Is cúis áthais dom a bheith ar ais arís i Seanad Éireann chun labhairt ar an mBille seo agus tá súil agam go gcuirfidh sibh go léir spéis sa Bhille an-tábhachtach seo. Le bhur gcomhoibriú tá súil agam go mbeidh sé tríd an Teach seo go han-tapaidh.
I am very pleased to bring forward to the Seanad these proposals in the area of company law. This is the second time this year that I have brought proposed company law legislation before Seanad Éireann. As Senators will be aware, the Companies (Amendment) Act, 1999, which was enacted earlier this year, exempted price stabilisation actions in the context of the issue or offer of securities from the insider dealing provision of Part V of the Companies Act, 1990, and from certain of the disclosure requirements in Chapter 2 of Part IV of the same Act.
The proposals in the Companies (Amendment) (No. 2) Bill, as passed by the Dáil, provide for amendments to company law in a number of areas. The main amendments are in the following areas: amendment of the Companies (Amendment) Act, 1990, relating to examinership, which is dealt with in Part II of this Bill; amendment of Companies Acts, 1963 to 1990, and the European Communities (Accounts) Regulations, 1993, to provide for the removal of the statutory audit requirement for certain private limited companies and partnerships – Part III of this Bill covers this; additional requirements in company law to tackle the problems created by Irish registered non-resident companies; amendment of Part XIII of the Companies Act, 1990, which deals with investment companies; and amendment of section 21 of the Companies Act, 1990, which provides for the publication or disclosure of information that has been obtained under sections 19 and 20 of that Act.
The proposed changes in these areas are dealt with in Part IV of this Bill. A number of other changes are also being made in Part IV in relation to the timeframe within which summary prosecutions must be initiated, as well as amending section 16 of the Investment Limited Partnership Act, 1994.
It might assist the House if I briefly summarised the origins of the legislation in each of these areas. I will then go on to explain in somewhat more detail the content of some of the provisions themselves. Where relevant, I will draw the attention of Members to the important amendments introduced to this Bill during the various stages of its debate and subsequent passage through Dáil Éireann.
The proposals for the refinement of the examinership legislation and the removal of the statutory audit requirement, for certain private limited companies arise directly from the report of the company law review group, which reported to the then Minister in December 1994. The report was published in February 1995.
At an early stage, the decision was taken to implement, on a phased basis, those recommendations in the report which were considered appropriate, starting with those in relation to examinership and the removal of the statutory audit requirement. However, for various reasons, the proposals were not progressed to draft legislation until the present Bill was published some time ago. That is not to say that other legislation was not progressed in the company law area because, in the interim, regulations to provide for the uncertificated transfer of securities were made pursuant to section 239 of the Companies Act, 1990. The Irish Take-Over Panel Act, 1997, was also enacted. One European Union directive in the company law area, dealing with the application of the second EU company law directive to subsidiary companies, was transposed into Irish law. Two regulations were made consequential on the establishment of the Irish Stock Exchange Limited as a separate entity, from being the Irish unit of the International Stock Exchange of the United Kingdom and the Republic of Ireland. Furthermore, work on tack ling the problems created by Irish registered non-resident companies, to which I will refer shortly, also took up a very significant amount of time during this period.
The provisions in Part I of the Bill are standard to most legislation. The collective citation of the Bill was amended in the Dáil to take account of the enactment of the Companies (Amendment) Act, 1999, dealing with stabilisation – to which I referred earlier – and to include a reference to the Companies (Amendment) Act, 1990, which had been omitted from the Bill as published.
Turning to the proposals to refine the examinership process, it will be recalled that examinership was introduced into Irish company law in the Companies (Amendment) Act, 1990. The underlying rationale for the examinership process is to assist companies that are in difficulties to address those difficulties, if at all possible, rather than have the company either put into receivership or liquidation. The Company Law Review Group was representative of a wide range of interests. It concluded that the examinership process, which involves the impairment of the rights and interests of creditors and competitors of any company which avails of the process, might be justified in the case of ailing but potentially viable companies that have been unable to ensure their survival by voluntary arrangements with their creditors, but where the imposition of a scheme of arrangement might facilitate their survival without undue impairment of the interests of their creditors, their competitors or the commercial environment (paragraph 2.11 of the report).
Within the review group, and in many of the submissions made to the group, there was the belief that examinership, albeit in a modified form, is a useful mechanism which should be available in Irish company law (paragraph 2.8 of the CLRG report). The group took the view that there should be a greater focus on viable companies and more recognition for the position of creditors. In general, I have accepted both the conclusions and recommendations of the CLRG and the present Bill will implement most of its recommendations.
To achieve a better focus on viability the group recommended that the examinership process should be modified so as to provide that the court should not appoint an examiner to a company unless there is a reasonable prospect of survival of the company or the whole or part of its undertaking. Paragraph (b) of section 5 will now insert such a requirement into section 2 of the Examinership Act, 1990. To assist the court assess whether this is the case, the group recommended that a report of an independent accountant should be available when the petition for the appointment of an examiner is made. In this regard section 7 will in future require the submission of such a report and sets out the matters that must be contained in the report. This is the material that is compiled by an examiner under section 16 at present but would only be available 21 days after an examiner is appointed. A small number of additional matters have been added to what must be included in the report. For example, paragraph (j) requires details of the extent of the funding that is likely to be required during the course of the examinership.
It is recognised that in exceptional circumstances it may not always be possible to have the report of the independent accountant available to accompany a petition for the appointment of an examiner. Section 9 contains provisions to cater for this eventuality. A ten day period of interim examinership will be allowed during which such a report may be prepared, subject to meeting the specific terms contained in the provision.
Following discussions at Dáil Committee Stage two amendments to this section were agreed. They made it clear that when the ten day time limit expires on a Saturday, Sunday or public holiday, the deadline for submission of the independent accountant's report is extended to the next working day. Because of the changed requirements to demonstrate a reasonable prospect of survival and the preparation of the independent accountant's report a number of consequential amendments are necessary to the Examinership Act, 1990. These are contained in a number of sections. For instance, the amendments in sections 8 and 12 are directly consequential on the introduction of the reasonable prospect of survival requirement. Section 11 makes appropriate provision for the manner of making available copies of the independent accountant's report to the company and other interested parties.
Section 14(a) is consequential on the fact that the court will have the independent accountant's report available at the petition stage and reduces the period of examinership from three months to 70 days. The possibility of an extension of up to 30 days by the court contained in section 18(3) of the original Act will remain an option.
In relation to giving more weight to the position of creditors who have to bear the brunt of the pain in an examinership, by virtue of the amendment contained in section 10 of this Bill they will now have a statutory entitlement to be heard when the petition for the appointment of the examiner is being considered by the court.
While the expenses of an examiner will continue to be payable in priority to all creditors, secured and unsecured, any liabilities certified by an examiner under section 10 of the original Act will no longer rank in priority to secured creditors. However, such certified expenses will continue to have priority over floating and unsecured charge holders. The necessary provisions to effect this change are contained in section 28.
A number of the other changes are being made to the examinership process. Section 6 is designed to remove the requirement contained in the 1990 Act whereby any company, which is directly or indirectly supervised by the Central Bank, can have an examiner appointed to it only if the petition is presented by the Central Bank. By virtue of the amendment contained in section 6 this will remain the case in respect of credit institutions, whether they are banks, building societies or such like which operate as companies. However, in the case of other companies which are directly or indirectly supervised by the Central Bank, the company or its members, directors or other interested parties, or the Central Bank itself, may individually or collectively present a petition to the court for the appointment of an examiner to such a company.
In the light of the experience with cases which have come before the courts, and as recommended by the CLRG, a specific obligation is now being imposed by section 13 on all parties involved in the examinership process when dealing with the courts to disclose all material information to the court. They must also exercise utmost good faith at all times.
By virtue of the repeal of section 5(2)(h) of the original Act contained in section 14(b)(ii), banks will no longer be prohibited from exercising their right of "set off" when an examiner is appointed to a company. This provision will enable a bank to effectively establish its net position, whether positive or negative, in relation to a particular creditor to whom an examiner has been appointed. It is this net position that will then obtain as to whether moneys are owed or owing to the bank.
Section 15 introduces a restriction on what payments can be made during the examinership process in respect of liabilities incurred prior to the presentation of the petition. In future, but subject to the discretion given to the court in subsection (2), such payments can only be made where the independent accountant's report specifically recommends that this be done. The idea here is to ensure that all interests, including the court, will be aware of what is proposed and interested creditors who are opposed to such payments will have the opportunity to express their concerns to the court.
Sections 16 and 17 are designed to clarify the law in circumstances where a receiver or provisional liquidator has been appointed to a company which subsequently becomes the subject of a petition for the appointment of an examiner. Section 18 amends the circumstances under section 7(5) of the 1990 Act whereby an examiner can repudiate a contract. In future this will be limited to circumstances where the contract is entered into after the examiner is appointed to the company.
At Report Stage in the Dáil an additional provision was introduced to section 20 which amends section 12 of the 1990 Act so that the statement "In examination (under the Companies (Amendment) Act, 1990)" will in future have to be included on documents issues by a company following the appointment of an examiner. It was considered that the pre-existing wording "under the protection of the court" could mislead some creditors.
Arising from the repeal of section 17 of the original Act the court will have the independent accountant's report when considering the initial petition. Section 21 is designed to set out how the court can deal with matters that come to its attention which would previously have been dealt with under section 17(d). Section 22 makes adjustments to section 18 of the Examinership Act consequential on the fact that the court will already have decided to appoint an examiner. It also adjusts the applicable timeframes and arrangements that obtain in relation to the provision of an examiner's report to parties concerned.
In various ways sections 23 and 24 deal with adjustments in relation to matters to be considered by, and the timing of meetings of, members and creditors to consider an examiner's proposals. It will no longer be necessary for a class of members to approve the examiner's proposals before they can be confirmed by the court. In circumstances where a company has had to have an examiner appointed the CLRG were of the view that what was an effective veto on an examiner's proposals by members of the company was no longer appropriate.
A further provision was added to section 24 in the Dáil which inserted a new subsection 4A into the original Examinership Act, 1990. This was done in order to ensure that a scheme of arrangement, put together by an examiner in a group situation cannot deplete the assets of one company in a group to the detriment of its creditors in order to benefit the members or creditors of another related company or the main company.
Section 25 will put in place more specific provisions as to the manner in which the examinership process handles the position of a guarantor for the debts of a company which goes into examinership. First, it provides that a guarantee can be enforced but retains the prohibition on this happening during the examinership process. Where a creditor proposes to enforce the guarantee, any rights to vote attaching to the creditor by virtue of the debt must be passed to the guarantor by the creditor. Where a guarantor makes a payment to the creditor, his or her right of recovery, under the examiner's scheme of arrangement, is also provided for in this section. Substantial amendments were made on Committee Stage in the Dáil as a number of potential difficulties were identified which could arise in the operation of the some of the original subsections in the published Bill. However, these amendments to section 25 (A) (1) (c) did not change the general approach to guarantees in the section.
Section 26 contains specific provisions in respect of leases. There was considerable debate on the provisions of this particular section, on both Committee and Report Stages in Dáil Éireann. This section specifically prohibits an examiner's compromise or scheme of arrangement from containing proposals which would result in a lessor being made to accept a reduction in the amount of rent or other payments due in respect of a lease of land or property after the scheme of arrangement is approved. Similar pro visions are made in respect of property other than land where the value of such property is substantial. Of course, like all other creditors, a lessor will invariably have to accept a write down in respect of amounts owing to him or her prior to the scheme of arrangement being proposed and agreed.
There is guidance contained in this section which can be used by the court in determining whether a lease will be considered to be substantial. This was amended on Report Stage in the Dáil so that the guidance given to the court will now refer only to the length of the unexpired term of a lease or hiring agreement. The court will, of course, also be able to take account of any other matters which it considers relevant in the particular circumstances of any case with which it is dealing. This section was also amended on Report Stage in the Dáil so that, where a lessor agrees, a scheme of arrangement can include provision for the lessor accepting a reduced rent, post-examinership.
That covers most of the provisions in this Part of the Bill. The remaining provisions in this Part to which I have not specifically referred, make modifications or adjustments which were recommended by the Company Law Review Group or were consequential on other amendments being made.
In relation to the removal of the statutory audit requirement for certain small private limited companies contained in Part III of this Bill, this proposal was first recommended by the Task Force on Small Business and endorsed by the Company Law Review Group. More recently, this proposal has been included in Partnership 2000. It is important to understand that this provision will only be available to certain private limited companies and certain partnerships. The partnerships in question were brought within the requirement to have their accounts drawn up and audited by the European Communities (Accounts) Regulations, 1993 (S.I. No. 396 of 1993), and are partnerships where all the members have effective limited liability.
To avail of the exemption from audit, the company will have to satisfy the specific requirements set out in section 32. I would like to make a few comments at this point. One is that the exemption will only be available to a company to which the Companies (Amendment) Act, 1986, applies. The particular relevance of this provision is that a number of companies, particularly guarantee companies, are outside the scope of the 1986 Act and such companies will not be able to avail of the exemption. Following from the Second Stage discussion in the Dáil, the turnover threshold at which companies can avail of this exemption was raised from £100,000 to £250,000. The number of companies which avail of this exemption will be closely monitored by both the Companies Registration Office and the Department of Enterprise, Trade and Employment. I would draw attention to the fact that the exemption will not be capable of being availed of by a company which does not keep its returns to the Companies Registration Office up to date.
Section 33 contains a mechanism that will enable members of the company to insist on having the accounts audited. It also sets out supplemental requirements in relation to information that must be contained in the balance sheet, which the directors will still be obligated to prepare – specifically it must contain an acknowledgment by the directors of their obligations under the Companies Acts 1963-9 to keep proper books of accounts and to prepare accounts which give a true and fair view. This is very important.
Section 34 contains provisions in relation to the manner in which the appointment of the auditor is terminated consequent on a decision of a company to avail of the exemption. In particular, certain information which the auditor has may have to be brought to the attention of the members of the company. Section 35 obliges the directors of a company to appoint an auditor where an exemption ceases to have effect. Section 38 contains the necessary provisions for the manner in which the exemption can be availed of by partnerships which, pursuant to the European Community (Accounts) Regulations, 1993, were brought within the requirement to prepare accounts and have them audited. Such partnerships, which I must say are not very common in this jurisdiction, are made up of partners, all of whom have effective limited liability.
Part IV is the miscellaneous part of this Bill and, as the name suggests, a range of proposals dealing with different areas are included here. It was extensively expanded during the passage of this Bill through the Dáil, as I will explain in a moment. Section 40 amends the Investment Limited Partnership Act, 1994, while section 41 extends the timeframe within which summary prosecutions under the Companies Acts may be brought. Sections 42 to 48 represent the company law part of the package of company law and taxation measures, approved by our Government earlier this year and designed to address problems arising from the abuse of Irish registered non-resident companies, or IRNRs as they are more commonly known.
An IRNR is a company which is incorporated in Ireland under Irish company law but is not resident here for tax purposes because the company is both controlled and managed from abroad. Therefore, the concept of residency in this context is in fact a taxation concept. In terms of what the IRNR problem involves, the central issue arising is that a structure which is used in a legitimate and fully transparent manner by many multinationals with operations here, is also used for undesirable activities worldwide, such as fraud, money laundering and other illegal activities. It is no exaggeration to say that the problems created by these IRNRs over recent years rank as one of the greatest threats to the reputation of Ireland as a jurisdiction that is well regulated.
While the number of IRNR companies which have been actually convicted of engaging in illegal activity abroad may not be that great, the fact that Irish registered companies were embroiled in controversies from locations as far apart as Russia to Mexico and Australia to Israel, as well as a number of instances within the European Union, meant that the problem was very serious and needed to be tackled head on. The IRNR taxation measures were introduced in the Finance Act this year by the Minister for Finance, Deputy McCreevy, and apply to new companies with effect from 11 February 1999 and existing companies from 1 October 1999. However, it is necessary to recognise that even with the changes which have been introduced in the Finance Act, the necessity to be able to effectively police and enforce the provisions had to be addressed also.
The basic change made in the Finance Act this year to address the IRNR problem is that subject to limited exceptions, every Irish registered company will now be tax resident in this State. However, based on past experience, making that change alone, unless it is capable of being and is actually rigorously enforced, is likely to prove to be ineffective. The main reason for this is that parties who use these companies are prepared to ignore their obligations under both tax law and company law and essentially put it up to the authorities to come after them. For instance, in 1995, in an article written in an international magazine, it was suggested to various parties that they could ignore requests for information from the Revenue Commissioners on the basis that the chances that they would be the ones pursued by Revenue would be rather remote. We cannot tolerate that. Accordingly, the provisions in sections 42 to 48, inclusive, cover a variety of aspects of the activities of companies, ranging from the imposition of requirements at the time of incorporation to the introduction of ongoing requirements. Thus, when in future people wish to incorporate a company, under section 42 they will have to show that it will conduct or undertake some activity in this State. This is designed to establish a real link between the incorporation of the company and the State.
Pursuant to section 43, for new companies, the subscribers will also have to ensure that the company has a person who is resident in this State as a director while, for existing companies, a transitional period of 12 months is being allowed before such a requirement becomes mandatory. Alternatively, it provides that a bond to the value of £20,000 has to be maintained by the company. The objective here is to ensure that the Revenue authorities and the Companies Registration Office have a definite person within this State whom they can go after where a company fails to comply with its obligations. In this regard, section 84 of this year's Finance Act introduced changes to the main Taxes Consolidation Act, 1997, so that the person who is a resident director of a company is a person who can be pursued to ensure that the company complies with its tax ation obligations. These obligations, in the first instance, would entail the registration of the company for taxation purposes or satisfying the Revenue authorities that it meets one of the exemption clauses in the relevant tax provision.
Section 44 contains supplemental provisions to section 43. It is designed to provide that where a company can show that it has a real and continuous link with one or more economic activities that are being carried on in this State, the company in question can be exempted from the obligations in section 43 to have a resident director, or indeed the alternative, to have a bond to the value of £20,000. It will be noted that the Revenue authorities will provide a statement to an applicant and, on submission of this to the Registrar of Companies, a certificate will be given by the registrar effectively exempting the company from the requirements to which I referred.
Provision is also made for the withdrawal of such a certificate where information of changed circumstances comes to the attention of the Revenue authorities. The section also contains a definition of what is meant by "residency" in the context of the new obligation being imposed in section 43 to have a director who is resident in the State. Following changes made in the other House, this definition is now equivalent to that in the taxation area.
Section 45 introduces a limitation on the number of companies of which a person can be a director or a shadow director to a maximum of 25. This is designed to tackle the problem created particularly in the context of IRNRs where multiple nominee directors appear to be the order of the day. The prospect of a person being a director of many hundreds of companies cannot but bring the company law regime into disrepute.
Senators will note that this section contains reasonable grounds for exemption in respect of what might be termed legitimate multi-directorships and, in the case of group situations, such multiple directorships will be counted as one. For example, where there is prior screening of directors, as happens in the case of companies which operate in the regulated sectors, the holding of such directorships can be exempted from the prohibition on holding more than 25 directorships. The section contains a mechanism whereby applications can be made in the first instance to the Registrar of Companies and subsequently, in certain instances, appeals can be made to the Minister. The manner in which directorships are held when the provision is commenced is also addressed.
Section 46 substitutes new provisions for section 12 of the Companies (Amendment) Act, 1982, in relation to the striking off of companies which, inter alia, fail to make annual returns. In recent years, the compliance rate by companies with an obligation to file their annual returns has been nothing short of abysmal with only 13% of companies meeting their obligations on time in 1997. We will not tolerate this any further. While many of these companies are undoubtedly IRNRs, it does not solely involve IRNRs. Under the replacement provisions, the Registrar of Companies will be entitled to move to have a company struck off where it is behind for one year or more in the making of annual returns. A number of refinements are being made to streamline the whole procedure, including, for example, the fact that the Circuit Courts will be able to handle applications for restorations and the courts will also be able to impose personal liability on directors for the debts of the company in appropriate cases.
The new provisions being substituted by section 46 also provide that where the Revenue authorities find that their approaches to a company to get the necessary information to enable them register the company for taxation purposes are ignored or not responded to, the authorities will be able to notify the Registrar of Companies to this effect. On receipt of such notification, the Registrar of Companies will be able to write to the company informing it that if it does not comply with its obligations to provide the necessary information to the Revenue Commissioners, he or she will move to strike off the company. Where people ignore their obligations to respond and supply information to the Revenue authorities, as happened in the past, the company may be struck off and dissolved. This is to ensure that where people are prepared to ignore their responsibilities, effective action can then be taken against them.
In section 51 of the Companies Act, 1990, a revised section 195 was inserted into the Companies Act, 1963. Subsection (8) of the new section 195 would have permitted a director who had resigned from a company to notify that fact to the Companies Registration Office. Up to then, the company was obliged to make the notification. The onus is now being placed on the director. While the obligation remained on the company, the facility was introduced to cater for situations where a company failed to make the notification and the former director would now, as it were, be able to correct the public record.
However, various difficulties were seen with this provision, most notably that it could result in notifications being made to the CRO and no director would then be on the public record in respect of a company. Section 47 provides for the deletion of the subsection (8) and the substitution of a different mechanism to facilitate directors who have resigned to make the notification to the CRO. These are set out in new subsections 11(A) and 11(B) contained in section 47.
Section 48 is tied in with the amendments being made to section 47 and will cater for the situation where the records in the CRO end up showing that there is no person recorded as being a director of a company. In such circumstances, the Registrar of Companies will be able to move to have this company struck off. I emphasise, however, that by virtue of the detailed procedures contained in the previous section, the company will have had fair warning that a process had commenced that could result in the records in the CRO not showing any director being appointed in the company in question.
The purpose of the proposed amendment to section 311 of the 1963 Act in section 49 of this Bill is to provide a similar facility to make former directors personally liable, as contained in section 46, in the case of the strike off of a defunct company where the officers continued to operate as if the company had not been dissolved.
Section 50 provides for technical adjustments to take account of the amendments being made to section 12 of the Companies (Amendment) Act, 1982, in the amendments to section 46 of the Bill which, as I outlined, make provision for the striking off of companies for failure to file annual returns or to submit the necessary information to the Revenue Commissioners. Section 51 is also of a technical nature and reflects the changes made to section 311 of the 1963 Act to which I referred.
Under section 368 of the Companies Act, 1963, provision is made for the manner in which matters are to be done to or by the Registrar of Companies or, in his absence, to or by such person as a Minister may from time to time authorise. Up to recently, the assistant Secretary General in the Department of Enterprise, Trade and Employment was the Registrar of Companies. However, the office of registrar has been assigned to the principal officer in the Companies Registration Office. Some doubts have been raised in respect of actions that were done by the assistant registrars over the years in terms of whether in discharging their functions, for instance in signing certificates of incorporation or dealing with the registration of mortgages and charges, they were acting properly in the absence of the registrar. Section 52 addresses these issues.
Section 53 amends section 21 of the Companies Act, 1990, which provides for the publication or disclosure of information obtained under sections 19 or 20 of that Act. This arises under section 19 as a result of the Minister directly requesting or authorising an officer to obtain information from a company as a preliminary step to determine if any irregular activity may have been carried on in the company or under section 20 as a result of entry and search on foot of a warrant issued by a District Court judge. The sections contain specific details regarding the matters that may be examined and the procedures to be followed.
When section 53 was first introduced on Committee Stage in the other House, which was dealt with by the Select Committee on Enterprise and Small Business, the focus of the amendment was to extend the list of competent authorities defined in subsection (3) to which disclosure may be made, pursuant to subsection (1). However, arising from the debate on Committee Stage and the subsequent debate in the Dáil on 29 and 30 September last in relation to a motion on the Ansbacher investigation, section 21 was re-examined in detail and, arising from that investigation, I brought forward a comprehensive amendment to section 21 of the Companies Act, 1990, on Report Stage in the Dáil. This forms part of the Bill passed by the Dáil.
The primary purpose of that amendment is to identify specifically not only the parties to which information may be disclosed, but also to more clearly identify the reason for which the disclosure may take place to such parties. Section 53 now contains amendments not only to section 21(3) but also to subsection (1) of that section. The parties to whom information may now be given and the purposes for which it may be given are explicitly set out in the revised section 21(1). As I mentioned earlier, these represent important changes to the investigative provisions contained in Part II of the Companies Act, 1990.
Section 54 amends Part XIII of the Companies Act, 1990, which makes specific provision for investment companies. On the basis that such companies will be authorised and supervised by the Central Bank, certain basic provisions of company law are disapplied. The changes proposed in section 54 are, in large measure, in response to requests for further disapplications from the funds industry representing companies located in the International Financial Services Centre, the IFSC. The proposed changes have the support of the Central Bank.
International financial services have been a jewel in the crown of Ireland's economy over the past decade. The IFSC, which was set up in 1987, has been the driving force behind the development of the sector. It is largely responsible for the worldwide reputation Ireland now enjoys as a centre of excellence in the provision of financial services. The centre has provided a hub around which a world class support network has grown, encompassing software development, telecommunications, shared services centres and legal and accountancy skills. It has also served as a focus to attract the best and brightest of Ireland's young talent into the industry. We are very proud of everybody involved with the IFSC.
Earlier this year, the Government adopted a strategy to use the success of the IFSC as a springboard for the further development and expansion of international financial services in Ireland. The strategy, which was published in May last, seeks to maximise the level and quality of employment in the industry and to enhance links with related sectors. It sets out the opportunities and challenges which industry will face in the coming years and mandates Government Departments and agencies to provide the necessary support to meet these challenges. The strategy is a result of intensive consultation between the different sectors in industry and the relevant Government Departments and agencies.
The company law changes proposed in section 54 are in part fulfilment of one of the priority actions identified in the strategy document and will help towards ensuring that the funds industry in the IFSC remains competitive with its counterparts elsewhere in Europe. In so far as possible the proposals in company law to tackle the IRNR problem are designed not to have an unduly adverse impact on entrepreneurs who wish to use the company structure to progress their desired projects. Of necessity, some of the changes may result in a somewhat slower incorporation process, but it is not considered that they will add to any significant extent to the cost of incorporation. It is the Government's intention to ensure that the provisions are monitored and that their impact will be kept under close review, so that any unintended difficulties which arise for business can be addressed at the earliest opportunity.
That is a summary of the Companies (Amendment) (No. 2) Bill, 1999. I thank the Seanad for its co-operation in arranging this debate on the Bill. I look forward to hearing the contributions of all Senators. I commend the Bill to the House.