Companies Bill 2012: Report Stage (Resumed)

The next amendment is No. 243, which has been discussed with amendment No. 197. I call on the Minister of State to move the amendment.

I move amendment No. 243:

In page 908, line 38, to delete "provision" and substitute "provision; and such a purchase may be so ordered notwithstanding anything in section 103".

Amendment agreed to.

I move amendment No. 244:

In page 909, between lines 38 and 39, to insert the following:

“Application of section 1019 to PUCs and PULCs

1240. Section 1019 (official seal for sealing securities) shall apply to a PUC and a PULC as it applies to a PLC.".

Amendment agreed to.

Amendments Nos. 245 and 261 are cognate and may be discussed together by agreement.

I move amendment No. 245:

In page 911, line 36, to delete " "unlimited" " and substitute " "unlimited company" ".

Amendment agreed to.

I move amendment No. 246:

In page 913, between lines 17 and 18, to insert the following:

"(3) Without prejudice to any contrary provision of—

(a) the resolution for, or any other resolution relevant to, the reduction of company capital, or

(b) the ULC’s or PUC’s constitution,

a reserve arising from the reduction of a ULC’s or PUC’s company capital is to be treated for all purposes as a realised profit.".

Amendment agreed to.

I move amendment No. 247:

In page 913, line 27, to delete "Section 1086 shall apply to securities of a PUC or a PULC as it applies" and substitute "Sections 1085 to 1087 shall apply to securities of a PUC or a PULC as they apply".

Amendment agreed to.

I move amendment No. 248:

In page 914, to delete lines 11 and 12 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;

and

(b) whose names are entered in its register of members, shall be members of the PULC.".

Amendment agreed to.

I move amendment No. 249:

In page 918, line 12, to delete "shall appear in typeset, and not written, form" and substitute ", and any date or dates thereon, shall appear in typeset form".

Amendment agreed to.

I move amendment No. 250:

In page 918, line 18, after "signature" to insert "or of a date".

Amendment agreed to.

I move amendment No. 251:

In page 920, line 10, to delete "licensed bank" where it firstly occurs and substitute "credit institution".

Amendment agreed to.

I move amendment No. 252:

In page 920, line 10, to delete "licensed bank" where it secondly occurs and substitute "credit institution".

Amendment agreed to.

I move amendment No. 253:

In page 925, line 19 to delete "provision." and substitute the following:

"provision, and such a purchase may be so ordered notwithstanding anything in section 103.".

Amendment agreed to.

I move amendment No. 254:

In page 928, line 16, to delete "section 85(2)(b)" and substitute "section 85(2)".

Amendment agreed to.

I move amendment No. 255:

In page 937, line 1, after "limited," to insert "which is".

The purpose of this amendment is to correct a typographical error to aid better interpretation.

Amendment agreed to.

I move amendment No. 256:

In page 941, line 8, to delete "shall appear in typeset, and not written, form" and substitute ", and any date or dates thereon, shall appear in typeset form".

Amendment agreed to.

I move amendment No. 257:

In page 941, line 15, after "signature" to insert "or of a date".

Amendment agreed to.

I move amendment No. 258:

In page 941, between lines 15 and 16, to insert the following:

"(6) The documents and information referred to in subsection (2), and in subsection (3), other than paragraphs (a) and (b) of that subsection, shall be made available by the Registrar to the system of interconnection of registers.

(7) For the purposes of communications between registers (through the system of interconnection of registers) the Registrar shall assign a unique identifier to each branch which shall include elements to identify the branch as a branch in the State, to identify the number assigned to the branch in the register and other appropriate elements to avoid identification errors.

(8) On receipt of information, through the system of interconnection of registers, that an EEA company, that has established a branch or branches in the State, has been struck off the register in the state in which it is incorporated, the Registrar shall, without delay, delete from the register the documents and information delivered or notified under this section or any other provision of this Chapter in relation to the company but not in any case in which the company has been so struck off as a result of any change in the legal form of the company, a merger or division, or a cross border transfer of its registered office.".

Amendment agreed to.

I move amendment No. 259:

In page 941, line 32, to delete "shall appear in typeset, and not written, form" and substitute ", and any date or dates thereon, shall appear in typeset form".

Amendment agreed to.

I move amendment No. 260:

In page 941, line 39, after "signature" to insert "or of a date".

Amendment agreed to.

I move amendment No. 261:

In page 964, line 10, to delete " "unlimited" " and substitute " "unlimited company" ".

Amendment agreed to.

I move amendment No. 262:

In page 985, line 10, to delete "shall appear in typeset, and not written, form" and substitute ", and any date or dates thereon, shall appear in typeset form".

Amendment agreed to.

I move amendment No. 263:

In page 985, line 16, after “signature” to insert “or of a date”.

Amendment agreed to.

I move amendment No. 264:

In page 993, to delete line 20.

The purpose of this amendment is to remove an incorrect reference in section 226, which governs an obligation of a director to prepare a directors' compliance statement from the investment company's tables. Section 226, with a slight modification by section 1002, applies to undertakings for collective investments in transferable securities, as per the 2011 regulations on EU collective investments in transferable securities.

Amendment agreed to.

I move amendment No. 265:

In page 999, lines 20 and 21, to delete “a company to which section 1401 applies” and substitute “a migrating company as defined in section 1400”.

The purpose of this amendment is to correct an incorrect cross-reference in subsection (9). The correct reference is to section 1400. A migrating company is defined as a body corporate which is established and registered under the laws of a relevant jurisdiction - the place outside the State where the company is established and registered at the time of application under section 1402 - and which is a collective investment undertaking.

Amendment agreed to.

Amendments Nos. 266 and 275 are related and may be discussed together.

I move amendment No. 266:

In page 1002, between lines 21 and 22, to insert the following:

“(6) Regulations made under section 3(3) of the Act of 1990 prescribing, for the purposes of the definition of ‘alternative body of accounting standards’ in section 260(4A) of the Act of 1990, bodies having authority to lay down standards of the kind referred to in that definition, and which regulations are in force immediately before the commencement of this section, shall continue in force as if they were regulations made under section 12 for the purposes of subsection (4) and may be amended or revoked accordingly.”.

The purpose of this amendment is to correct the unintended exemption provided to investment companies from the filing of financial statements. The new wording will provide for the filing of financial statements without the need to file annual returns. The intention here is to protect the anonymity of investors in investment companies as their names would have to appear as those of shareholders on annual returns.

In the context of the relevant section, where lies the proposed review of the term "accountant" and the protections that are necessary in that regard? This matter was raised on Committee Stage and the Minister, Deputy Bruton, undertook to instigate a review. The section to which amendment No. 266 relates would probably be the most suitable in the context of clarifying the matter.

An amendment has not been tabled on this issue.

We did not table an amendment because the Minister committed to undertake a review. When we met him after Committee Stage, he stated that the entire issue would be reviewed and that he would consult the relevant bodies. As far as I recall, the various political parties were represented at that meeting which took place last November. We did not table an amendment for Report Stage but we will table one for Committee Stage in the Seanad. However, I had understood that the accountancy bodies were to be consulted by the Minister on this matter. What is the position in that regard?

Without being pedantic, I am not sure which section would be relevant to the matter to which the Deputy refers.

In the context of amendment No. 266, we are discussing "Regulations made under section 3(3) of the Act of 1990 prescribing, for the purposes of the definition of ‘alternative body of accounting standards’". We are, therefore, dealing here with accounting standards.

The review is ongoing. In recognition of the fact that consultation took place on the matter, I wish to read some information into the record of the House. The accountancy profession is, in general, adaptable and agile and is able to respond to new market opportunities and directions. This is, to a great extent, because it is not tied down by layers of regulation. There are detailed statutory provisions relating to auditing and, to a lesser extent, insolvency practice. The Competition Authority holds the view that this is the way things should stay. New regulations should only be introduced where there is clear evidence of market failure or very damaging consumer harm. That has not been established as the position here.

When the matter was reviewed by the Department at the time of drafting, the view was taken that there was no case for introducing a system of regulation for the profession generally. On the contrary, it was felt that introducing such a system would put at risk the flexibility of the profession and its ability to respond to client needs, be it in traditional areas such as tax advice or management accounts or in emerging fields such as succession planning. New layers of regulation could also stultify further growth and innovation. Having examined the issue from the standpoint of the principles of better regulation, the Competition Authority concluded that there was no public interest case requiring legal protection of the term "accountant". In response to the concerns of the industry, however, the Minister has agreed to consult fully on the matter. I am informed that the review will happen this year but we do not have a definitive timeline in respect of it. However, I am not sure whether it was agreed that the review would be completed in advance of the conclusion of the deliberations on this legislation. Perhaps Deputy Calleary has a different view to offer in that regard.

It would be appropriate for it to be concluded in advance of the Seanad's deliberations on the legislation. If it is not, then we will have no option but to table an amendment. There is a lacuna in that the term is not protected. Chartered Accountants Ireland recently submitted some important evidence in respect of this matter. It would only be fair if the review was completed before the Bill goes to the Seanad in order that all of the relevant information would be available to the Members of the Upper House. We will table amendments on this issue in the Seanad regardless of whether the review is completed. Our window for taking action will close as soon as the legislation is taken in the Upper House.

The Bill has by and large been dealt with up to now on the basis of a consensual approach and I am mindful of the need to conclude our deliberations on it. I take the point the Deputy is making with regard to tabling an amendment in the Seanad. In fairness, the Minister, Deputy Bruton, committed in good faith to carry out and conclude a review by the end of the year. All parties involved will be consulted. I hope we can expedite the review and that any matters relating to it will not delay the implementation of the legislation.

Amendment agreed to.

Amendments Nos. 267 and 268 are related and may be discussed together.

I move amendment No. 267:

In page 1014, to delete lines 29 and 30 and substitute the following:

“1408. (1) In addition to their application to Part 11, sections 1411 to 1420 shall apply to insolvency proceedings dealt with in Part 10.”.

The purpose of these amendments is to make reference to Statutory Instrument No. 333/2002 - European Communities (Corporate Insolvency) Regulations 2002. This reference is necessary in order to ensure the statutory instrument's re-enactment.

Amendment agreed to.

I move amendment No. 268:

In page 1015, to delete lines 9 to 14 and substitute the following:

“1410. The purpose of sections 1411 to 1420 is to re-enact the European Communities (Corporate Insolvency) Regulations 2002 (S.I. No. 333 of 2002), apart from their provisions in so far as they relate to insolvency proceedings.”.

Amendment agreed to.

I move amendment No. 269:

In page 1018, line 2, to delete “licensed bank” and substitute “credit institution”.

Amendment agreed to.

I move amendment No. 270:

In page 1019, between lines 6 and 7, to insert the following:

“Application of sections 114 to 116 to bodies corporate generally

1423. (1) In addition to its application where the company firstly referred to in subsection (1) of it is—

(a) a private company limited by shares; or

(b) by virtue of any of Parts 16 to 24, any other type of company, section 114 shall apply to a body corporate that is not a company, and the foregoing reference in subsection (1) of it to a company, and the other relevant references in that section, shall be read accordingly.

(2) In addition to their application where the company firstly referred to in subsection (1) of either section is—

(a) a private company limited by shares; or

(b) by virtue of any of Parts 16 to 22, any other type of company, sections 115 and 116 shall apply to a body corporate that is not a company, and the foregoing reference in subsection (1) of section 115 or 116 to a company, and the other relevant references in either such section, shall be read accordingly.”.

The intention behind this new section is to replicate current law as set out in section 32(1) of the 1963 Act. The current law was designed to prevent undesirable forms of inter-company financing between holding companies and subsidiaries.

Amendment agreed to.

I move amendment No. 271:

In page 1020, line 28, to delete “licensed bank” and substitute “credit institution”.

Amendment agreed to.

I move amendment No. 272:

In page 1024, between lines 29 and 30, to insert the following:

No. 46 of 2013

Companies (Miscellaneous

Provisions) Act 2013

Sections 2 to 7

".

Amendment agreed to.

I move amendment No. 273:

In page 1027, lines 13 to 15 to delete all words from and including “debentures;” in line 13 down to and including “shares.” in line 15 and substitute the following:

“debentures; and

(c) costs of research.”.

The purpose of this amendment is to delete an incorrect reference to "own shares or treasury shares" from the balance sheet. This is because they shall be treated as assets in the balance sheet of a company in accordance with the application of accounting standards. The proposed amendment purports to provide greater consistency with the amendment proposed in section 321.

Amendment agreed to.

I move amendment No. 274:

In page 1029, to delete lines 22 and 23 and substitute the following:

“6. Prepayments and accrued income”.

The purpose of this amendment is to separate the headings "Prepayments" and "accrued income" in format 2 and to provide consistency between formats 1 and 2.

Amendment agreed to.

I move amendment No. 275:

In page 1071, between lines 34 and 35, to insert the following:

“(3) As provided for in section 1392(6), the Companies Act 1990 (Prescribed Alternative Accounting Standards Bodies) Regulations 2005 (S.I. No. 382 of 2005) and any regulations amending those regulations shall continue in force and may be amended or revoked under section 12 accordingly.”.

Amendment agreed to.

Amendments Nos. 276 to 278, inclusive, are related and may be discussed together.

I move amendment No. 276:

In page 1074, line 29, to delete “and”.

The purpose of these amendments is to address the issue whereby a company is struck off and dissolved prior to the enactment of the Bill. The amendments clarify the status of such a company should it be restored to the register. They also make provision for section 30 of the Multi-Unit Development Act 2011.

This is the case because there is a possibility that an existing private company limited by shares will have been struck off in recent times and will only come to be restored to the register after the end of the transition period.

Amendment agreed to.

I move amendment No. 277:

In page 1074, line 32 to delete “Part 17.” and substitute the following:

Part 17; and

(c) the references in section 30 of the Multi-Unit Developments Act 2011 to section 311 or 311A of the Act of 1963 or section 12 or 12B of the Companies (Amendment) Act 1982, or to a particular provision of any such section, shall be read as references to Chapter 1 or, as appropriate, Chapter 2 of Part 12 or, as the case may be, the corresponding provision of either such Chapter.”.

Amendment agreed to.

I move amendment No. 278:

In page 1074, between lines 35 and 36, to insert the following:

Provisions as to status of companies restored to register, having been struck off under former enactments

12. (1) Without prejudice to any specific provision in this Act in that behalf and the subsequent provisions of this paragraph, the provisions of this Act that shall apply to a company—

(a) struck off the register under any former enactment relating to companies (within the meaning of section 5); and

(b) subsequently restored to the register, whether under—

(i) the former enactment referred to in section 745(3);

(ii) Chapter 2 of Part 12; or

(iii) section 30 of the Multi-Unit Developments Act 2011,

shall be those applicable to the type of company that corresponds to the type of company to which the company belonged before it was so struck off.

(2) Without prejudice to subparagraphs (3) and (4), where any of this Act’s provisions, as applicable to a particular type of company, operates differently by reference (however the matter is expressed) to the length of time that has elapsed after the provision’s commencement, then the reference in subparagraph (1) to the provisions of this Act that are applicable to a type of company shall, in the case of that particular provision, be read as a reference to that provision as it is applicable to a company of the type concerned at the time of the particular company’s restoration to the register (and then at a future date, as the case may be, as it is so applicable at that future date).

(3) If the company’s type, before being so struck off, was that of a private company limited by shares and the date on which the company is restored to the register under Chapter 2 of Part 12 or section 30 of the Multi-Unit Developments Act 2011 is subsequent to the expiry of the transition period (within the meaning of Chapter 6 of Part 2), then, subject, in the case of a restoration under section 739 or 742, to any direction or order of the court under section 743, section 62(1)(a) and (b) shall apply in relation to the company notwithstanding that the company was not an existing private company within the meaning of that Chapter 6 and, accordingly, the company shall, on the date of its restoration to the register, be deemed to be a private company limited by shares to which Parts 1 to 15 apply and the other provisions of section 62 shall apply to it with any necessary modifications.

(4) Subparagraph (3) shall similarly apply (where the company’s type, before being so struck off, was that of a private company limited by shares) if, by virtue of subsection (3) of section 745, the former enactment referred to in that subsection applies to the application for the company’s restoration but with the modification that the reference in that subparagraph to a particular provision under which the application for restoration is made, or to a particular provision under which a direction or order of the court is made, shall be read as a reference to the corresponding provision of the former enactment concerned.

(5) If in any respect any difficulty arises during the period of 20 years after the commencement of Chapter 2 of Part 12 in bringing into operation that Chapter as it relates to a case falling within any of subparagraphs (1) to (4), the Minister by regulations do anything which appears to be necessary or expedient for bringing that Chapter into operation as it relates to such a case.

(6) The Minister’s power to make regulations under subparagraph (5) extends to removing difficulties in cases in which a private company limited by shares was—

(a) struck off the register under any former enactment relating to companies (within the meaning of section 5); and

(b) restored to the register under—

(i) the former enactment referred to in section 745(3);

(ii) Chapter 2 of Part 12; or

(iii) section 30 of the Multi-Unit Developments Act 2011,

and, before the date it is so restored, there has elapsed a length of time that, in the Minister’s opinion, represents a substantial portion (or greater) of the transition period (within the meaning of Chapter 6 of Part 2).”.

Amendment agreed to.

I move amendment No. 279:

In page 1082, line 8, to delete “LIMITED” and substitute “COMPANY LIMITED BY GUARANTEE”.

The purpose of this amendment is to correct a mistake. The example of the name of the company in the Schedule refers to "company limited by guarantee". In accordance with section 1176, the name of company limited by guarantee shall end with "company limited by guarantee". That is it.

Amendment agreed to.

I move amendment No. 280:

In page 1082, to delete lines 25 to 28 and substitute the following:

“The following Regulations shall apply to the company:

1. The number of members with which the company proposes to be registered is 4.

[In addition to the immediately foregoing words, the following sentence may be included:-]

The provisions of the Companies Act 2014 are adopted.

*See section 1175(5).”.

Amendment agreed to.

I move amendment No. 281:

In page 1088, to delete lines 17 to 20 and substitute the following:

“The following Regulations shall apply to the company:

1. The number of members with which the company proposes to be registered is 5.

[In addition to the immediately foregoing words, the following sentence may be included:-]

The provisions of the Companies Act 2014 are adopted.

*See section 1232(6).”.

Amendment agreed to.

I move amendment No. 282:

In page 1091, between lines 6 and 7, to insert the following:

Remedy in case of oppression

Section 213

”.

The purpose is to include section 213 and the list of provisions to be applied to unregistered companies in Schedule 14. Section 213 provides a remedy to any member of the company who complains that the affairs of the company are being conducted in a manner that is oppressive to the member himself or herself or to any other member. The remedy is available under existing law and it is not intended to alter that law.

Amendment agreed to.
Bill, as amended, received for final consideration.