I ask the Minister of State to move amendment No. 152.
Companies Bill 2012: Report Stage (Resumed)
Before I move that amendment, I want to make a note for the record. There was a mix-up on amendment No. 149. I explained the purpose of this amendment to the House believing that we were on amendment No. 149. However, we had, in fact, moved on to amendment No. 150; we were going that quickly. Therefore, I would like to note for the record that the explanation given at amendment No. 150 should have been attributed to amendment No. 149. There is no knock-on effect as amendments Nos. 150 and 151 were grouped and discussed together, so the explanation provided on amendment No. 151 refers also to amendment No. 150.
I thank the Minister of State.
I move amendment No. 152:
In page 383, lines 23 and 24, to delete all words from and including “after” in line 23 down to and including “creditor,” in line 24 and substitute the following:
“after giving notice to the person who, for the time being, stands registered as the person entitled to such charge or to the judgment creditor,”.
The purpose of this amendment is to allow notice of satisfaction of a charge to be served upon the person when registered as entitled to the charge where the Companies Registration Office has been statutorily notified that there has been a change of lender. As the Bill stands, the notice of satisfaction of a charge must be given to the person to whom the charge was "originally given". This is inappropriate given that updating of the register will be allowed under section 410(8) of the Bill.
It is more appropriate for the notice of satisfaction of charge to be served on the person then registered as entitled to the charge as if there has been a charge, the original holder will no longer have an interest.
Amendments Nos. 153 and 170 are related and may be discussed together by agreement.
I move amendment No. 153:
In page 391, lines 34 and 35, to delete "and by the person who is at that date the secretary".
The purpose of these amendments is to remove the mandatory requirement for the secretary to sign the statement of affairs in cases where the directors are obliged to give such a statement to the receiver or liquidator.
I move amendment No. 154:
In page 405, line 16, after "application" to insert ", at any time,".
The purpose of the amendment is to clarify that a court may on application and at any time order a scheme of meetings of the creditors or members to be summoned in such a manner as the court directs. The court is given discretion to order scheme meetings to be summoned in such a manner as it directs. This section deals with the convening of scheme meetings by directors and the power of the court to summon such meetings.
Amendments Nos. 155 and 156 are cognate and may be discussed together by agreement.
I move amendment No. 155:
In page 408, lines 14 and 15, to delete "and of the assets or liabilities" and substitute ", assets or liabilities".
The purpose of these minor typographical amendments is to bring the section in line with existing law regarding the undertaking assets and liabilities of a company in the reconstruction and amalgamation of a company.
I move amendment No. 156:
In page 408, lines 21 and 22, to delete "and of the assets or liabilities" and substitute ", assets or liabilities".
The purpose of amendment No. 156 is to remove the specific cross reference to chapter 15 of Part 11. The provisions of chapter 15 of Part 11 do not apply to acquisitions.
I move amendment No. 157:
In page 409, to delete line 36.
Forgive me - I am racing ahead of myself again. For clarification, the explanation I previously gave was the explanation for amendment No. 157.
I move amendment No. 158:
In page 412, line 12, to delete "her." and substitute the following:
(iv) if the conditions specified in subsection (2) are satisfied, by electronic means.
(2) The conditions referred to in subsection (1)(b)(iv) are—
(a) the shareholder has consented in writing to the offeror's using electronic means to give notices in relation to him or her,
(b) at the time the electronic means are used to give the notice or notices in relation to the shareholder, no notice in writing has been received by the offeror from the shareholder stating he or she has withdrawn the consent referred to in paragraph (a), and
(c) the particular means used to give the notice or notices electronically are those that the shareholder has consented to.".
I move amendment No. 159:
In page 413, line 14, to delete "section 458(7)" and substitute "section 458(7)(a)".
I move amendment No. 160:
In page 413, line 20, after "shall" to insert the following:
", within 30 days after the date on which the offeror becomes so bound or, if an application to the court by a dissenting shareholder is then pending, as soon as may be after that application is disposed of".
This amendment specifies a time period within which subsection 5 must be complied with. The section as it stands currently is silent in this regard.
Does putting a time period in represent a change to current legislation?
The section is based on existing law. Therefore, in the interests of certainty and maintaining existing law, the amendment reinstates the original time limit of 30 days.
I move amendment No. 161:
In page 424, between lines 30 and 31, to insert the following:
"(a) section 480 (preservation of rights of holders of securities),".
The purpose of this amendment is to include a reference to the application of section 480 where the summary approval procedure is employed. As the Bill currently stands, the application of section of section 480 is excluded. This is not what was intended. Without the amendment, the rights of the creditors may be infringed.
Amendments Nos. 162 to 165, inclusive, and No. 167 are related and may be discussed together by agreement.
I move amendment No. 162:
In page 450, to delete lines 25 and 26 and substitute the following:
"(b) in the case of a company that, in respect of the latest financial year of the company that has ended prior to the date of the presentation of the petition, fell to be treated as a small company by virtue of section 351, the Circuit Court,".
The purpose of these amendments is to consolidate section 2 of the Companies (Miscellaneous Provisions) Act 2013 into this Bill.
I move amendment No. 163:
In page 450, line 28, before "all" to insert "subject to subsection (9),".
I move amendment No. 164:
In page 450, between lines 35 and 36, to insert the following:
"(8) For the purpose of paragraph (b) of subsection (7), if the latest financial year of the company concerned ended within 3 months prior to the date of the presentation of the petition, the reference in that paragraph to the latest financial year of the company shall be read as a reference to the financial year of the company that preceded its latest financial year (but that reference shall only be so read if that preceding financial year ended no more than 15 months prior to the date of the presentation of the petition).
(9) Subsection (7) does not confer on the Circuit Court any jurisdiction that is provided under this Part to hear a petition for the winding up of, or to wind up, a company.".
I move amendment No. 165:
In page 451, line 8, to delete "or certificate".
I move amendment No. 166:
In page 451, line 25, to delete "licensed bank" and substitute "credit institution".
I move amendment No. 167:
In page 456, to delete lines 16 to 19 and substitute the following:
"(8) The Circuit Court shall only have jurisdiction to make an order referred to in subsection (1)(a) or (b) if the related company is a company that, in respect of the latest financial year of it that has ended prior to the relevant time referred to in subsection (1), fell to be treated as a small company by virtue of section 351.
(9) For the purposes of subsection (8), if the latest financial year of the company concerned ended within 3 months prior to the relevant time referred to in subsection (1), the reference in subsection (8) to the latest financial year of the company shall be read as a reference to the financial year of the company that preceded its latest financial year (but that reference shall only be so read if that preceding financial year ended no more than 15 months prior to the relevant time referred to in subsection (1)).".
Amendments Nos. 168, 169 and 175 are related and may be discussed together by agreement.
I move amendment No. 168:
In page 488, line 2, after "due," to insert "or in the case of an employee or a group of employees a sum exceeding €1,500,".
Legislation is complex at the best of times but this Bill is so cumbersome, it is very difficult to have proper oversight. I ask the Government not to produce any Bills this size again. Will the Minister of State be accepting any amendments provided by the Opposition?
Some of these amendments relate to the amounts of money in respect of which people can act. There is a significant change that relates specifically to the minimum amount of indebtedness entitling a creditor to petition a company that is wound up and that increases the amount from €1,269 to €10,000. At the moment, anybody who owes over that initial figure can petition the wind-up of a company. This amount has been increased to €10,000, which will impact unfairly on lower income employees who obviously do not have €10,000 of indebtedness and will render them unable to act.
Amendment No. 169 seeks the insertion of a formula of words which would increase the responsibility of the individuals working within the firm. The amendment states that:
Where a breach of employment law is committed by a body corporate or by a person acting on behalf of a body corporate and is proved to have been so committed with the consent, connivance or approval of, or to have been attributable to any neglect on the part of, a person who, when the breach was committed, was a director, manager, secretary or other similar officer of the body corporate or a person who was purporting to act in any such capacity, that person (as well as the body corporate) shall be liable to be proceeded against as if guilty of the breach committed by the body corporate.
The amendment seeks to do what it says on the tin. It seeks to hold people to account.
Amendment No. 175 focuses on the issues of preferential creditors in a wind-up. While it appears to broadly reflect the provisions of section 285 of the 1963 Act, the total amount payable to the employee creditor has been increased from €300 to €10,000 in 2014. In reality, this is very low and we could do with raising it to a higher figure, for example, €40,000, which is just above the average industrial wage.
In respect of the question posed by Deputy Tóibín as to whether or not we will take any amendments on board, the amendments are put forward and we respond to them. We have taken a clear position on them and believe that the legislative process is such that it produces robust legislation. However, there are some points we can consider for Seanad Stage in the Seanad. We may look at the court of jurisdiction, which is an area raised by the Deputy in connection with employee issues.
In response to the amendments put forward as they are grouped, we are not in favour of adopting these amendments. We must keep reiterating that the Bill is only concerned with company law. In general terms, company law concerns itself with the fiduciary duties a director owes to the company alone while recognising that a director ought to have regard to the interests of his or her employees. It would be wholly inappropriate to include the proposed provisions in the Bill.
Legislation governing employee rights should be considered in the context of employment law. We have stated this several times in the context of other amendments tabled by Opposition Deputies. By addressing such a matter in a company Bill, the provision is not providing protection for all employees, such as sole traders or those working in partnerships.
Second, employment law already provides for redress in less cumbersome and costly fora than the High Court. Third, and equally importantly, it must also be borne in mind that company law must balance the rights of all creditors, many of whom are employers in their own right, in winding-up situations. I appreciate what the Deputy is attempting to achieve with these proposed amendments but the simple fact is that company law is not the correct vehicle for these ambitions. Therefore, we are not in favour of these amendments.
Amendment No. 168 suggests that a company may be wound up in court where it owes an employee or a group of employees more than €1,500. The Bill sets the limit at €10,000, as it was considered that a greater balance and proportionality must be achieved in circumstances where the severe sanction of wind-up is concerned. The section does not distinguish between an employee and any other creditor. In the circumstances, any creditor is entitled to issue a letter demanding payment and if, after 21 days, such payment has not been received the creditor is entitled to petition the High Court. I am sure the Deputies present can appreciate that petitioning the High Court is not a simple or low-cost exercise. It would have to be questioned whether winding-up is really the most effective way to settle a debt of €1,500. It must also be borne in mind that there are provisions in both employment and health and safety law, alongside common law remedies, which already provide for the type of situation described. For example, the Payment of Wages Act 1991 provides more efficient remedies for employees who have not been paid their wages than an attempt to have the company wound up in the High Court, with all of the associated costs.
Amendment No. 169 would fail in substance as prosecutions thereunder would be doomed to fail due to the ambiguity of the phrase "breaches of employment law". There is no indication as to what is meant by this. Such provisions are workable but only in the context of the specific and appropriate enactment, where the transgressions are clearly identified or identifiable. Finally, the amendment proposes that the separate legal personality of the company would be proceeded against for a transgression of civil law rather than criminal law. In all of the other circumstances where this phrase is used, as with health and safety legislation, for example, it requires a criminal offence.
Amendment No. 175 suggests that the value of the preferential treatment of employees should be increased to €40,000. The principal benefactors of section 622 are the employees of the company and the Revenue Commissioners. The period for which the calculation is based, in the context of employee salaries or wages in respect of services rendered, is four months before an order to wind up, the appointment of a provisional liquidator or a passing of the resolution for the winding up of the company is made. The sum of €10,000 is considered to offer sufficient protection for employees in these circumstances.
I understand the Deputy's intention with these amendments. However, we also need to consider that there are other creditors whose rights must be protected in a winding-up situation. The Bill seeks to offer a fair balance to all.
In the context of amendment No. 169, the Minister of State pointed out that the transgressions are not identified within the amendment. If those transgressions were identified in an amendment, would the Minister of State have a change of heart during the course of the debate in the Seanad on this Bill? I understand that the Minister of State is not seeking to create a body of employment law within this particular Bill. However, the Bill offers us an opportunity to strengthen employee rights and to ensure that individuals who have been mistreated by unscrupulous employers and companies have an opportunity to hold those companies to account - for reasonable amounts of money - in the wind-up process and elsewhere. While the Minister of State is correct that an approach to the High Court would be a very unwieldy and difficult activity for an individual to proceed with, the very fact that employees' rights are written in law would encourage most companies to take those rights more seriously. Therefore, the law in its own right serves as a guideline for the proper functioning of society. It is only in a small minority of cases that it is necessary to pursue that law through the courts.
How would one set out in a schedule what constitutes a transgression? There is a multitude, if not an infinite amount, of potential transgressions. Perhaps the Deputy could articulate exactly how he would propose to do that in advance of the debate in the Seanad. Without being facetious, perhaps he would also outline why the transgressions were not articulated in his amendment.
I do not want to labour the point but we did not do that because, as the Minister of State pointed out, there could be a multitude of transgressions, most of which are encompassed within existing employment law. That is why the reference to employment law is in the amendment.
Is the Deputy pressing the amendment?
Yes, I am.
Excuse me, but the Deputy makes the point for us in his last submission. Transgressions, where they occur, are already sanctioned. For instance, health and safety related transgressions are defined and sanctioned within health and safety law. The same applies to employment law. Having said that, I respect the point the Deputy is making and accept that he wishes to press the amendment.
I move amendment No. 169:
In page 488, between lines 20 and 21, to insert the following:
“572. Where a breach of employment law is committed by a body corporate or by a person acting on behalf of a body corporate and is proved to have been so committed with the consent, connivance or approval of, or to have been attributable to any neglect on the part of, a person who, when the breach was committed, was a director, manager, secretary or other similar officer of the body corporate or a person who was purporting to act in any such capacity, that person (as well as the body corporate) shall be liable to be proceeded against as if guilty of the breach committed by the body corporate.”.
I move amendment No. 170:
In page 498, line 38, to delete “, and by the person who is at that date the secretary,”.
I move amendment No. 171:
In page 503, line 37, to delete “licensed bank” and substitute “credit institution”.
I move amendment No. 172:
In page 505, line 6, to delete “licensed bank” and substitute “credit institution”.
I move amendment No. 173:
In page 506, line 35, to delete “section 667(3)” and substitute “section 678(3)”.
The purpose of this amendment is to correct an incorrect reference in section 603(2)(b).
I move amendment No. 174:
In page 522, to delete lines 9 to 18 and substitute the following:
“(ii) each tax assessable on, in relation to, or by the company under the Taxes Consolidation Act 1997 in respect of, or apportioned on a time basis to, a period ending on or before the relevant date, for which the tax concerned is due and payable, but the particular period (in respect of which priority under this subparagraph for the tax concerned is claimed) shall not be of more than 12 months duration;”.
The purpose of this amendment is to further clarify the 12 month priority period in section 622(2)(a)(ii). The wording used in the Committee Stage amendment was identified as being potentially problematic as it changed the common law position on this matter. This amendment purports to revert to the current established practice whereby the Revenue Commissioners determine the appropriate 12 month period.
I move amendment No. 175:
In page 523, line 42, to delete “€10,000” and substitute “€40,000”.
I move amendment No. 176:
In page 586, line 39, to delete “30 days” and substitute “3 months”.
The purpose of the amendment is to extend the time period of validity for the Revenue Commissioners' letter of no objection in a voluntary strike off.
I move amendment No. 177:
In page 602, line 18, to delete “licensed bank” and substitute “credit institution”.
I move amendment No. 178:
In page 603, line 5, to delete “section 749(1)” and substitute “section 748(1) or 749(1)”.
I move amendment No. 179:
In page 603, line 6, to delete “under this Part” and substitute “by virtue of the performance by him or her of functions (whether under this Part or otherwise)”.
The purpose of the amendment is to clarify that the Director of Corporate Enforcement may obtain information or documents in the exercise of his or her functions under the law.
I move amendment No. 180:
In page 612, line 12, after “been” to insert “, are”.
The purpose of the amendment is to correct an error and reflect the existing law by inserting the word ", are" after the word "been".
I move amendment No. 181:
In page 625, between lines 36 and 37, to insert the following:
“(g) the Revenue Commissioners;”.
The purpose of the amendment is to include the Revenue Commissioners in the list of competent authorities that any information, book or document relating to a company that has been obtained under sections 779 to 781, 784 or 788 may be disclosed without the consent of the company.
I move amendment No. 182:
In page 630, between lines 4 and 5, to insert the following:
“798. The Minister shall, within three months of the enactment of this Act, publish a report on the adequacy of the resources available to—
(a) the Companies Registration Office, and
(b) the Office of the Director of Corporate Enforcement,
and such report shall detail the areas in which resources need to be increased in order to allow both agencies to adequately deal with each agency’s area of responsibility.”.
This is an enormous piece of legislation which will bring huge changes to the way in which companies are run. On several occasions we have expressed a concern over whether the Companies Registration Office and the Office of the Director of Corporate Enforcement will be adequately resourced to enforce this legislation and, more important, to run an information campaign on the legislation. This book is only a part of it. A huge amount of work has gone into it, placing major new responsibilities on people. I believe it is necessary to insert in the legislation that a report will be published on the adequacy of the resources in order that we can be sure the Act is being pursued, information is being provided and resources are available to both offices to do so.
I respect that the Deputy raised this matter in some detail on Committee Stage when we opposed the amendment. The staffing needs of the offices of my Department are kept under constant review, including through participation in the workforce planning process initiated by the Department of Public Expenditure and Reform in 2012. That process required all areas of my Department to provide detailed information on current staffing resources and to estimate the predicted skills needs of each area up to 2015. The offices of my Department are subject to the same constraints and pressures that apply generally across my Department. The moratorium on recruitment and the need to reduce staff numbers to comply with challenging targets imposed by the employment control framework mean that there is little scope to increase staff resources in response to what might otherwise be regarded as a legitimate case for increased resources. Assignments in my Department are made by reference to the priority needs of the Department and its offices as a whole. This will remain the case. On that basis I am not in favour of the amendment.
The Department has many priority needs. This revision is a project that has been in operation for 12 or 14 years. An enormous amount of work has gone into it. It is too much to expect businesses suddenly to introduce all the changes that will come upon them once the Seanad passes this Bill. The Department's agencies are struggling to do their job and are stretched as it is. If we are serious about this legislation providing information, which will be the one potential deficit in the next 14 months, some sort of commitment to extra resources should be given. The Department of Public Expenditure and Reform should be involved in that conversation in order to take this legislation seriously. We have been let down by gaps in company law for some years, but this legislation will remedy a lot of those gaps. There is no sense in having the solution if people do not know about it.
The Deputy will be aware that there is a transition period of 18 months and there will also be an appropriate commencement period. I am confident those involved in all the agencies across my Department will be well equipped when the time comes to get the message out. The Companies Registration Office is well under way in terms of planning the information campaign and all the inherent publicity planning that goes with it. The Department is also proactively providing information to Deputies as this process unfurls.
We have had a number of seminars throughout the country - I was at one in Cork yesterday - entitled "Taking care of business". More than 27 State agencies and Departments are offering valuable information to people in their own geographical areas. I have great faith in the ability of my Department and its member organisations to get the message out. They can also deal with any queries that come in, no matter how difficult or complex they are.
I move amendment No. 183:
In page 654, after line 41, to insert the following:
“(5) This section shall also apply to the additional case that, by virtue of subsection (9) of section 151, subsection (1) of section 151 applies to.
(6) For the purposes of the application of this section to the foregoing additional case, this section shall have effect subject to the following modifications:
(a) the following definition shall be substituted for the definition of “relevant change amongst its directors” in subsection (1):
“ ‘relevant change amongst its directors’, in relation to a company, means the change referred to in subsection (1) of section 151 (as that subsection applies by virtue of subsection (9) of that section), namely the case of a person appointed a director of a company before the commencement of that section and who, subsequent to his or her appointment but before that commencement, becomes disqualified under the law of another state (whether pursuant to an order of a judge or a tribunal or otherwise) from being appointed or acting as director or secretary of a body corporate or an undertaking;”;
(b) in subsection (2), after “section 150(8)” there shall be inserted “(as that provision applies by virtue of section 151(10))”;
(c) in subsection (3)(a), there shall be substituted the following for subparagraph (i):
“(i) in the case of a failure referred to in subsection (2)(a), on the expiry of 3 months after the commencement of section 151; or”;
(d) in subsection (3)(b), there shall be substituted the following for subparagraph (i):
“(i) the period of foreign disqualification as remains unexpired as at the date that is specified in paragraph (a) to be the date on which the period of disqualification commences;”.”.
Amendments Nos. 184 and 185 are related and may be discussed together.
I move amendment No. 184:
In page 673, to delete lines 15 to 17 and substitute the following:
“(b) section 791; or
(c) section 877.”.
The purpose of this amendment is to remove the reference to the offence under section 878. As the Bill stands, the reference to section 878 is contradictory as the offence of destruction, mutilation or falsification of any book or document can only be committed by an officer of the company and not by the body corporate itself. This section applies where an offence is committed by a body corporate. As regards offences relating to producing, disclosing, destroying or falsifying books or documents belonging to the company, in such cases where the offence can be proven to have been committed with the consent or connivance, or due to the neglect of an officer of the company, that officer together with the body corporate will be guilty of the offence.
Where the affairs of the body corporate are managed by its members, this section will apply to those members as if they were a director or manager of the company. This derives from section 241 of the Companies Act 1990.
I move amendment No. 185:
In page 673, lines 18 and 19, to delete “section 786, 791, 877 or 878'” and substitute “section 786, 791 or 877'”.
I move amendment No. 186:
In page 673, line 37, to delete “fine not exceeding €1,000” and substitute “class D fine”.
The function of this amendment is to take account of the fact that "not exceeding €1,000" fine formulations are now dealt with by the “class D" fine in the Fines Act 2010. This section provides that if the contravention in respect of which a person is convicted of an offence under this Bill is continued after the conviction, the person shall be guilty of a further offence on every day on which the contravention continues. This derives from section 240(6) of the Companies Act 1990.
I move amendment No. 187:
In page 678, line 13, to delete “such” and substitute “such book or”.
The purpose of this amendment is to correct a missing reference in section 878(1)(b) that ought to read "book or document". The section provides a category offence for the destruction, mutilation and falsification of a book or document affecting or relating to the property or affairs of the company.
I move amendment No. 188:
In page 681, line 2, to delete “subsection (2)” and substitute “subsection (1)”.
I move amendment No. 189:
In page 682, line 35, to delete “section 725” and substitute “section 448 or 725”.
I move amendment No. 190:
In page 688, between lines 13 and 14, to insert the following:
“(3) For the purposes of communications between registers through the system of interconnection of registers, the Registrar shall assign to each company a unique identifier which shall include elements to identify the company as a company in the State, to identify the number assigned to the company in the register and other appropriate elements to avoid identification errors.
(4) The Registrar shall make available, through the system of interconnection of registers, electronic copies of the documents and particulars of companies referred to in Article 2 of Directive 2009/101/EC.
(5) The Registrar shall ensure that any changes to those documents and particulars, other than changes to the accounting documents referred to in Article 2(f) of Directive 2009/101/EC, are entered into the register and disclosed within 21 days after the date of receipt of the complete documentation regarding those changes.
(6) The Registrar shall make available, without delay, through the system of interconnection of registers, information on the opening and termination of winding up or insolvency proceedings of a company on the register and on the striking-off of a company from the register.”.
I move amendment No. 191:
In page 688, to delete lines 32 to 35 and substitute the following:
“Disposal of documents filed with Registrar
895. (1) The Registrar may, as respects any document that has (whether pursuant to this Act or the prior Companies Acts) been received and recorded by the Registrar, destroy the document if the following conditions are satisfied—
(a) 6 or more years have elapsed after the date of its receipt by him or her, and
(b) its destruction is authorised by the Director of the National Archives under section 7 of the National Archives Act 1986,
but this is subject to subsection (2).
(2) Without prejudice to subsection (3), for so long as a company’s existence is recorded in the register, and for a period of 20 years after the date of its dissolution, the Registrar shall keep in electronic form a copy of every document that, in relation to that company, has been received and recorded (whether pursuant to this Act or the prior Companies Acts) by the Registrar and the keeping of such copy in that form shall be such as to ensure the authenticity and accuracy of the data and that the data may be reliably accessed.
(3) On and from the expiry of 20 years after the date of its dissolution, a copy of every document kept, in relation to a company, by the Registrar under subsection (2), and in the form specified therein, shall be kept and maintained by the Registrar in an archival database comprising the records of companies, the length of the period of dissolution of which stands at 20 or more years.
(4) The means of keeping, in electronic form, the archival database referred to in subsection (3) shall be such as are, in the opinion of the Registrar (after consultation with the Director of the National Archives), best calculated to preserve and maintain the integrity of the data.”.
The purpose of the amendment is to provide for the destruction of documents received and recorded by the registrar.
Such destruction must be authorised by the director of the National Archives under section 7 of the National Archives Act 1986 and a period of more than six years will have elapsed following its receipt by the registrar.
Amendments Nos. 192 to 196, inclusive, and 272 are related and may be discussed together by agreement.
I move amendment No. 192:
In page 703, between lines 27 and 28, to insert the following:
"Funding in respect of functions of Supervisory Authority under certain regulations
919. (1) In this section "public-interest entities" has the same meaning as in Regulation 3 of the 2010 Audits Regulations.
(2) For the purposes specified in subsection (3), the Supervisory Authority may impose, with the Minister's consent and subject to subsections (4) to (6), one or more levies in each financial year of the Supervisory Authority on statutory auditors and audit firms auditing public-interest entities.
(3) Money received by the Supervisory Authority under this section may be used only for the purposes of meeting expenses properly incurred by it in performing its functions under Regulations 83 and 84 of the 2010 Audits Regulations and under any other Regulations of those Regulations that contain consequential or incidental provisions on, or in relation to, those Regulations 83 and 84.
(4) In addition to the requirement under subsection (2) with regard to the Minister's consent, the total amount levied in any financial year of the Supervisory Authority on statutory auditors and audit firms shall not exceed an amount in relation to that year specified in writing by the Minister for the purposes of this subsection.
(5) The Supervisory Authority shall—
(a) establish criteria for apportioning a levy among the several statutory auditors and audit firms auditing public-interest entities,
(b) submit the criteria to the Minister for approval before imposing the levy, and
(c) specify the date on which the levy is due to be paid by the relevant statutory auditors and audit firms.
(6) As a consequence of the apportionment of the levy under subsection (5), different statutory auditors and audit firms may be required to pay different amounts of the levy.
(7) Notwithstanding that the particular audit of a public-interest entity has been carried out by a statutory auditor, no levy under this section shall be imposed on the statutory auditor if he or she was designated by a statutory audit firm to carry out the audit, and the levy under this section shall, in those circumstances, be imposed on the statutory audit firm instead.
(8) The Supervisory Authority may recover, as a simple contract debt in any court of competent jurisdiction, from a statutory auditor or audit firm from which the levy is due, a levy imposed under this section.".
The purpose of this group of amendments is to consolidate sections 6 and 7 of the Companies (Miscellaneous Provisions) Act 2013 and incorporate them in the Bill. Section 6 of the 2013 Act added the Insolvency Service of Ireland to the list of bodies which may share information with the director. The section restates that notwithstanding any other law, the Competition Authority, members of An Garda Síochána, officers of the Revenue Commissioners and the Takeover Panel and other persons that may be prescribed may disclose information to the director or his officers about the commission of an offence under the Companies Acts.
I move amendment No. 193:
In page 704, lines 19 and 20, to delete "sections 915(2) and 917" and substitute "sections 915(2), 917 and 919".
I move amendment No. 194:
In page 732, between lines 20 and 21, to insert the following:
"(d) the Insolvency Service of Ireland;".
I move amendment No. 195:
In page 732, to delete lines 33 to 35 and substitute the following:
"(II) without prejudice to the generality of clause (1), in a case where the making of an application for a disqualification order in relation to a particular person in accordance with section 843(h) is contemplated, whether and to what extent the matters mentioned in section 844(3) apply in the circumstances concerned.".
I move amendment No. 196:
In page 732, to delete all words from and including "subsection (1)—" in line 36 down to and including "shall," in page 733, line 4 and substitute "subsection (1), an officer of the Revenue Commissioners shall,".
Amendments Nos. 197, 205, 243 and 253 are related and may be discussed together by agreement.
I move amendment No. 197:
In page 744, line 19, to delete "provision" and substitute "provision; and such a purchase may be so ordered notwithstanding anything in section 103".
The purpose of the grouped amendments is clarification. Amendment No. 197 provides that a court order for the purchase of the designated activity company, or DAC, and the shares of any members of the DAC and the reduction of the DAC's company capital may be made notwithstanding anything in section 103. The amendment purports to clarify that a DAC may continue in accordance with existing law deriving from section 10(1) to 10(6)(a) of the Companies Act 1963 to alter its objects clause by special resolution subject to the provision in the section. An application may be made to the court for the alteration to be cancelled and, in such a case, the alteration will not have effect except in so far as it is confirmed by the court.
Amendment No. 205 provides that a court order for the purchase of the public limited company and the shares of any of its members and the reduction accordingly of the company's capital may be made notwithstanding anything in section 103. Amendment No. 243 provides that a court order for the purchase of the ULC or PUC and the shares of any member and the reduction accordingly of such company's capital may be made notwithstanding anything in section 103.
The purpose of amendment No. 253 is to clarify the court's jurisdiction to alter the public limited company's or resultant company's constitution and make provision for the purchase of the shares of any of its members. The amendment purports to replicate existing law on this matter. Section 103, which is substantially unchanged from the existing law, sets out the power to acquire shares in positive terms. A company may not acquire its own shares other than in accordance with the section. Any default of the rules is deemed to be a category 2 offence and any such acquisition shall be void.
Amendments Nos. 198, 229 and 247 are related and may be discussed together by agreement.
I move amendment No. 198:
In page 751, line 7, to delete "Section 1086 shall apply to securities of a DAC as it applies" and substitute "Sections 1085 to 1087 shall apply to securities of a DAC as they apply".
The purpose of amendment No. 198 is to correct the incorrect reference to sections which apply to designated activity companies, companies limited by guarantee and public unlimited companies. The purpose is to ensure that the current law relating to existing private companies limited by shares is extended to those companies also. Section 1084 deals with transfer of uncertified securities and re-enacts regulation 5 of the Companies Act 1990 (Uncertified Securities) Regulation 1996, SI 68/1996. Certain provisions of the current law requiring the execution under hand or seal of a document in writing for the transfer of property will not apply to the transfer of title of securities pursuant to section 12 of the Electronic Commerce Act 2005.
I move amendment No. 199:
In page 753, line 19, to delete "shall appear in typeset, and not written, form" and substitute ", and any date or dates thereon, shall appear in typeset form".
I move amendment No. 200:
In page 753, line 25, after "signature" to insert "or of a date".
I move amendment No. 201:
In page 755, line 21, to delete "licensed bank" where it firstly occurs and substitute "credit institution".
I move amendment No. 202:
In page 755, line 21, to delete "licensed bank" where it secondly occurs and substitute "credit institution".
I move amendment No. 203:
In page 758, between lines 29 and 30, to insert the following:
Voting by director in respect of contract, etc. in which
director is interested
The purpose of the amendment is to disapply section 1627 from public limited companies. Subject to other provisions in the Bill, section 1067 allows directors of private limited companies to vote in respect of any contract, appointment or arrangement in which she or he is interested and she or he will be counted in the quorum at a meeting. It is not appropriate for public limited companies to have such a default provision applied to them. It is a matter the public limited company must address in its constitution, which shall take the form of a memorandum and articles of association.
I move amendment No. 204:
In page 759, line 25, to delete "Europae" and substitute "Europaea".
The purpose of the amendment is to correct a spelling error.
I move amendment No. 205:
In page 765, line 19, to delete "provision" and substitute "provision; and such a purchase may be so ordered notwithstanding anything in section 103".
I move amendment No. 206:
In page 766, between lines 34 and 35, to insert the following:
"Official seal for sealing securities
1019. (1) A PLC may have for use, for sealing—
(a) securities issued by the company, and
(b) documents creating or evidencing securities so issued, an official seal which is a facsimile of the common seal of the company with the addition on its face of the word "Securities" or the word "Urrúis".
(2) Where a company was incorporated before 3 April 1978 and which has such an official seal as is mentioned in subsection (1), the following provisions apply:
(a) the company may use the seal for sealing such securities and documents as are mentioned in that subsection notwithstanding anything in any instrument constituting or regulating the company or in any instrument made before 3 April 1978 which relates to any securities issued by the company; and
(b) any provision of an instrument referred to in paragraph (a) which requires any such securities or documents to be signed shall not apply to the securities or documents if they are sealed with that seal.".
I move amendment No. 207:
In page 767, between lines 10 and 11, to insert the following:
"Provisions as to shares transferable by delivery (general prohibition and provision for certain letters of allotment)
1020. (1) The provisions of this section shall, in relation to a PLC, have effect in place of subsections (8) to (10) of section 67.
(2) In this section—
"bearer instrument” means an instrument, in relation to shares of a PLC, which entitles or purports to entitle the bearer thereof to transfer the shares that are specified in the instrument by delivery of the instrument, and includes a share warrant as that expression was defined by section 88 of the Act of 1963;
"expiry date", in relation to a permissible letter of allotment, means a date no later than 30 days after the date of the instrument;
"permissible letter of allotment" means a letter of allotment by a PLC to a member of it of—
(a) bonus shares of the PLC, credited as fully paid;
(b) shares of the PLC, in lieu of a dividend, credited as fully paid; or
(c) shares of the PLC allotted provisionally, on which no amount has been paid or which are shares partly paid up, where the shares are allotted in connection with a rights issue or open offer in favour of members and the shares are issued proportionately (or as nearly as may be) to the respective number of shares held by the members of the PLC, there being disregarded for this purpose any exceptions to such proportionality, or arrangements for a deviation from such proportionality, as the directors of the PLC may deem necessary or expedient to make for the purposes of dealing with—
(i) fractional entitlements; or
(ii) problems of a legal or practical nature arising under the laws of any territory or requirements imposed by any recognised regulatory body in any territory,
which letter is expressed to be transferable by delivery during a period expiring on its expiry date.
(3) Save as provided by this section, a PLC shall not have power to issue any bearer instrument.
(4) If a PLC purports to issue a bearer instrument in contravention of subsection (3), the shares that are specified in the instrument shall be deemed not to have been allotted or issued, and the amount subscribed therefor (and in the case of a non-cash asset subscribed therefor, the cash value of that asset) shall be due as a debt of the PLC to the purported subscriber thereof.
(5) Subsection (3) shall not apply to an instrument falling within the definition of "permissible letter of allotment" in this section.
(6) Shares comprised in a permissible letter of allotment shall, until its expiry date, be transferable by renunciation and delivery of the letter, but subject to compliance with such conditions (if any) as may be specified in the letter.
(7) Where, on the commencement of this section, a PLC has in issue a bearer instrument in relation to shares of the PLC, other than a permissible letter of allotment—
(a) the PLC shall procure the entry in its register of members of the name of the holder or holders of those shares no later than the expiry of 18 months after that commencement;
(b) if and to the extent that paragraph (a) is not complied with, the PLC shall enter in its register of members the Minister for Finance as the person entitled to the share or shares concerned and thereupon the Minister for Finance shall become and be the full beneficial owner of that share or those shares.
(8) Subject to subsection (7), where on the commencement of this section a person has or is entitled to possession of a bearer instrument (other than a permissible letter of allotment), whether as owner or as encumbrancer, nothing in this section shall affect any rights which such person has by virtue of such entitlement or possession, provided that any right to transfer the shares that are specified in it by delivery of the instrument shall cease 21 days before the expiry of the period referred to in subsection (7)(a).".
Amendment No. 207 is necessary as a consequence of a Committee Stage amendment agreed with regard to section 67. The Committee Stage amendment concerned a general prohibition of bearer instruments. The purpose of amendment No. 207 is to restate the prohibition for public limited companies while also providing for certain letters of allotment which are to be allowed. Shares comprised in a permissible letter of allotment shall, until its expiry date, be transferable by renunciation and delivery of the letter subject to compliance with such conditions, if any, as specified in such letter.
I move amendment No. 208:
In page 767, line 39, to delete "shares" and substitute "relevant securities".
I move amendment No. 209:
In page 768, line 1, to delete "shares" and substitute "relevant securities".
I move amendment No. 210:
In page 768, between lines 7 and 8, to insert the following:
"(8) Any director of a PLC who knowingly contravenes, or knowingly permits or authorises a contravention of, a preceding provision of this section shall be guilty of a category 3 offence.".
The purpose of the amendment is to create a category 3 offence in circumstances where any director of a public limited company knowingly permits or authorises a contravention of a preceding provision of the section. The language of the amendment is in line with the language agreed in the general scheme of the companies (consolidation and reform) Bill 2007. The offence under this section has been brought in line with the general scheme of offences in Part 14 and will now be a category 3 offence.
Amendments Nos. 211 to 213, inclusive, are related and may be discussed together by agreement.
I move amendment No. 211:
In page 768, line 33, to delete "other".
The purposes of this group of amendments is to maintain existing law. Section 23(1)(a) of the Companies (Amendment) Act 1983 uses the expression "same or more favourable" in relation to pre-emption rights that may be enjoyed by the members of the company.
Second, the amendments reduce the offer period for peremptory offers from 21 days to 14 days in the case of public limited companies. This is in line with EU requirements, specifically Article 29.3 of the second directive on company law. This 14 day time limit also corresponds with the offer period of the company limited by shares, designated activity companies and unlimited companies. The amendment, therefore, purports to ensure consistency in time limits across the Bill. I am sure those present in the Public Gallery are riveted.
I welcome those present in the Visitors Gallery, especially visitors from County Galway.
The parish pump is never far away.
I move amendment No. 212:
In page 768, line 35, after “same” to insert “or more favourable”.
I move amendment No. 213:
In page 769, line 31, to delete “21 days” and substitute “14 days”.
Amendments Nos. 214 and 215 are related and may be discussed together by agreement.
I move amendment No. 214:
In page 774, lines 33 to 35, to delete all words from and including “or” in line 33 down to and including “subparagraph (i);” in lines 34 and 35 and substitute the following:
“(ii) a partner or employee of an officer or employee referred to in subparagraph (i); or
(iii) a person otherwise connected (within the meaning of section 221 as adapted by section 1029(7)) with an officer or employee referred to in subparagraph (i);”.
The purpose of the amendments is to exclude any connected persons, for instance, family members as per section 221, from being an independent person. As the Bill stands, a civil partner or child of an officer or employee of the public limited company is not to be precluded from being such an independent person. For this reason, the amendment is deemed necessary.
I move amendment No. 215:
In page 777, between lines 3 and 4, to insert the following:
“(7) For the purposes of the provision made by section 1028(6)(b)(iii) concerning a person’s being connected with an officer or employee there referred to (which officer or employee is, in this subsection, subsequently referred to as the “relevant person”), section 221 applies as if—
(a) for each reference in subsections (1), (2), (3) and (8) to a director of a company there were substituted a reference to the relevant person;
(b) for the first reference and the third reference in subsection (5) to a director of a company there were substituted a reference to the relevant person;
(c) the references in subsection (5) to another director or directors included references to one or more other relevant persons; and
(d) the reference in subsection (6)(b) to a director included a reference to a relevant person.”.
I move amendment No. 216:
In page 791, to delete line 5 and substitute the following:
“the time being governed by, as appropriate—
(a) regulations under section 1086, or
(b) for so long as they remain in force (including for any period as they may stand amended by regulations under section 1086), the Companies Act 1990 (Uncertificated Securities) Regulations 1996 (S.I. No. 68 of 1996).”.
The purpose of the amendment is to provide more accurate cross-referencing concerning the exemptions governing the restriction of transfer of shares. The amended section provides for Statutory Instrument 68 of 1996 relating to the Companies Act (Uncertified Securities) Regulation. This regulation provides for the transferring and recording of shares and other securities without stock transfer forms or certificates.
I move amendment No. 217:
In page 800, line 38, to delete “licensed bank” and substitute “credit institution”.
I move amendment No. 218:
In page 814, line 19, to delete “body corporate” and substitute “company”.
I move amendment No. 219:
In page 831, line 18, to delete “licensed bank” and substitute “credit institution”.
I move amendment No. 220:
In page 831, line 19, to delete “licensed bank” and substitute “credit institution”.
I move amendment No. 221:
In page 831, line 22, to delete “licensed bank” and substitute “credit institution”.
I move amendment No. 222:
In page 831, line 24, to delete “licensed banks” and substitute “credit institutions”.
I move amendment No. 223:
In page 831, line 33, to delete “licensed bank” and substitute “credit institution”.
I move amendment No. 224:
In page 832, line 1, to delete “licensed bank” and substitute “credit institution”.
I move amendment No. 225:
In page 833, line 18, to delete “licensed bank” where it firstly occurs and substitute “credit institution”.
I move amendment No. 226:
In page 833, line 18, to delete “licensed bank” where it secondly occurs and substitute “credit institution”.
Amendments Nos. 227 and 239 are cognate and may be discussed together by agreement.
I move amendment No. 227:
In page 876, to delete lines 15 to 17 and substitute the following:
“(c) the division of a company pursuant to Chapter 4 of Part 9.”.
The purpose of these amendments is to remove the incorrect cross-reference to the European Communities (Cross-Border Mergers) Regulations 2008. The cross-border mergers regulations allow that any Irish limited liability company other than an Irish company that is limited by guarantee may be party to a cross-border merger with an entity in another member of the European Economic Area. The regulations do not apply to companies limited by guarantee or unlimited companies.
Amendments Nos. 228, 240, 241, 280 and 281 are related and may be discussed together by agreement.
I move amendment No. 228:
In page 877, to delete lines 36 and 37, and in page 878, to delete lines 1 and 2 and substitute the following:
“(5) Subject to their compliance with section 1197(3) (articles must state the number of members with which the company proposes to be registered), articles may otherwise consist solely of a statement to the effect that the provisions of the Companies Act 2014 are adopted and, if the articles contain such a statement, subsection (4) shall apply.”.
The purpose of the amendments is to ensure that the constitution of a company limited by guarantee, which must take the form of a memorandum and articles of association, must state the number of the members with which the company proposes to be registered. This obligation is notwithstanding the provision that allows for a simple statement in the constitution to the effect that the provisions of this Bill are adopted by the company. Should a company extend the number of its members beyond its registered number, the company must notify the registrar within 15 days of the increase. Failure to do so is a category 4 offence.
I move amendment No. 229:
In page 888, line 2, to delete “Section 1086 shall apply to securities of a CLG as it applies” and substitute “Sections 1085 to 1087 shall apply to securities of a CLG as they apply”.
Amendments Nos. 230 and 248 are cognate and may be discussed together by agreement.
I move amendment No. 230:
In page 889, to delete lines 21 and 22 and substitute the following:
“(2) Such other persons—
(a) being persons—
(i) whom the directors admit to membership; or
(ii) who are admitted to membership, pursuant to provisions that the constitution may contain in that behalf, whether provisions that—
(I) provide a separate power to; or
(II) supplement or limit, or exclude, any power of the directors in that regard;
(b) whose names are entered in its register of members, shall be members of the CLG.”.
These amendments allow for a procedure for admission to membership to be determined by the company constitution. This section introduces new law which has been modelled on the Model Regulation 3 in Table C of Schedule 1 of the 1963 Companies Act. The proposed amendment provides for the first time that the constitution of the company must state the number of members with which the company proposes to be registered, that the registrar be notified of any increase to this number and that the constitution may limit the number of members in the constitution and regulates voting, that is, one vote per member in the absence of constitutional provision to the contrary. The offence, under this section, has been brought within the general scheme of offences under Part 14 and is now a category 4 offence, that is, on summary conviction a class A fine.
I move amendment No. 231:
In page 890, line 4, after “death” to insert “or bankruptcy”.
The amendment expands the instances on which membership is automatically terminated, that is, when a member dies or becomes bankrupt.
I move amendment No. 232:
In page 890, line 30, after “of” to insert “subsection (1)(b) and (c) and”.
I move amendment No. 233:
In page 894, line 19, to delete “shall appear in typeset, and not written, form” and substitute “, and any date or dates thereon, shall appear in typeset form”.
I move amendment No. 234:
In page 894, line 25, after “signature” to insert “or of a date”.
I move amendment No. 235:
In page 896, line 32, to delete “section 966” and substitute “section 1171”.
I move amendment No. 236:
In page 897, line 6, to delete “licensed bank” where it firstly occurs and substitute “credit institution”.
I move amendment No. 237:
In page 897, line 6, to delete “licensed bank” where it secondly occurs and substitute “credit institution”.
I move amendment No. 238:
In page 899, between lines 27 and 28, to insert the following:
Returns of allotments
Section 71(7) and (8)
The purpose of this amendment is to disapply the obligation to file a return of allotments to unlimited companies. Public unlimited companies are not obliged to return allotments of shares under current law. The Company Law Review Group recommended in this heads of this Bill that the obligation to file a return of allotments for unlimited companies be disapplied to both private and public unlimited companies.
I move amendment No. 239:
In page 902, lines 29 to 32, to delete all words from and including “Part 9,” in line 29 down to and including “2008).” in line 32 and substitute the following:
“Part 9, or
(c) the division of a company pursuant to Chapter 4 of Part 9.”.
I move amendment No. 240:
In page 904, line 32, to delete “Articles” and substitute “In the case of an ULC or PUC, articles”.
I move amendment No. 241:
In page 904, between lines 35 and 36, to insert the following:
“(6) In the case of a PULC, subject to the articles’ compliance with section 1254(3) (articles must state the number of members with which the company proposes to be registered), articles of such an unlimited company may otherwise consist solely of a statement to the effect that the provisions of the Companies Act 2014 are adopted and, if the articles contain such a statement, subsection (4) shall apply.”.
I move amendment No. 242:
In page 905, between line 18 and 19, to insert the following:
“1233. (1)An unlimited company shall disclose by the filing of a notification with the Companies Registration Office a list of all members which are limited companies, and their respective number of allocated shares.
(2) Subsection (1) shall apply to all body corporate members, wheresoever registered.
(3) A transfer of shares to a new body corporate member which is a limited liability company shall not take effect until the notification referred to in subsection (1) has been filed with the Companies Registration Office.
(4) Failure to file the notification referred to in subsection (1) may result, on application to the Court by any interested party, to the imposition of limited liability status on the unlimited company in question.”.
In recent years, we have heard a great deal about how companies such as Apple, Google and Starbucks operate and manage to avoid paying tax. Such companies are greatly helped by their status as unlimited companies. I am concerned about the use of unlimited holding companies in corporate structures in Ireland and the use of offshore limited companies as shareholders within this structure. I had hoped some of my concerns in this regard would have been addressed in the Bill.
Perhaps the Minister of State will consider some of the following issues. It is possible to start up an unlimited company in Ireland with shareholders who have limited liability. If the company is based offshore, the unlimited liability of the company is reduced. The Government needs to examine this loophole. Most people assume that in the case of an unlimited company there is no upper limit on the personal liability of its shareholders for the company's debts were it to become insolvent. There are more than 4,000 companies with unlimited status currently operating in Ireland. These companies escape the stricter filing and disclosure requirements to which private limited companies are subject.
The usual filing and disclosure requirements allow a creditor to appraise himself or herself of a company's solvency before commencing trade 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 determine whether 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 Limited but as the High Court remarked recently in the Goode Concrete v. CRH case, 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, including the Isle of Man, which has limited disclosure requirements.
A number of large companies which previously operated in Ireland, in particular in the construction sector, collapsed at enormous cost to the taxpayer, and much more than I cost them. The people trading with these companies at the time did not understand where they stood because of the level of secrecy around their business affairs. This could possibly be addressed by way of the introduction of legislation requiring all private unlimited companies to notify the Companies Registration Office of any shareholder company that might limit its liability. The unlimited company could be required to update information yearly when filing its annual returns or any abridged financial information required. This would allow a creditor to check the CRO's records of an unlimited company at the outset of contractual negotiations and would alert him or her 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 immediate imposition of a limited liability status on the company or in respect of a particular transaction, as the court sees fit within the limits of reasonableness and proportionality.
Transparency could be enhanced by addressing this issue. I realise that Fine Gael is pro large business but I would expect members of the Labour Party to try to hold them to account in terms of ensuring greater transparency. I look forward to hearing what the Minister of State has to say in response to those issues.
There is not a Minister or Deputy in this House who is not pro-business, be that business small, independent, a sole trader or a transnational corporation. The vast majority of businesses, whether multinational corporations or sole traders, operate legitimately and with probity in relation to their taxation, employment, health and safety and any other corporates of law one cares to mention.
Amendment No. 242 is made up of four subsections. Subsection (1) states that an unlimited company shall disclose by the filing of a notification with the Companies Registration Office a list of all members which are limited companies, and their respective number of allocated shares. The information sought by the amendment is already available on request. Under 217(9)(c) all companies are obliged to allow any person to inspect their members' register on the payment of a fee which must be €10 or less. Section 217(12)(c) obliges companies to send copies of the members' register to any person who requests it, again for a fee of €10 or less. This register contains the names and addresses of members and the number of shares held by each member. This also applies to unlimited companies.
In relation to subsections (3) and (4) of the amendment, it would be costly to set up a public register of the type set out, in particular in light of the fact that the information is already available by other means. Currently, there is no requirement to report this information to the CRO. In this regard, the Deputy referred to the possibility of the introduction of legislation. The Deputy is free to introduce legislation to this House. Therefore, there would be costs associated with this for the CRO and the affected companies. The ongoing cost to the CRO and affected companies of making and processing thousands of notifications would be colossal. The costs involved in delays to transfer of ownership in shares would be unacceptably and could interfere with the constitutional rights to private property. That is something we all adhere to also.
I am not sure if the Deputy is suggesting that we should remove unlimited companies from Irish law altogether. Limited companies serve many legitimate business purposes and are a feature of company law across the European Union. Just as guarantee companies and public limited companies are important for certain types of business, unlimited companies also serve an important purpose. Removing them would be disproportionate and would, I would argue, put Ireland at a competitive disadvantage. If the Deputy would like to remove the reporting exemption from unlimited companies, other countries across the EU allow unlimited companies to dispense with reporting requirements. This is because reporting requirements are imposed as a quid pro quo of limited. Where there is no limited liability there is no reason to require financial reporting.
As regards the Minister of State's statement that everybody in this House would be pro-business, history will show that austerity and all it entailed was not pro-small business. That is why our domestic economy has struggled so much during the past few years. It may have been pro-big business it was not pro-small business.
As regards the Minister of State's final comment, I have not asked that unlimited companies be removed from Ireland. I believe they should be allowed to operate but we should maximise our efforts to hold them to account. The Minister of State mentioned that limited companies have to go through the same hoops as unlimited companies. However, my point is that many of the unlimited companies are not near as unlimited as one would think. Some are actually limited and have many of the benefits of limited companies without being titled limited. The Minister of State said that similar systems operate across Europe. World economists like Ha-Joon Chang and Stiglitz are looking at what is happening in the business world. They see a race to the bottom in terms of how we operate. Companies Bills are not introduced very often. The Bill before us is mammoth. It will be years before similar legislation is introduced again.
We should maximise our efforts to ensure that these unlimited companies are more transparent in their operations and that they are at least held to account in Ireland. I still believe we are going somewhat easier on them. In the past couple of years large businesses have received more favourable treatment than their smaller counterparts.
It is very easy to state that small businesses have received less favourable treatment than their bigger counterparts.
It is true.
I will speak to the amendment. We could become involved in an argument with regard to the supports available to small and large businesses. However, as stated in reply to a previous amendment, between 250 and 300 individuals who own small businesses of various sizes attended an event in Cork yesterday in order to learn about the business supports provided by over 27 agencies of the State. Factually, the Deputy's statement is just not correct.
In the context of the amendment, the law on unlimited companies is governed by EU directives and any proposed changes to Irish law would produce few, if any, benefits for the creditors of such companies. However, such changes would give rise to a substantial cost to this country in terms of its international commercial competitiveness. Ireland is a small island nation and the foreign direct investment sector here is responsible for employing many thousands of people either directly or indirectly, in the context of sub-supply or in the provision of services. The fact that foreign direct investment companies operate here gives rise to downstream benefits, in terms of supply, for many of the small businesses we are discussing. I accept the Deputy's concern with regard to the ownership of unlimited companies. This issue will be dealt with in the coming months in the context of the accounting directive, which is due for transposition in 2015. The debate relating to said directive is the most suitable avenue for considering the issues raised by the Deputy.
The primary aim of the Bill before the House is to consolidate and tidy up the existing law. It is also designed to provide an accessible, user-friendly framework for businesses operating within our shores. I reiterate that EU law does not require reporting on the part of unlimited companies. That is the position in law at present.
- Adams, Gerry.
- Broughan, Thomas P.
- Colreavy, Michael.
- Crowe, Seán.
- Daly, Clare.
- Ellis, Dessie.
- Halligan, John.
- Healy, Seamus.
- Mac Lochlainn, Pádraig.
- McDonald, Mary Lou.
- McGrath, Finian.
- Ó Caoláin, Caoimhghín.
- O'Brien, Jonathan.
- Pringle, Thomas.
- Ross, Shane.
- Shortall, Róisín.
- Stanley, Brian.
- Tóibín, Peadar.
- Wallace, Mick.
- Barry, Tom.
- Breen, Pat.
- Bruton, Richard.
- Butler, Ray.
- Buttimer, Jerry.
- Byrne, Catherine.
- Byrne, Eric.
- Calleary, Dara.
- Cannon, Ciarán.
- Carey, Joe.
- Coffey, Paudie.
- Collins, Niall.
- Conaghan, Michael.
- Conlan, Seán.
- Connaughton, Paul J.
- Coonan, Noel.
- Coveney, Simon.
- Creed, Michael.
- Daly, Jim.
- Deasy, John.
- Deering, Pat.
- Donnelly, Stephen S.
- Donohoe, Paschal.
- Dooley, Timmy.
- Dowds, Robert.
- Doyle, Andrew.
- Durkan, Bernard J.
- English, Damien.
- Farrell, Alan.
- Feighan, Frank.
- Ferris, Anne.
- Fitzpatrick, Peter.
- Flanagan, Charles.
- Flanagan, Terence.
- Griffin, Brendan.
- Hannigan, Dominic.
- Harrington, Noel.
- Harris, Simon.
- Hayes, Tom.
- Healy-Rae, Michael.
- Heydon, Martin.
- Hogan, Phil.
- Howlin, Brendan.
- Humphreys, Kevin.
- Keaveney, Colm.
- Kehoe, Paul.
- Kelleher, Billy.
- Kenny, Seán.
- Kitt, Michael P.
- Kyne, Seán.
- Lawlor, Anthony.
- Lyons, John.
- McCarthy, Michael.
- McConalogue, Charlie.
- McEntee, Helen.
- McGrath, Mattie.
- McGrath, Michael.
- McLoughlin, Tony.
- McNamara, Michael.
- Martin, Micheál.
- Mitchell, Olivia.
- Moynihan, Michael.
- Mulherin, Michelle.
- Murphy, Dara.
- Murphy, Eoghan.
- Nash, Gerald.
- Naughten, Denis.
- Neville, Dan.
- Nolan, Derek.
- Ó Fearghaíl, Seán.
- O'Dea, Willie.
- O'Donnell, Kieran.
- O'Donovan, Patrick.
- O'Dowd, Fergus.
- O'Mahony, John.
- O'Reilly, Joe.
- O'Sullivan, Jan.
- Penrose, Willie.
- Perry, John.
- Phelan, Ann.
- Phelan, John Paul.
- Rabbitte, Pat.
- Ryan, Brendan.
- Sherlock, Sean.
- Spring, Arthur.
- Stagg, Emmet.
- Stanton, David.
- Tuffy, Joanna.
- Twomey, Liam.
- Wall, Jack.
- Walsh, Brian.