Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024: Second Stage

Minister of State at the Department of Enterprise, Trade and Employment (Deputy Emer Higgins)

I move: "That the Bill be now read a Second Time."

In bringing this Bill before the House, I am standing in for the Minister of State with responsibility for trade promotion, digital and company regulation, Deputy Calleary, who is travelling on official business. Before proceeding, I acknowledge the significant work by those involved, most notably in the past 12 months, to develop the general scheme of the Bill before the House. I acknowledge and thank in particular the members of the Joint Oireachtas Committee on Enterprise, Trade and Employment for their consideration of the Bill during pre-legislative scrutiny in March. I am pleased to bring the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 before the House, which will amend the Companies Act 2014, from now on referred to as "the 2014 Act". The 2014 Act provides a world-class company law code and is one of the largest pieces of legislation in the State. It establishes the legislative framework for companies and businesses operating in Ireland and facilitates entrepreneurial activity primarily through the provision of separate legal personality and limited liability. A thriving and well-regulated enterprise base is the cornerstone for a competitive economy in which businesses can create and sustain jobs. Providing for effective, proportionate and enforceable regulation is a fundamental tenet of the Government's White Paper on enterprise. Ireland has long been considered a conducive environment for enterprise to develop and grow. We continue to perform well across a range of indicators for the business and regulatory environment. That includes the IMD world competitiveness rankings, in which Ireland is ranked fourth for its business legislation.

This Bill assists competitiveness through the creation of a level playing field for all business. This is supported by the oversight, regulatory and enforcement functions of the statutory authorities established under the 2014 Act: the Companies Registration Office, CRO; the Corporate Enforcement Authority, CEA; and the Irish Auditing and Accounting Supervisory Authority, IAASA. Company law is dynamic and my Department's policy is to continuously review legislation to ensure it is fit for purpose, its objectives remain valid, it reflects national and international developments and it can be delivered effectively. The policy objective of the Bill is to enhance the 2014 Act primarily in the areas of corporate governance, company law enforcement and supervision, company law administration and corporate insolvency. The provisions of the Bill seek to strike a balance between lightening the regulatory burden, on the one hand, and balancing the interests of members, creditors and the public on the other. The Bill has been developed through consultation with enterprise, the relevant statutory bodies and the Company Law Review Group, CLRG. The CLRG is a statutory advisory body comprising representatives of all relevant stakeholders, including regulatory bodies, trade unions, business associations and banking and auditing bodies, in addition to academics, legal practitioners and insolvency experts. This extensive representation makes it uniquely well positioned to advise on the reform and modernisation of company law.

Before I summarise the provisions of the Bill in full, many of which are technical, I will highlight its main provisions. As a response to the Covid pandemic, my Department introduced legislation on an interim basis which permitted companies to conduct general meetings virtually, enabling them to continue to meet their obligations under the 2014 Act. I now wish to provide companies and industrial and provident societies with the permanent option to hold general meetings either partially or wholly by use of electronic communications technology where such meetings are not expressly prohibited by a company’s constitution or a society’s rules. The approach taken in this Bill was developed based on feedback from stakeholders and is in line with progressive enterprise policy. It will ensure that Ireland's regulatory framework provides flexibility and is conducive to modern businesses operating in an increasingly virtual environment. The Bill's second key provision amends the audit exemption regime for small and micro companies. The timely filing of annual returns with the CRO is a crucial element of corporate transparency. Small companies that file on time can avail of the privilege of exemption from having their financial statements audited.

However, for the minority of businesses that do not file on time, I am conscious of the disproportionate impact that the current regime has on small businesses due to the automatic loss of audit exemption and the resulting cost of providing two years of audited financial statements. While late filing fees will remain in all cases of late filing, once-off late filing will no longer result in loss of audit exemption for small businesses. Supporting SMEs is an important focus for this Government, and I am pleased to introduce this pro-enterprise reform.

The CEA, IAASA and the CRO all have important company law roles in terms of oversight, supervision, regulation and enforcement. Collectively, they underpin and bolster the framework within which businesses operate. The Bill's provisions will assist these bodies to effectively undertake their statutory functions through the provision of appropriate legislative tools to conduct investigations and prosecute breaches of company law, and through the streamlining of processes to deliver efficiencies for the bodies and those interacting with them.

I will now outline the structure of the Bill and summarise its provisions. The Bill is made up of three Parts and 90 sections primarily amending the 2014 Act but also providing for amendments to the Industrial and Provident Societies Act 1893 and the Registration of Business Names Act 1963. Many of the provisions in this Bill are purely technical. Therefore, I will try to be as brief as possible in my overview of the sections. I know that each Member has been provided with a copy of my speech and the Bill's explanatory memorandum, which I hope is helpful.

Sections 1 to 3, inclusive, form Part 1 of the Bill. These are standard provisions setting out the Short Title, arrangements for commencement, definitions and repeals. The Bill’s amending provisions are contained in Part 2, which includes sections 4 to 88, inclusive. I will deal with the various sections of Part 2 under the themed headings of corporate governance, company law enforcement and supervision, company law administration and corporate insolvency.

Starting with corporate governance, pragmatic solutions and streamlined processes were adopted on an interim basis in response to the Covid-19 pandemic. Through this Bill, I will place these on a permanent basis to continue to facilitate good corporate governance in our digital age. Section 7 provides flexibility for companies in the execution of documents containing the company seal. Sections 11 to 14, inclusive, and 86 provide for virtual and hybrid meetings and related amendments which I addressed earlier. Sections 29, 30 and 87 amend the 2014 Act on the recommendation of the CLRG, and in doing so address matters arising from practical problems relating to mergers.

Moving on to company law enforcement and supervision, the Bill contains amendments aimed at enhancing the powers of the relevant bodies, streamlining procedures, delivering efficiencies and strengthening oversight. Sections 10, 23, 54, 57, 67 to 69, inclusive, and 79 to 82, inclusive, relate to the functions of the CEA. They confer on it additional powers of information and evidence-gathering, as well as measures to aid its investigations. Section 10 provides that the CEA must be put on notice of any applications for leave to act as a secretary or director of a company or to take part in its promotion, foundation or management by a person who is an undischarged bankrupt. Section 23 permits copies of books or documents required by the CEA during an investigation to be made by the statutory auditors from whom the information is requested and to provide assurance to the CEA that the copies made and submitted are exact copies.

Sections 54 and 57 relate to certain liquidators’ obligations. Section 54 clarifies that liquidators’ obligations extend to defending any appeals against restriction orders imposed by the High Court as a consequence of company directors’ behaviour in managing the affairs of insolvent companies. Section 57 streamlines the process whereby the liquidator provides a report to the CEA, ensuring that this is now done in as close a time as possible to when the Director of Public Prosecutions, DPP, also receives the report.

Sections 65 and 83 extend the statutory gateway for the sharing of information between the CEA and other competent authorities. Section 66 introduces a new criminal offence relating to obstruction, interference with or impeding an officer of the CEA. Section 67 amends section 795 of the 2014 Act by streamlining the court process in relation to claims of legal professional privilege, with the aim of expediting and reducing the costs in complex cases where thousands of documents are at issue. Sections 68 to 70, inclusive, are also intended to assist the CEA in the gathering of relevant information from the courts by allowing for that information to be provided directly to the CEA in as timely a manner as possible. Section 79 clarifies that the head of the CEA is to be referred to as the chairperson where there is only one member. Sections 80 to 82, inclusive, make consequential amendments.

Sections 73 to 78, inclusive, relate to the functions of IAASA. Sections 73 and 76 amend processes to allow a greater focus on risk-based enforcement. Section 74 permits the use of certain moneys for investigation purposes. Section 75 updates the list of professional bodies under IAASA supervision for the purposes of statutory audit, removing those no longer in existence or operation. Section 77 confers IAASA with a new power to take immediate action to impose temporary restrictions or conditions on a statutory auditor in certain circumstances. This emergency provision will allow IAASA to act quickly in the public interest to mitigate any further possible harm. Section 78 provides for the court to hear an appeal against the imposition of these temporary restrictions or conditions.

Sections 21 and 22 and sections 58 to 64, inclusive, relate to the enforcement and supervision functions of the CRO. Section 21 disapplies the Probation of Offenders Act 1907 for an offence where a company fails to file an annual return. Section 22 reforms the audit exemption regime providing for a two-step graduated approach for those small companies filing late, the details of which I highlighted earlier. Sections 58 to 64, inclusive, provide for three additional grounds for involuntary strike-off by the registrar of companies and consequential amendments.

Moving on to company law administration, the Bill introduces amendments to enhance and streamline administrative processes to ensure the integrity, accuracy and consistency of information included on the register of companies. It also modernises certain administrative requirements for companies as recommended by the CLRG in its report on financial securities. Sections 15 to 20, inclusive, sections 51 to 53, inclusive, and sections 55 and 56 relate to documents submitted to the registrar and provide that those documents shall be in the prescribed form. Sections 6 and 8 provide a statutory basis for the registrar's approval of registered office agents, ROAs, and the electronic filing agents, EFAs, which are currently dealt with on an administrative basis. Section 9 provides that the registrar may require evidence to verify a company’s registered office address and may refuse to register documents if not satisfied. Sections 15 to 20, inclusive, sections 51 to 53, inclusive, and sections 55 and 56 prescribe the content and form of certain submissions to be made to the registrar.

Section 71 provides that a company may voluntarily submit information on to the composition of the board of directors by reference to gender. This is something I am particularly pleased about. The registrar shall provide any information collected to the Minister on an anonymised basis. Section 72 provides that the Minister may prescribe a fee for the provision of such company-related documents and data by the registrar to high-volume users.

Sections 84 and 85 give effect to certain recommendations of the CLRG in relation to financial securities. Section 88 is a stand-alone provision and amends section 1551 of the 2014 Act as it applies to captive insurers. It allows the required information to be included in certain reports or statements delivered to the registrar or the Central Bank in cases where the entities have no website. In terms of corporate insolvency, in May 2019 the CLRG submitted its report on the regulation of receivers and that included several recommendations in this area. Sections 24 to 28, inclusive, amend the 2014 Act by further strengthening the regulation of receivers, for example by providing greater transparency with regard to their fees. This is in line with the recommendations of the CLRG and the commitments made in the programme for Government.

Regarding the small companies administrative rescue process, SCARP, sections 31 to 50, inclusive, contain amendments that will provide greater clarity for stakeholders on the definition of the rescue period and its potential outcomes; increase transparency around the process adviser's fees and expenses; introduce prescribed forms when reporting to the CRO and the courts; and ensure the social and cultural importance of a company is considered by the process adviser when deciding whether it has a reasonable prospect of survival and is eligible to apply for SCARP.

Finally, Part 3 of the Bill contains sections 89 and 90, which provide for amendments to Acts other than the 2014 Act. Section 89 amends the Industrial and Provident Societies Act 1893 to provide industrial and provident societies with the option to hold virtual meetings on a permanent basis, similar to what is being provided for companies. Section 90 amends the Registration of Business Names Act 1963 to provide that the Minister may prescribe a fee for the provision of business name related documents and data by the registrar to high-volume users.

Enhancing our business regulatory environment and Ireland's attractiveness as a place to do business is a key strategic priority of this Government. We can do this by ensuring a regulatory framework which underpins our enterprise policy, is responsive and reflects international best practice to facilitate entrepreneurship, while also protecting employees, members, creditors and consumers with appropriate safeguards. It provides business certainty, enables entrepreneurs to take appropriate risks and supports the growth of enterprises, which all assist in job creation and protection. I am proud to commend the Bill to the House, and I look forward to hearing Deputies’ contributions and to working with them to progress this important legislation.

Deputy Louise O'Reilly

I thank the Minister of State for outlining the provisions of the Bill and the officials for all the work that went into it. We do not see a lot of what goes on behind the scenes, but we know that a huge amount of work has to go into getting to this stage. I am also conscious of the consultation.

This Bill is largely technical in nature. We look forward to engaging with it as it makes its way through the House. I will keep my opening remarks brief. I am minded by the pre-legislative scrutiny that was conducted by the Oireachtas Joint Committee on Enterprise, Trade and Employment. We had no particular observations to make because this is largely a technical Bill. I understand this is a priority piece of work for the Department, which can be assured that we will work with the committee and the Department to ensure there are no unnecessary delays, while also facilitating a full and robust discussion of the Bill, its provisions and anything that may arise in the course of our deliberations. Having said all that, there are some small issues to which I want to make reference and I hope we will have a chance to consider them further during the passage of this Bill.

It is understandable that this legislation is required to replace some of the temporary Covid accommodations. These accommodations were necessary. They were put in place at a time at which we all had to stay apart, but we obviously had to fulfil certain obligations. It is noticeable that the changes enforced on shareholder and other meetings, that is, that they be virtual, has been recognised for the benefit it gives to board members and shareholders. As such, it is not being fully rolled back. Rather, it looks as though some of those benefits are being retained. It is unfortunate that while the benefits of modern technology in enabling remote meetings and improving access are being welcomed in the boardroom and shareholder meetings, they are not being retained for ordinary workers, in the main. As has been seen recently at the Workplace Relations Commission, WRC, the Government's much-lauded right to request remote working does little to retain the many benefits that workers have from remote working. It will not be lost on any worker who has been forced from remote working back into the office that in our discussion today we are saying on the one hand it is very important that things can be done remotely, and that everything almost can be done remotely, but the Government is also saying to workers that it will not protect their right to work remotely.

While the provisions in this Bill are to be welcomed, we need to ensure the ability to move to virtual meetings does not remove a layer of corporate accountability. The ability of ordinary shareholders to attend the AGM and put their view was hugely important in the past, and we should ensure that virtual meetings are not a method to evade this accountability. That is something I look forward to having a discussion about. I fully appreciate it is easy to say it but it be a little bit harder to legislate for it. It is worthy of consideration, however. During the banking crisis, the ability of ordinary shareholders to attend AGMs and EGMs was very visible. The banks and other public companies were held to account in a very public way, and I do not think we should facilitate anyone avoiding that. I am not suggesting that anyone is necessarily looking to avoid it, but we need to be aware of it.

We also need to consider the low levels of digitalisation, which is especially true for our SME sector. We had a hearing in July at the enterprise, trade and employment committee and I want to thank Jean Carberry of the Department, who gave us some really useful information relating to the digital economy and society index. We know that only 66% of SMEs have a basic level of digital intensity. When we look at the various indices, there is definite scope for improving on this figure. A total of 37 businesses with more than ten workers are using big data. Again, there is huge scope there for improvement. More than half are using the cloud, but only 8% are using AI. This is something in which the committee has taken a particular interest in terms of digitisation. There is no reason that Ireland cannot become an international economic digital leader, and indeed that will facilitate some of what we are considering here in this Bill.

We need to see greater emphasis on the upskilling in digitisation within the SME sector. I put on the record now, although I believe it is on the record already, that we should be using the National Training Fund to drive this, set ambitious targets and achieve them. There is no sense in changing the law to facilitate more online and digital work if the people who were expecting to do it do not have the skills or the equipment that will be necessary to make it happen.

The briefing note I have states that the SME test confirms that no additional regulatory or cost burden will be imposed on SMEs by the provisions of the Bill and that, rather, the Bill, once enacted, should see enterprises avail of a more modern and flexible way of doing business, will aid them in their effort to decrease carbon emissions, provide greater flexibility in how the business conducts its business through the introduction of virtual meetings, and reduce the cost for small and micro-companies through amendment of the audit exemption regime. That is all very welcome, and those are all positives. We need to ensure that the aspirations of the legislation are actually achieved and we can do that best through dialogue. Sinn Féin looks forward to working with the Minister, the Department and the committee and having the opportunity to discuss this legislation further and make any changes or amendments as required.

Deputy Maurice Quinlivan

I thank the Minister of State for tabling this Bill and, like Deputy O’Reilly, I thank the officials, the people who have been working in the background and who often do not get the recognition they are due.

I welcome the opportunity to speak on this Bill, which is a technical one, as has been said. I welcome, in particular, a number of necessary alterations the Bill makes to corporate enforcement in this State. The enterprise, trade and employment committee, which I chair, worked well with the then Minister for enterprise as he worked towards the establishment of the Corporate Enforcement Authority, as a stand-alone agency at the time. I am proud of the role of our committee in helping to make this agency a reality in July 2022. For too long, white-collar crime was not pursued as vigorously as it ought to have been. The establishment of the Corporate Enforcement Authority sends a clear message that such crimes will be pursued and punished. These types of crimes in the main have two serious impacts, namely, the damaging of our international reputation and the impact on the costs consumers pay for goods and services. Crucial to whether the Corporate Enforcement Authority was to be a success was the increased number of specialists that were seconded to the agency.

The Bill we are debating today further enhances the powers of the Corporate Enforcement Authority and that is something I welcome. I most welcome the parts of the Bill that strengthen this authority. In particular, I welcome the insertion of a time extension allowed to the Corporate Enforcement Authority to appeal to the courts in cases where it has seized privileged material. The time period within which the Corporate Enforcement Authority must apply to the court for determination of whether the material it been seized is privileged legal material has been extended from seven to 14 days. The extension of this timeframe gives a great opportunity for the Corporate Enforcement Authority to assess material and make decisions on it. The establishment of a new category 2 offence regarding the obstruction and intimidation of Corporate Enforcement Authority staff is necessary and, furthermore, sends a clear message regarding the power and prestige of this agency. It is a welcome warning to those who may wish to undermine its work that such activity will not be tolerated and will be responded to fully.

Much of the Bill, as I said, is technical and relates to tidying up other legislation. While it may be tedious and technical, it remains important that such work is carried out diligently. It enhances the access the Corporate Enforcement Authority has to court documents and ensures the agency is notified under the amendment to section 132 of the principal Act regarding certain court applications within 14 days’ notice, allowing it to object. Section 65, which is particular to the Corporate Enforcement Authority , expands the gateways through which the Corporate Enforcement Authority may share information with other necessary authorities without the consent of the impacted company.

The amendment to section 944Q extends the number of relevant bodies that will have to now share information with the Corporate Enforcement Authority . Company auditors can have a key role to play in corporate enforcement. They see many documents in the course of an audit. Section 23 notes that where statutory auditors obtain information that suggests to them that there is a reason to believe a category 1 or category 2 offence may have been committed, they are obliged to notify the Corporate Enforcement Authority of their suspicion and how they formed their opinion.

Moving away from the Corporate Enforcement Authority , section 11 provides for the location and means of holding general meetings of companies, allowing such meetings to held outside the State, while also allowing for such meetings to be held in multiple venues through the use of communication technologies.

This is extremely welcome and solidifies the measure that was introduced during the Covid pandemic in the Companies (Miscellaneous Provisions) (Covid-19) Act 2020. It brings the legislation in line with current working realities in many industries where people dial into work both off site and on site.

Like my colleague, Deputy O'Reilly, I support the Bill. It is a necessary one that provides further strength to the Corporate Enforcement Authority. As a State, we have a poor record of dealing with so-called white-collar crime. With the establishment of the Corporate Enforcement Authority in July 2022 and the additional strength provided in this Bill, there is no longer a feeling of there being one rule for them and other rules for the rest of us. The Corporate Enforcement Authority has the power to vigorously pursue white-collar crime. I wish it all the best in its work going forward.

Deputy Darren O'Rourke

I welcome the opportunity to speak on this Bill and the provisions in it that will be of benefit. As Deputy O'Reilly said, we will continue to engage over the course of the Bill's passage through the legislative process. The Bill contains several important measures such as the exemption relief, the opportunity for virtual meetings, the enhancement of regulatory bodies and powers, and the extension to the review of privileged material from seven days to 14 days. It must all be seen in the context of supporting small business, which I am sure the Minister of State will agree is very important. We need a stronger regulatory framework to ensure that small businesses are supported, as they are the lifeblood of local economies.

I want to raise an issue in the business regulation and competition environment that has been brought to my attention. It is one that deserves additional attention. I refer to the role of the State and State agencies in supporting and working with businesses to the best possible extent. Sometimes they are in competition with small business. I have two separate examples in my constituency that have been brought to my attention during my time in the Dáil. In both instances, small IT developers developed a technology only to see the State, or part of it, essentially come in and undermine them or take them out of the game. A number of pioneering software developers in the agritech industry have come to me and said the State has not played a helpful role in supporting them. In fact, it was the exact opposite. I do not want to go into the exact details but I would appreciate if the Minister of State could take a personal interest in the matter as it is important to do so at a time when we are trying to encourage innovation and enterprise. At one time, these three software developers were in competition with one other. There is a role for the State and its agencies to get involved. They have a far bigger role, which can be a helpful one, but in this case the three pioneering software engineers are now all out of business. They all say they have concerns about the way the State supports enterprise. The matter deserves attention.

In addition to the previous issue relating to the agritech industry, I have been told about an issue in the sporting area. It is the same type of picture. I do not suggest there is anything untoward but it merits attention, especially given that we must support and encourage the digital economy at this time. The State has a role to play and it should be a beneficial and supportive one rather than a malign one. From the experience of the software developers to whom I refer, they say that there is potential for greater regulatory controls in the likes of the CCPC, and what we are talking about here, namely, corporate enforcement. I will personally correspond with the Minister of State on those matters and we can take it from there.

This legislation sits within a broader framework and it is very important that we get it right to ensure that we have an environment where we can do pioneering work, lead, and ensure that the relationship between the public and private sector is a healthy and robust one, as it should be.

Deputy Ged Nash

The Labour Party is happy to support the Bill. I will not use my full 20 minutes. It took three Sinn Féin members to use 20 minutes. In any case, it is, as Deputy O'Reilly says, largely a technical Bill. That being said, there are elements of this legislation that are critically important in terms of the practical implications of running a business and the streamlining of how businesses operate in this country and how they are regulated.

By and large, the measures should, when enacted, make the operation of businesses and the regulatory regime more efficient. It is important that any measure to make businesses more efficient does not throw the baby out with the bathwater. What I mean is that measures such as those provided for in the Bill ought not to involve any weakening, for example, of the regime on white-collar crime that has been built up over decades. When it comes to this Bill, my assessment is that it has got the balance right. For example, the graduated regime in terms of first instance late filing with the Companies Registration Office is positive. Mistakes or sins of omission, as opposed to sins of commission, can happen in the real world. I accept that in most cases where there may be a clear and genuine issue explaining a later return, there should not be a loss of the audit exemption for an SME. This makes sense and is best described as smart regulation.

I also welcome the additional powers for the Corporate Enforcement Authority to allow it to do the job citizens expect the agency's inspectors to be able to do. As the world becomes more complex, breaches of company law become more difficult to investigate and prove, and the white-collar criminal, or those we suspect of being involved in forms of white-collar crime, can be difficult to pin down. We should have a zero-tolerance approach when it comes to white-collar crime and corruption, which is what it is. Corporate crimes are not victimless crimes. Someone always pays. In the business sector, it is generally the compliant, law-abiding competitors who pay the price. We need a level playing pitch.

In general, Ireland has a good reputation as a fair place to do business and that must remain the case. If we are serious about maintaining that status, we must always keep a watching brief on the evolution of ways in which company law breaches take place, and ensure that the Corporate Enforcement Authority, the Companies Registration Office, those who are responsible for audits, and other statutory bodies are resourced. The law must keep pace with changing patterns of behaviour. The Company Law Review Group has a critical role to play in making sure the law keeps up with evolution in this space. Whether it is the criminal justice system, company law code or the employment rights code - our suite of legislation and regulation – those who do not wish to comply or who may be in breach are always one step ahead of the regulatory regime. We know that the making of laws is difficult. It is a lengthy process for good reason.

I am taken by the reference made by the chief executive officer of the Corporate Enforcement Authority, Ian Drennan, who welcomed the publication of the general scheme. He stated:

Amongst the measures being proposed are the conferral of new powers of investigation on the CEA in the area of information and evidence gathering, including new surveillance powers. The General Scheme also proposes to enhance information sharing across investigative and regulatory agencies.

These measures will, if enacted as proposed, further enhance the CEA's capacity to investigate suspected breaches of company law. The proposals also seek to streamline the court process for dealing with the availability to investigators of evidential material over which claims of legal professional privilege are being asserted.

He went on to say that particularly welcome are the proposals to create two new criminal offences related to interaction with CEA officers. He also said these proposals sent out a very clear signal that obstructing or threatening a CEA officer will not be tolerated and that anyone who does so risks facing a lengthy term of imprisonment. That is as it should be. We would not expect anybody to get away with impunity for threatening, for example, a member of An Garda Síochána or a customs or Revenue inspector. It should be the same when it comes to the Corporate Enforcement Agency.

I note there is provision in the Bill to provide for company AGMs to be held remotely online. We recall the debate in this Chamber at a very different time for our country and the world where we were required to pass legislation to allow company AGMs and the AGMs of credit unions, under the relevant credit union legislation, to take place online. As provided for in this Bill, this will be allowed on a permanent basis. I am taken by the remarks made by Deputy O'Reilly regarding online meetings and all of the consequences of that. I note this has been described in commentary on the Bill as an option. However, this option could be in danger of becoming the norm.

There are some dangers and risks of which we need to be aware. Running a company is a serious business. Directors have onerous responsibilities and obligations to staff, shareholders and their fellow directors. They have serious fiduciary responsibilities that, if not discharged responsibly, can and do have major consequences legally, reputationally, personally and so on. We need to be very mindful of that. If we are serious about real accountability, if this option then becomes the norm and the majority, if not all, company AGMs move online there is a real risk that our wish to ensure that, to the fullest degree possible, there is accountability and transparency and directors are held to a high standard by company members and shareholders, may not always be fully possible in terms of the online arrangements.

I will cite a local example of this. I will not identify the individuals involved or make reference to anything that might cast any aspersions, although we are in the Chamber. I am conscious of our responsibilities. It is a matter of public record in my constituency. In County Louth, we are dealing with a dispute between credit union members and the senior staff and board of a particular credit union entity. The dispute centres on a decision taken by the entity to, without any meaningful consultation, close two of the credit union's physical branches located in rural villages.

Affected members, on my advice and that of others, sought to properly convene a special general meeting in a local GAA club. That meeting took place last night. More than 200 members attended. They set about organising the meeting in a fully compliant way. Those involved are experienced credit union members and sought to have an in-person and important special general meeting in order to discuss the manner in which branch closures were handled by the elected leadership and management of the credit union. Members wanted an explanation, to which they were entitled,

That is something people should be able to take for granted. They should be entitled to have that. It is what any member or shareholder of a company or credit union is entitled to. After the members organised a public special general meeting, what happened next was quite startling. Those to whom the members ought to be directly accountable decided instead to hold an alternative special general meeting online. The implication was that the second meeting was the special general meeting and the senior staff and board would not attend the meeting members had organised.

I have spoken to many affected members about this approach and what occurred last night and over the past couple of days. As one can imagine, it is causing real disquiet in the community among members of the credit union who simply want accountability. Their chosen forum for that accountability was a special general meeting to be held in public. It is not unreasonable to ask for that, but instead an alternative was arranged, namely, an online special general meeting. I will not comment any further because there have been developments in this case today. Deputy Ó Murchú is well aware of the situation and attended the meeting last night. Unfortunately, I could not attend, but I have supported those affected members in recent months in order to have the accountability they require and to which they are entitled.

The conduct of credit union AGMs is a matter for the relevant credit union legislation, but I mention this case to point out the risks involved in company accountability and performance where the option is made available for remote online AGMs and they become the norm. They could be used by the directors of companies to avoid the accountability for which we should be aiming. I accept it is set out as an option in the Bill, but it could soon become the default for companies.

I note in the Bill votes and motions at AGMs held remotely would be by a show of hands. There are obvious problems that can strike us in that regard and I will tread very carefully. I am not convinced that a mass movement to online company AGMs is the wisest of moves. If it is to be enabled by legislation, we need to proceed very carefully and make sure there are sufficient safeguards in place to ensure that, where online AGMs take place, everybody is satisfied the maximum level of accountability can be delivered, there is maximum transparency and the system is not open to abuse.

Deputy Ruairí Ó Murchú

When we talk about business we want to ensure that businesses can thrive. We need to make sure we have all of the accountability and oversight necessary in place, as well as the means to facilitate business to happen. There has been much talk about accountability, powers of enforcement and oversight. At times like this, a lot of us deviate in respect of very specific issues in our constituencies.

I refer in particular to those businesses who find themselves under pressure, such as small businesses which have closed. Unfortunately, we have seen this happen a number of times. I also refer to the closure of Dell and the hopeful signs in respect of PCI. More than 200 people worked in Dell in Dundalk and obviously put in a huge level of work and effort. A significant number of people expected a larger-scale commitment. We hope that what was there previously is replaced.

In fairness to Deputy Nash, he dealt with an issue that has come up. It would be fair to say that we are talking about Connect Credit Union and the issues a large number of members had in respect of how the closure of Kilsaran and Clogherhead happened. They said there was a lack of engagement. Anybody looking on, no matter what their view is on this, would agree with that. In fairness, there were more than 200 people at the meeting yesterday. It was an incredibly lively meeting and everything was conducted in a very professional manner while, as Deputy Nash said, an alternative AGM was held online.

I am not sure any great service was done to the credit union movement in how this was operated. There is a considerable journey to go. The special general meeting took place. A huge number of members were present. A number of motions were moved, votes took place and correspondence was sent to the Central Bank and to others. A huge body of work needs to be done. I expect we will see a lot of movement in this area. However, if we are talking about accountability and enforcement, we have to make sure - I know this is separate from what we are speaking about - the credit union movement remains as it is, connected to people and a service for people. It must engage and talk and if decisions are made, they must involve all stakeholders, including members. There is a need for the Government to be over this issue.

Deputy Catherine Murphy

Speaking broadly about the intentions of the Bill, we will be supporting the legislation. It contains some logical and practical provisions. Some Covid-19 legacy legislation is hanging around the House and we see another piece here, addressing the issue, for example, of remote meetings, which can be an option on a permanent basis in the right set of circumstances.

The framework that will govern this is clear and it is set out well in the legislation, including that notice for virtual or hybrid meetings must clearly identify the platform to be used; access, participation and voting must all be set out in advance; and even what should happen if the technology fails. We have long had the technical means to do this, before the Covid-19 pandemic. Covid-19 mitigation measures forced us to do things differently. Not many of us would disagree that it was a good thing in some respects. We should not lose the benefits, where they exist. We all - I use the word loosely - enjoy the benefits of remote work and remote meetings, when you are not bored silly with Zoom meetings. It has been possible to hold meetings remotely where that was not commonly done before. In not having to commute or travel halfway across the world for board meetings, there is an environmental benefit to be gained with regard to the potential for cutting down on corporate miles and so forth. That aspect is beneficial.

There are a number of new measures in the Bill associated with involuntary strike-off of companies for basic failures in the area of good governance, for instance housekeeping and the failure to notify the Companies Registration Office of a change in registered offices - a number of such things have been included - a void in the recorded company secretary at the CRO and being remiss about providing beneficial ownership information to the central register of beneficial ownership as notified by the Registrar of Beneficial Ownership. I do not have an issue with those provisions that will expand on the existing reasons for involuntary strike-off outlined in 2014, but I will come back to beneficial ownership in more detail shortly. I have a few things to say about areas the legislation will not capture, some serious things that need to be captured.

My understanding from reading the Bill is that the Corporate Enforcement Authority, CEA, will have broadened powers for investigating breaches of company law. This is to be welcomed, but before I do so, I will roll back to when the CEA was devised and established. There was a serious issue with resourcing. I remember the tussle that went on between a few bodies, including An Garda Síochána and the CEA about the secondment of staff who were gardaí as there was a need to have the powers to interview, arrest and so on. A memorandum of understanding, MoU, between the director of corporate enforcement and An Garda Síochána was eventually drawn up and signed. It took a year to get the personnel in place and it was a gigantic frustration for those of us who were given an assurance that this would come into being on a particular date. We were constantly asking questions about it. The MoU was subject to periodic review. How many reviews have taken place to date? Have any issues emerged that required action? It is one thing to allocate more powers, but unless those powers are properly resourced, they will not have the practical effect intended. Will the Minister of State tell the House the number of people who are seconded and whether it is almost a permanent secondment? If people are put in they will become experts. If they are then moved out, there will be a loss of institutional memory. I regret that the ability to recruit people as permanent employees who had those powers was not included in the legislation and in the CEA. That would have been a better way to go. Will the Minister of State address that issue in her wrap up?

The framework sets out such matters as co-operation, communication, training and resourcing, to name but a few. Let me give an example of something that emerged between the CEA and An Garda Síochána. A recent media piece by Ken Foxe detailed some friction between the two bodies due to seconded Garda officers that stemmed from traditional overtime payments. These payments were for pre-shift briefings between colleagues. That is time in work. It gives us a glimpse of the kinds of things that are happening in the agency and it would be useful for us to have a response to those kinds of issues that have emerged.

I will move on. The audit exemption and the thresholds for retaining that privilege, especially for those in the micro and small enterprise sector, are useful. There can be genuine reasons for late filing. Small operators have 101 things going on and often the burdens of running a business and the cost of getting those filings in on time can be a problem. However, we should not ignore that there has to be good governance. I welcome a relaxation of the law. It is proportionate because it does not remove the obligation to file, rather there will be a graduated sanction with which we can live.

We produced a document on an independent anti-corruption agency. We published it and have been talking about it since we were founded because we have a lot of siloed organisations. We need to look at how we can have a bigger organisation that can deal with issues. We looked at the state of Victoria in Australia as an example. That is the one we settled on. Resources can be moved around as needed in an organisation that is big enough. We have lots of silos that have limited resources and do not have the flexibility to do that, and we could do things differently.

I was reading the explanatory memorandum in the first place because I was looking at things I wanted focus on. Section 4 amends section 2 of the Companies Act 2014 which sets out the definition of terms used throughout the Companies Act 2014. Section 4 inserts a new definition, the definition of the register of beneficial ownership. I thought it would go further and it may. The Minister of State might tell me if I am misreading the situation. I will use a few examples to test it.

As members of the public, we should be able to see who is the beneficial owner of a company, particularly if it is getting State contracts. I am not sure whether we can fully do that. I have seen several individuals make very large purchases of buildings who did not appear to have the means to do so. They were awarded State contracts for accommodating international protection applicants and facilitating homeless services for the Dublin Region Homeless Executive. In those instances, I queried whether the individuals in question were the beneficial owners of the companies and posed questions about shadow directors. Obviously, both categories of people I referenced need to be housed. To be clear, I have no issue whatsoever with that. However, when a company is in receipt of significant contracts from the Government and local government, knowing who the beneficial owner is surely is the very least we should expect.

I have in mind a particular example. The Ceann Comhairle will be very pleased to hear I will not be naming individuals or locations. I know of someone who is on a disability payment who is now at the centre of a multimillion euro business. One of the buildings purchased by this individual for more than €20 million received a contract for ten years for an amount in excess of €86 million from the Dublin Region Homeless Executive. I am horrified in the first instance that there is an expectation that homelessness will continue to be an issue in ten years' time despite the commitment or objective that it will end in 2030. That aside, I do not believe for a minute that the named person is the beneficial owner of that building. I have done credit checks and cross-referenced the many companies where that individual and other individuals with the same profile, who have very limited means, are listed as directors. There are multiple companies involved.

I wrote to the Corporate Enforcement Authority setting out some of my concerns and asking for a response. It is my view that the authority gave the queries I put to it serious consideration. I was of the understanding that a shadow director is someone who is not an appointed director of a company but is the beneficial owner, with someone else acting as a front. Such practice may well be legitimate in some cases. In other cases, it is very questionable. We must make sure our legislation gets to the people and situations where there is very questionable activity happening. I have a pile of documents, running to a depth of 10 in., comprising some of the material I have gathered. It seems clear to me there is a gap in the law. I might be wrong, however, and this legislation may well be plugging some of that gap. Is it always the case that the beneficial owner is seen as the beneficial owner? When we have a situation where a Department is granting a contract and the person to whom the contract is awarded is understood not to be the beneficial owner of the company in question, there is something really odd about that.

I got quite a lengthy reply from the Corporate Enforcement Authority to my queries. It included the following:

The Corporate Enforcement Authority has considered all instances in the Companies Act 2014 referring to shadow directors and no company law offence arises by virtue alone of operating as a shadow director. A shadow director is a person in accordance with whose directions or instructions the directors of a company are accustomed to acting through that person, though that person is not formally appointed as a company director. This definition is set out under section 221 of the Companies Act 2014. While not formally appointed as a company director, any person acting as a shadow director may still commit certain offences under the Companies Act 2014 and those persons shall bear the responsibilities that apply for the company directors generally.

Section 228 sets out a statement of company directors' principal fiduciary duties. These include, amongst others, the duty to "act in good faith in what the director considers to be the best interests of the company" and to "act honestly and responsibly in relation to the conduct of the affairs of the company."

If someone is a beneficial owner of a company and he or she is not declaring it, how do we get to that information? Where is that set out as unlawful? The Minister of State might point me in that direction. I would be happy to meet with her officials to outline some of the issues about which I have concerns. I am frustrated that there are situations where somebody is very obviously gaining and not declaring that gain. That person is the beneficial owner but somebody is providing a front - I can point to more than one instance of this - who simply does not have the means to purchase properties worth in the millions of euro. That is what is happening. That is my primary concern. There is an opportunity in the legislation to close off something and I am concerned that the opportunity is not being taken. Perhaps it is being taken, in which case the Minister of State can point me in the direction of where it is being done, if I am incorrect on this.

Deputy Michael Collins

This Bill aims to improve company rules set out in the Companies Act 2014 by enhancing corporate governance, ensuring companies follow regulations, streamlining daily operations and managing insolvency cases. It promises better management, increased transparency and stronger oversight. However, it may face challenges in its implementation and arising from additional costs for companies. Companies can be made up of all types of ingredients. A company can be a local community or voluntary organisation. Many such organisations definitely will not be creating any of the problems envisaged by the Government in putting forward this Bill. The problem is that all companies, including community and voluntary organisations, will be under the same umbrella of imposed correctiveness and added costs.

I was at a community meeting last Sunday morning at which we were told our accounts might have to be audited and it will cost €4,000. In the name of God, where is all this money to be found by voluntary organisations? They are on their knees. They are looking for help, not to be crucified even more. Unfortunately, I have noticed since the Covid period that quite a lot of voluntary organisations are disbanding. A lot of people have walked away and not come back. They got a break, perhaps after working for years, and just could not face back into the workload being put on them. I strongly advise the Minister of State to make sure there is a difference in treatment as between companies that are voluntary organisations and companies that are making huge profits. If that is not done, there will be more problems lying ahead.

Small businesses are struggling. We see that on a daily basis all over the country. Doors are closing. That is down to the increased VAT rate and other added costs. Businesses do not know what is going to happen. As well as the added costs of the increase in VAT from 9% to 13.5%, there is the cost of electricity, the cost of staff and the red tape and bureaucracy that arise when it comes to getting anything done in this country. One place of many that closed recently is a café that served the people of a beautiful small town near me. Nickie's Kitchen was loved by everybody who came through its doors. It had a wonderful owner and staff and wonderful produce. The town of Schull was proud to praise Nickie for what she did for us for so many years. She looked after people in that community so kindly. The added costs make it impossible for people to go on. There are many more businesses like Nickie's Kitchen closing their doors, mainly down to costs and the bureaucracy attached to doing business. The doors of that wonderful café in Schull have closed. It seems to be one thing after another in this country when it comes to small businesses. This was a business that should not have closed. It should have been helped, not crucified.

I was across the road earlier today to meet the people from the VAT 9 group that came up from west Cork. Those ten or 15 people are giving up their time to try to save businesses throughout the country dealing with the huge increase in the VAT rate from 9% to 13.5%. There is a lack of understanding about this. When I was coming up to Dublin earlier in the week, I met somebody who has a restaurant in a filling station in west Cork. He said it is not possible to separate the VAT. The Government seems to be down on top of businesses like that. The people who open the door of a business are the people to be taken on.

They are the people the Government should be assisting. The Government has a focus on massive companies in this country and making sure they are okay, but the people who provide six, seven, eight, ten or 12 jobs in the local community are absolutely forgotten and destroyed. This VAT 9 group, which I was delighted to meet, is in with the Minister, Deputy Chambers, now pleading with him in advance of the budget next Tuesday. It should not have to plead with him. There should be common sense. Why would the Government allow hundreds and hundreds of restaurants and cafés throughout the country to close and throw a blind eye to them? It is beyond me. At the top, this Government is completely out of touch as to what is going on. If the Minister of State wants to come down to my constituency, I will drive her past the cafés, pubs and businesses that are all closed. God damn it, I am not making up a story. They are the people telling me what is wrong out there. I am not coming in here to mislead the Minister of State in any way. I know she will say this is the companies Bill, but companies, businesses and community voluntary organisations will suffer a lot from this as well. I meet the fishermen and they are desperate for their permits at the moment. Overseas fishermen have applied for these permits but are waiting far too long.

I could go on forever about businesses that are in trouble. The Minister of State has to understand that is what I have been told on the ground.

Deputy Mattie McGrath

I too am glad to get a chance to speak on this. It is interesting that we are discussing companies and corporate business when we have seen over the decades what has happened in corporate governance and the lack of it. We could refer to the children's hospital or umpteen cases of poor corporate governance. I have to declare an interest in that I am a director of a small business that employs 25 people. The excessive regulations and the weight on small companies is just unbelievable. I know that everyone has to keep within the guidelines and within the law, and every small company wants to do that and does that, but any person who does not pay their taxes gets hit with huge Revenue bills, savage interest - penal interest, I would say - and penalties. RTÉ, however, whose accounts and bogus self-employment we have been discussing, has a €15 million fund put away in anticipation of a settlement with Revenue for wrongly classifying employees. You could call it fraud. It is very serious. No small business gets that leniency from the Revenue, and this is a big bugbear of mine. Deputy Collins mentioned the whole situation of small businesses closing. They are disappearing before our eyes, and it is because of too much corporate governance and too much interference from Big Brother. It is unbelievable. I do not know what this legislation will do for it, but we have to cop ourselves on. We are being tied up in bureaucracy. There are more new statutory instruments and new regulations coming out all the time, and many of them have been lobbied for by, I do not know, non-governmental organisations and everybody else. I do not know who dreams them up but they are making it extremely difficult for small businesses to continue. Small businesses are the backbone of any community in rural areas and villages and every place else. They are the real backbone. We should have agencies out there. We have the National Employment Rights Authority, NERA, which visits different hotels and companies and comes in at 12 o'clock at night. There is a different pay rate from midnight onwards. NERA might come in only at 12.05 a.m. What we need is for it to be redirected to go into businesses and say, "We are here from the Department of enterprise and we want to know if there is any way we can assist you in your company or if there is anything you want to talk about." Who consults and goes to talk to businesses and gives them a listening ear? That is what NERA should be doing but it is not. It is all stick and no carrot. Ordinary people want to work and create employment and businesspeople want to create employment, but if we do not cop on to the over-regulation and the excessive interference, we will smother and cloak every business in the country. It is a wake-up call and it has been going on for yonks.

I will not say much more on it tonight but I am just making the point that we need supports, not restraints, encumbrance, overzealous regulation and so on. That is the situation, as far as I see it.

Deputy Michael Healy-Rae

Anything I will say is absolutely nothing personal against the Minister of State. She is an excellent person and I admire her very much on a personal basis. In the honour of God, however, has the Government gone simple or what? Look at what it is doing. The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill aims to enhance and strengthen the enforcement and regulatory provisions within the Companies Act 2014. A Cheann Comhairle, you have been around for a long time. The Government is talking about governance and more regulations at a time when 50 restaurants a week are closing in Ireland. There are more small businesses, including small shops and hairdressers, shutting down. There are people going out of business like the birds migrating, and here we have people talking about more corporate governance. My good God, if anybody were looking in at this tonight, they would say the Government had gone simple. If I thought it was doing something to help business, if I thought that tonight was about helping people-----

(Interruptions).

Deputy Michael Healy-Rae

I do not care if there are parties here that are grumbling or something. If they are not interested in work or businesses-----

Deputy Louise O'Reilly

It was the use of the word "simple".

Going away from that, however, and coming back to what we are talking about, which is business, I am grateful to the big tech companies - of course I am - but I am also very grateful to the man and the woman who maybe have a small company. They might have no employees. It might be themselves, one or two, or it could be the neighbour or five or six people. They are the backbone of Ireland. I and this man here on my left-hand side are up here with our shirts off, fighting for those people from County Kerry and for small business. If a message needs to go out that there are people mouthing under their breath about me or complaining about me when I am saying something about business and saying that I want business, if there are political parties that do not like business, if they think that everybody can be idling and can live off nothing, I say to them that people have to work to pay tax. That is what makes this economy turn and that is what keeps us all going. If there are representatives in here who have a problem with work, that is their own business and they can talk to the mirror if they like.

I am really upset about this because I am worried about what more pressures it will put on small businesses. Every day of the week, these people are struggling. They are dealing with every type of agency of the State. The minute you start a business, you first of all have the problem of your own finance, your microfinance, trying to borrow money, whether it is leasing, getting loans - whatever business you are at.

That issue has to be dealt with. All the governance has to be dealt with also. I am not trying to say we should not have governance. We have to have it, of course. People have to keep their books right, but there is a thing called common sense, balance and giving people a chance. There was a time when people were given a chance and there was a bit of leeway. It seems that now, the minute a person opens a door, whether it is in a small village, in a big town or in a city, he or she will have every type of person coming in the door looking for something from him or her, and I mean people looking for something down to the smallest of things. Every person and letter that comes through the door puts more penal servitude and hardship down on top of the person, trying to see what way they can screw him or her up against a wall, while, at the same time, all the person is trying to do is create a business.

How can young people be encouraged to go into business? I see young tradesmen trying to start out, who are great at their trade and gifted with their hands, but for whom, maybe, it is difficult for them to try to do the books side of it. They are doing their best. It can be a struggle. Farmers now would want to be careful when marrying. They should nearly marry a bookkeeper or an accountant to be able to keep the house order. It has gone that way. I do not wish to eat into Deputy Danny Healy-Rae’s time.

Deputy Danny Healy-Rae

I am glad to get the opportunity to talk about this proposed Bill. I have taken enough guff taken from people inside this Chamber condemning people who employ people. I happen to be one of those people for the last 40 years and more. My son is doing it now. Friday evening comes very quick when a person has a number of people to pay. The pay is one thing; there are people at home waiting for them to come home with the package of money to keep their household going. There are so many rules and regulations now. It is impossible for small businesses. It does not have to be a company but it can be a sole trader. They are met with the same kind of rules and regulations daily.

Think of the minimum wage. I supported increasing the minimum wage, but it had a domino effect. The wages of all those on higher wages had to go up. That has to come out of the employers’ pocket or accounts. We have no problem favouring the multinational companies which come to Ireland. We all applaud Apple for the employment, the work and all the pay packages it gives people where it is operating. At the same time, however, it seems to be able to get away with paying a certain amount of tax. We saw the Government trying not to take the money. There are plenty of holes here for the money. RTÉ did everything wrong and, instead of being promised a surety of the television licence, it is getting €750 million over the next three years to ensure it stays afloat. It is the workers with the small pay packages who are going to be affected.

Small businesses in Killarney, Kenmare, Killorglin, Castleisland, Cahersiveen and all around our areas are all struggling to keep going. They are being hit in so many different ways. Look at what the Government has done to the rates. It has tripled the rates for businesses in the town of Killarney, Killorglin and Kenmare.

Deputy Emer Higgins

No, we did not.

Deputy Danny Healy-Rae

It is the truth. Do not deny it.

Deputy Emer Higgins

The local authority is responsible for the rates.

Deputy Danny Healy-Rae

Businesses are struggling in Kilcummin and all around the place to pay the massive rates that is being demanded of them. Before the new rates regime, traders were able to pay in two payments per year. That has gone down to one payment. They must come up with all the money at the one time. There are all these things.

I refer to the cost of electricity. I will remind the Government of the closure of Bord na Móna every day of the week and all the weeks in the years ahead. Every day since it closed Bord na Móna, the cost of electricity has gone up. What that has meant for and the burden that has placed on businesses trying to stay going is unreal. Fianna Fáil and Fine Gael did that at the behest of the Green Party and I will never let them forget it. It was the Green Party tail which was wagging the Fianna Fáil and the Fine Gael dog. Government parties must accept that when they go to the doors, whether it is in November, December or February, the people will tell them what they have done. They have closed a lot of businesses down. They will have to face the music when the tune will be played in front of them.

Government wants to put more regulations on businesses now, one way or another. The Minister of State shakes her head but that is what is happening. I will not be voting for it, whether the vote is tonight, next week or the week after. I will not be voting for any more regulations on small businesses and companies which are trying to rent buildings to operate out of and trying to employ people and given the cost of electricity and all of those things. The people who are paying for everything, that is, the people who are working, the self-employed and the small businesses employing people, are the ones the Government wants to hit and nail more. The Government wants to nail them to the cross, like our Lord. People are going to stand up and rise up against it, however. The Government will have to face the music when the people cast their votes and the boxes open. The Government will gets its answer for what it has done to people.

Farmers, in a way, are small businesses also. Government wants to regulate them more, as it does for all of the people who are working. We will not stand for it anymore.

Deputy Louise O'Reilly

I wish to make a brief point of order.

I thank Deputies - for the most part - for their overall support for this Bill and for the comments I have heard this evening, many of which have been very helpful. I thank my officials from the Department who have steered this Bill through pre-legislative scrutiny and in the Chamber today. I wish to respond to some of the comments made.

Deputy O’Reilly referred to the need to support employees in remote working as well to support those on boards. I fully agree with that. That is why this year the Government brought in a legislative right to request remote working. That is now been supported by a code of practice for both employers and employees. Deputy O’Reilly also spoke about digitalisation and upskilling. Deputy Healy-Rae might be interested in this as he also asked about how we are going to support SMEs with digitalisation. I am pleased to confirm that the digital transition fund, which is Next GenerationEU funding, is using €85 million to support SMEs with digitalisation. Today, Enterprise Ireland and the National Cybersecurity Centre launched a new cybersecurity review grant of up to €3,000, which will be available from today onwards.

I will speak to Deputy Catherine Murphy's points next. I will come back to the other Deputies who are not present in the Chamber at the moment.

The Deputy mentioned that Covid forced us all to do things differently from a working perspective. I fully agree with that. She acknowledged the environmental benefits as well as the work–life balance benefits of doing more online. I fully agree with this. She also mentioned the need to allocate resources alongside powers. That is something we are absolutely striving to do. The Deputy asked specific questions about the CEA. I can confirm that the overall headcount is 88. The number of gardaí seconded to the CEA, which was asked about specifically, is 16. That is more than double the number this time last year.

With regard to the register of beneficial ownership, which Deputy Catherine Murphy mentioned, the relevant legislation is under the Ministry for Finance, but I will pass on the Deputy’s feedback. The CRO manages the register only but the Bill makes amendments to enhance the process carried out by the registrar of companies. I am glad to hear the case the Deputy raised was, when she escalated it to an agency, dealt with in due manner. I reassure her that amendments in this Bill provide that the register of beneficial ownership may strike a company off for not providing information on beneficial ownership. I hope that is good news and reassures the Deputy.

Deputy Michael Healy-Rae should note I am pleased to confirm I have not lost my senses. I am glad to say there is no need for him to be so upset. He stated this Bill will place an additional onus on companies. I am glad to confirm it will not. I am not sure the Deputy read the information we supplied but, if he has it available to him, he will note the Bill does not in any way put an additional burden on businesses. In fact, it actually reduces it, and that is why so many parties in the Opposition have supported the Bill today. It is very much about supporting SMEs. That is something I am fully committed to as Minister of State.

Deputy Healy-Rae mentioned digitisation, microfinancing and the ability to draw down loans. I wish to let him know, in case he was not aware, that last month we doubled the amount that can be drawn down through microfinancing, which has been of great benefit to entrepreneurs, microfinancers and SMEs. The Deputy mentioned the phrases "common sense" and "balance", as did many today. Many who did so felt the legislation delivered from a common-sense perspective and struck the balance necessary. I am really pleased about that.

I confirm to Deputy Danny Healy-Rae that it is his local authority that has responsibility for setting rates, as he may be aware. I believe he has many colleagues sitting on Kerry County Council and I hope they can help him in this regard.

Deputy Danny Healy-Rae

That is not right either because-----

Deputy Emer Higgins

I assure Deputies Collins and McGrath-----

Deputy Danny Healy-Rae

-----it is a Government Department.

Deputy Emer Higgins

-----that there will not be any additional costs for SMEs due to the passage of this Bill. I reassure them that, as Minister of State with responsibility for this matter in the Department of Enterprise, Trade and Employment, my commitment is to reducing bureaucracy and unnecessary red tape and making it even easier to do business here in Ireland. We heard statistics earlier from a competitiveness perspective on how easy it is to do business in Ireland, but I agree there are barriers. We need to remove them where applicable.

I agree with Deputy McGrath that SMEs are the backbone of our economy. In fact, as a group they comprise the largest employer.

Regarding consultation, which was raised a number of times, I chair the SME and entrepreneurship task force, which presents a great opportunity for consultation with the sector.

Let me refer to the remarks of the Deputies who are not present so they will have my comments on the record. Deputy Quinlivan should note that this Bill will support the work on corporate accountability and the work of our corporate enforcement agency. The budget for this year was €11.1 million, which represents an increase of 14% year on year.

I am happy to look at Deputy O’Rourke’s individual case. When I visited the National Ploughing Championships only last week, it was fantastic to see that so much innovation is happening in the agri-tech sector. This was very visible in both the local enterprise office tents and the Enterprise Ireland village. I was really pleased to see that.

Deputies Nash and Ó Murchú mentioned the need to have safeguarding legislation. I am aware they have a particular issue in their constituency. I cannot necessarily comment on it as it is not part of my brief as Minister of State, but I hear what they are saying about online arrangements and their concerns in this regard. In drafting this Bill, great attention has been paid to the conduct of meetings and ensuring there are safeguards. These go as far as voting rights, which is really important.

The Companies Act 2014 bestows the privilege of limited liability for companies, and in return for the privilege companies must adhere to the duties set out under the Act. Therefore, because of this Bill, the CEA, IAASA and the CRO can continue to be adaptive to changing business practices, responsive to policy in their roles of oversight, supervision, regulation and enforcement, and have the necessary powers to deliver on their statutory functions.

I assure the House that supporting SMEs is a major priority of mine and of the Government. Members might be interested to know that the SME test was applied to this Bill. The outcome, as I explained to Deputy Healy-Rae, indicated no additional costs to and burdens on SMEs. In fact, the opposite was shown. This Bill will see SMEs benefit from pro-enterprise reform, such as the amendment of the SME audit exemption.

The Minister of State, Deputy Calleary, looks forward to working with the House during Committee and Report Stages of the Bill, which, as I mentioned, was developed with strong stakeholder engagement and the support of the Oireachtas committee. I hope there will be cross-party support to ensure we get this Bill enacted as soon as possible. I hope my comments have dissuaded certain Deputies who said they would vote against this Bill to instead support a Bill that is pro-SME, pro-enterprise and pro-jobs.

Question put and agreed to.

Dáil Éireann debate - Wednesday, 25 Sep 2024

Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024: Second Stage

Dáil Éireann debate -
Wednesday, 25 Sep 2024