anyone, proposals that might have faced a mountain of obstacles before other bodies have been recognised by the partnerships. They have been the best mechanism to simplify matters and cut out red tape to get the maximum funding for small businesses and communities.

I ask the Minister to convey what I say to Cabinet. Representatives of partnership bodies have come to the Houses of the Oireachtas and held a well-attended meeting with Members. It provided us with a greater insight into what they are achieving. The management and staff of the companies are progressing and developing as time goes on and, at this stage, have real expertise. I ask that if changes are made, the basic core of the bodies is maintained. They represent the best model to deliver vital funding. There are several examples of the massive benefits they have brought to communities socially, physically and infrastructurally as well as in terms of job creation. They have delivered wonderful amenities and facilities for all to local communities. With local authorities having less money, partnership bodies are coming to the rescue to provide playgrounds and amenities for the elderly, including day-care centres. I need not set out everything they have provided. The Minister will acknowledge the abundant success the partnerships have achieved to support, mentor and fund individuals and smaller employers to build their businesses to the maximum. I am sure the Minister will acknowledge that the partnerships are at the forefront with the job creation agencies in delivering to smaller communities.

The spin-off might be someone setting up a business or expanding a business. There is a spin-off for the local community as it keeps people around and keeps the life in the community. Other little businesses benefit and it affects everyone who lives in the area. Partnership bodies are truly representative of the regions they service. In Kerry, there is the South Kerry Development Partnership, the North & East Kerry Development partnership and the eastern side is served by Duhallow, which overlaps north-west Cork and parts of east Kerry. They all work hand in hand. There is great co-operation, vision and foresight. Their trained staff are competent and, on a business rating, they are at the top level. If there is an impact, it is a shame if it causes their service to deteriorate. At the moment, funding is dormant and there is a moratorium imposed upon them while the Government deliberates on what will happen. It is shameful that the state of the economy means huge moneys have been approved by these bodies but cannot be accessed. Money cannot be given to the many projects awaiting funding, in particular job creation projects and amenities needed by the communities that have applied. The projects are ready to go and everything has been approved in the democratic fashion in which they work. What is happening is unnecessary. I ask the Government to allow these excellent partnerships to proceed immediately and provide the money to the people waiting. Some of the people may contemplate leaving the country. It would be a shame to see people leaving their locations where we need people to maintain the life in the place. GAA teams are suffering, as are all sporting bodies, as they lose people and try to amalgamate teams to keep their local clubs going. A Government body delivering in an excellent way should not be hindered or obstructed in carrying out its function. Perhaps this can be rectified in the immediate future by the Government.

A matter brought to my attention concerns accountants. A constituent is a qualified accountant and a local employer in south Kerry. He owns a firm of chartered accountants that employs six people. He referred to the Companies Bill and told me the qualified accountants in Ireland are disappointed the Bill does not include a clause to give protection to the term "accountant". It has been promised by successive Governments. Titles such as doctor, dentist, and solicitor are protected so that only people qualified and registered with supervisory bodies can use these titles to trade. That is not case for accountants. Anyone can set up an office and refer to himself or herself as an accountant. This is misleading to the public and is anti-competitive. Qualified accountants are required to be licensed and insured whereas unqualified accountants are not regulated and they compete against registered accountants for clients. Various accounting institutes have campaigned for this for some time and have sent a letter to all qualified accountants sitting in Dáil Éireann. The accountant would be grateful if the Oireachtas raises the issue in the Companies Bill debate. Up to 40 qualified accounting firms operate in County Kerry and provide much-needed employment.

There is no protection because anyone can give themselves the title of accountant. The competition is unregulated. The Revenue Commissioners are accepting anything provided by these people acting as agents. There is no provision requiring qualifications and it should be based on a recognised and certified qualification. The plea made by my constituent on behalf of regulated accountants is that this be taken into account and provision made within the Bill. I ask for it to be given full consideration. It is an unregulated area in an area full of regulations. We need to change these aspects of the Bill.

I received an entrepreneurship report from the Institute of Certified Public Accountants. I am sure the Minister has received it. It is an excellent document, with positive proposals. It has been circulated to all Oireachtas Members. All job creation agencies should take some time to pick out the excellent suggestions in it. We can help these people within the Companies Bill. The Minister is striving to make it easier for people to set up businesses and develop their business. The document states:

No one or nobody supports the risk takers. Entrepreneurs have to comply with so much red tape and regulation, employment, revenue, health and safety, insurances, rates, and pays for all these things, including exorbitant bank charges. Where is the support? Several others [who attended the meeting] agreed, saying there is no incentive for people to take risks in starting a business.

Some of the work we are doing in trying to streamline matters requires amendment of existing Bills. Our work should address the concerns of these people. The most recognisable entrepreneur in Ireland is Jerry Kennelly, who has won national and international awards.

He is a wonderful entrepreneur and business person. He is based in Killorglin and is a role model for people in this country. I refer also to Edmond Harty and Dairymaster. This hi-tech business is a major exporter and is a huge employer, like Jerry Kennelly. These people are role models and we need more of them. We should encourage people who have innovative and creative ideas and who are proactive and who will pave the way for modern Ireland to come forward.

This document also states that entrepreneurship should be placed on the school curriculum at primary and secondary levels. The overall aim should be to educate students about the value of entrepreneurship and the needs of enterprise so that they are better equipped to support an enterprise culture in later life. Will the Minister speak to the Minister for Education and Skills? A multipurpose approach could be taken by the Cabinet as this is a very good suggestion.

The document also states that consideration should be given to introducing a specific entrepreneurship module in the leaving certificate business and accounting courses and in appropriate third level courses, that third level institutes should consider establishing entrepreneurship promotion units to identify and nurture potential entrepreneurs at undergraduate level and develop stronger linkages with the SME community and that self-employed individuals and company managers should be allowed to pay the full rate of PRSI and be eligible for jobseeker's benefit.

Jerry Kennelly said the enterprise boards are probably the most useful part of the State support system. He said the first help he got was from an enterprise board. I commend the Minister on the special funding he has given female entrepreneurs. This is a wonderful initiative and it will be hugely successful in incentivising female business people to come forward and lead the way.

I will start with Deputy Tom Fleming's contribution. I recognise the point he made about recognition of the term "accountant". This will have to be given some thought. The UK does not recognise it either. It was considered previously but some concerns were raised by the Competition Authority and the Office of the Director of Corporate Enforcement as to whether it might be unnecessary regulation and interfering with free competition. There are two sides to this argument and perhaps we could weigh up those arguments and consider the issue in further detail on Committee Stage.

I agree wholeheartedly with Deputy Fleming that we need to celebrate entrepreneurship. The idea of this Bill is not only to celebrate it but to give more businesses the protection of company law. Limited liability is a protection being endowed by the State on small businesses in recognition of the courage and ingenuity of what they are trying to do to create jobs and opportunities. We are trying to make it simpler for such people to set up a company which gives them protection.

I would not care to comment on the issues around Leader programmes as I am not knowledgeable enough about their work, although I know they do very good work. My Department is seeking to move from the 35 independent county enterprise boards to a new structure with a national centre of excellence in Enterprise Ireland and locating them in the local authority. The reason we are doing that is that we believe it will be a win-win situation. We will get a high quality national driver of quality, training and best practice but by bringing them to the local authority where they can draw in the local authority and its powerful influence across the community to create a better business environment. That is the thinking behind what we are doing. Perhaps this issue needs to be debated. It is not about killing community support for enterprise, variety or the very different ways communities approach their challenges. It is about getting profession practice into the way we support those who start up.

Deputy Shane Ross, while very generous in welcoming the Bill, questioned whether it was a landmark. I suppose that is a matter for debate. In defence of describing it a landmark, I would say there are well over 200,000 small businesses in the country and 16,000 incorporate every year. Some 24,000 people start up new businesses every year. Many people's lives will be affected by this and if we can make it a more streamlined process and much easier for them to understand, to get protection for their businesses and to raise loans, it is not unfair to call it landmark. Obviously, we will have to prove it is landmark in its operation but my officials and the company law review group have put in a huge amount of work into it, which they have not done lightly. They have done so because they believe this can make a difference.

Some described Ireland's ambition to be the Delaware of Europe. Delaware is a state which is recognised as being really good for companies which want to form and to have a good compliant approach and an easy and flexible way to do business. That is the ambition behind this.

Many Deputies raised concerns that with the changes, we need to invest in making people aware of the new regime. We are definitely alert to that. The Companies Registration Office will work on that, as will others. There is already active engagement through conferences and legal groups to ensure word gets out.

Some Deputies gave out about the length and complexity of the Bill. When I came into this House, a Deputy said that if one could not say what one had to say in five minutes, one should not be in this House but the same Deputy spoke for an hour. Sometimes things cannot be said in a short letter. Some 1,429 sections may seem like a lot but we believe getting it right, codifying it correctly, making it accessible to people and not having to jig around with 16 pieces of legislation to find out one's obligations is worth the effort. Notwithstanding Deputy Mattie McGrath's comments, we will push on and prove to him that this will be good.

Deputy Tóibín raised the issue of the designated activity companies. This provision allows existing companies, with their objects clause, to continue. Perhaps we can debate this on Committee Stage but there are some which will want to retain their existing status and this is to facilitate them. There are cases where that will be useful but we will debate it on Committee Stage so the Deputy can be assured of the robustness of what we are doing.

Deputy Tóibín also raised the issue of directors' obligations. As we move to one director, he does not want it to mean a diminution in the obligations of directors. That is certainly not the intention. We would argue that a director whose core business is running the business is better in that there is a clear line of responsibility and he or she is not forced to have directors who are purely passengers. We also sought to codify the duties more and make them easier to understand. They are built around eight fiduciary duties, including disclosure of conflicts of interest, the relationship with auditors and the director's compliance statement.

In each case, we sought to have a provision that is robust but easy to understand and comply with. The easier it is to understand, the more natural it is to become compliant. It is not a question of trying to find non-compliance but of making compliance easier.

Deputy Calleary asked what savings will accrue from the Bill and whether technology can be used more effectively. The Credit Review Office is trying to facilitate increased use of technology, including the use of e-forms and e-filing. It has done so by reducing fees on such filing. There is now a considerable compliance rate and a reduction in cost as a consequence of e-filing. We are dispensing with the need to have formal AGMs, for example, and this will result in savings.

Deputies Halligan, Tóibín and others raised the issue of employees who are caught in circumstances of liquidation. The law accords the rank of "preferential creditor" to workers. Workers have the same status as the Revenue Commissioners. The Revenue Commissioners must fund all public services and should, therefore, have priority with regard to bills, but workers have a similar status. Deputy Halligan asked whether workers can get more than the wages they are due and the statutory redundancy payment when a company is wound up. The protection is in respect of statutory redundancy but wages, salaries, sick leave payments, etc., are all protected and given priority.

A number of Deputies raised the issue of late payments, which are obviously a burden on companies. In March of this year, we transposed a directive from the European Union in this area. We are trying to have a voluntary code of conduct. One person's late payment is another person's credit, and many of the arrangements are business-to-business arrangements. We need to get businesses to agree to adopt a proper code. There has been progress on such voluntary codes in other jurisdictions. We need to push on and determine whether we can have an approach of that nature.

Deputy McGrath raised the issue of company directors not being able to represent themselves in court. That is the position at present but the Company Law Review Group is to examine the matter as part of its programme of work this year. Perhaps later in the year we will be able to report on that.

Many Members welcomed the proposal to make it easy to access examinership by allowing cases in the Circuit Court rather than the High Court. We are pushing ahead with this in the Bill. The Company Law Review Group's report will look beyond that to determine whether there is scope for reducing the role of the courts in examinership further, for example by having an examiner appointed by administrative decision rather than by judicial decision. There could be developments in this regard if it stands up to scrutiny on examination. I believe it would be welcomed by many people.

A number of other issues were raised. I hope we will be able to deal with them on Committee Stage. The question of resources for the ODCE was raised. Deputy Paschal Donohoe stressed the importance of having high-quality people in a position to carry out enforcement. All regulatory authorities are affected by the employment control framework and the reduction in size of the public service. There is pressure in all areas. In the case of the investigations into banking, additional resources had to be drafted in to ensure the relevant cases could be examined exhaustively. We are always conscious that enforcement is important and have recently increased the strength of the Competition Authority despite the pressure on resources because, like the troika, we believe there should be an effective enforcement policy.

Deputy Shane Ross raised doubts about there being no reference to AGMs. The assurance in the Bill is that what was described could only happen if all the members agreed in writing. Therefore, it is not something that can be done idly or lightly. It applies only to the new-model private company limited by shares. It does not apply in every company. Perhaps on Committee Stage we can tease out those concerns.

A number of Deputies, including Deputy Healy-Rae, raised the issue of the audit exemption. According to the Bill, the conditions a small company must meet are such that the balance sheet must not exceed €4.4 million, the turnover must not exceed €8.8 million, and the average number of employees must not exceed 50.

Deputy Kieran O'Donnell raised the issue of viable SMEs that are being damaged by having made bad property plays. This is a valid concern and has been highlighted on a number of occasions in the reports of Mr. John Trethowan of the Credit Review Office. The Central Bank intends to develop targets for companies in difficulty just as it has done for mortgage holders in difficulty. This has been flagged as a direction in which we are moving. In the longer term, banks must face up to the bad decisions. We cannot have zombie banks, as they used to be called, or circumstances in which a failure to confront losses results in banks' being unable to do the job of a bank - that is, lending to those who need money to create opportunities. Deputy Kieran O'Donnell raised an important issue and it is obviously on the agenda of the Government. As with the mortgage issue, it is not easy or straightforward to resolve. Every case is different, and banks will be required to develop an approach that is appropriate. Clearly, however, there will be opportunities if we can address the problems of businesses that are basically sound but have other problems.

Deputy Mick Wallace, who is present, referred to raising awareness among existing directors of companies about the provisions of the Bill and directors' duties. He asked whether the Credit Review Office and the ODCE would undertake this role. Both bodies are developing material to make it easier for people to understand their obligations. That will definitely be important. As we proceed with the legislation, we will be enhancing the awareness campaign. The Bill makes provision for people who wish to retain their old arrangements. There are transition opportunities and people will not find the rug pulled entirely from under them on a given day. There is some flexibility. People will see the merit of moving to the new, simpler arrangements.

Many other issues were raised, including upward-only rent reviews, jobs in the retail sector and broadband. They are not really central to this legislation. They are all valid, none the less, and I will be happy to deal with them on another occasion.

I thank the Members who participated in this debate. By and large, the Bill was universally welcomed. I appreciate Deputy Dara Calleary’s welcome for and understanding of the work that has gone into it. He dealt with this as a Minister of State in my Department. We will have a bit of a marathon on Committee Stage. We will certainly to get to know one another very well, if we do not already.

I thank my officials and the company law review group for their work on the Bill. I also thank Members of the House for their constructive contributions. I look forward to the debate on Committee Stage and hope the final result will be legislation that will help business and employment creation, thereby living up to the Taoiseach's ambition that Ireland will be the best small country in the world in which to do business by 2016. We will drive forward as best we can.

Question put and agreed to.