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Business Regulation

Dáil Éireann Debate, Wednesday - 25 May 2011

Wednesday, 25 May 2011

Questions (86, 87)

Robert Dowds

Question:

107 Deputy Robert Dowds asked the Minister for Enterprise, Trade and Innovation his views on the alleged practice of car insurance companies giving glass replacement contracts to a small number of companies; if such an arrangement is regarded as a cartel; and if he will make a statement on the matter. [12857/11]

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Written answers

I understand the arrangement referred to by the Deputy is one whereby insurance companies actively recommend certain approved repairers to their policyholders with the approved repairers selected on the basis that they meet various qualitative standards and, in return, are guaranteed a minimum flow of work. Service Level Agreements are generally entered into by the insurance company and the approved repairer. Policyholders, however, are free to select a repairer of their choice.

The Competition Authority, which is the independent statutory body responsible for enforcing competition law in the State, has previously advised my Department that such arrangements do not appear to breach competition law but, in fact, appear to result in a more cost effective service being provided to the general public.

More recently, the Authority has conducted market enquiries with insurance companies on the matter and it appears to remain the policy of insurance companies to allow policyholders to choose a repairer other than the approved repairer.

It is, of course, open to any aggrieved party alleging anti-competitive practices, including abuse of a dominant position, to take a private action under Section 14 of the Competition Act 2002.

Frank Feighan

Question:

108 Deputy Frank Feighan asked the Minister for Enterprise, Trade and Innovation in view of the high costs of accountant and auditors fees for small companies with a yearly turnover of under €10,000, his plans to exempt same from audited accounts. [13043/11]

View answer

The exemption from the requirement for certain private limited companies to have accounts audited was first introduced in the Companies (Amendment) (No. 2) Act 1999, based on meeting specific criteria and companies falling within the scope of the Companies (Amendment) Act 1986. The Companies (Auditing and Accounting) Act 2003 and the Investment Funds, Companies Miscellaneous Provisions Act 2006 made amendments to the thresholds applying to the exemption from audit requirement. Companies who meet the relevant criteria are currently exempt from having their accounts audited where all of the following thresholds apply: turnover not exceeding €7.3m.; balance sheet total not exceeding €3.65m.; and average number of employees in the year not exceeding 50.

Companies organised as non-profit organisations, such as charities, residential management companies, sports clubs, trade associations and community or special interest groups are generally incorporated as companies limited by guarantee.

In 2009, the Company Law Review Group (CLRG) considered the case for extending the audit exemption to companies limited by guarantee. As outlined in its 2009 Annual Report, the Group recommended that: (i) Subject to consultation with the Minister for Community, Rural and Gaeltacht Affairs and the Charities Regulator, the audit exemption regime contained in Part III of the 1999 (No. 2) Act should be extended to such class or classes of companies limited by guarantee which are charitable organisations (within the meaning of the Charities Act 2009) so as to bring them into alignment with charitable organisations that are not companies, provided that 10% of the members with voting rights should be able to require an audit; and (ii) the audit exemption regime be extended to all companies limited by guarantee which are not charitable organisations, subject to a veto right, (i.e. that any one member who has the right to vote at general meetings of the company may veto the proposal to avail of the exemption), and further subject to the requirement that audit exemption in respect of the following year shall be an item on the agenda of the annual general meeting.

The recommendations of the CLRG in this matter will be considered in the context of the Companies Consolidation and Reform Bill, which is currently being drafted by the Office of the Parliamentary Council.

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