Skip to main content
Normal View

Small and Medium Enterprises

Dáil Éireann Debate, Thursday - 7 April 2022

Thursday, 7 April 2022

Questions (15)

James Lawless

Question:

15. Deputy James Lawless asked the Tánaiste and Minister for Enterprise, Trade and Employment if he will be updating company law to reduce the regulatory burden on the SME sector; and if he will make a statement on the matter. [18789/22]

View answer

Written answers

Ireland is well regarded in terms of having a proportionate regulatory burden for businesses. In the Global Business Complexity Index 2021 Ireland scored extremely well and was deemed to be the 4th least complex country in which to do business. This index examines the rules and requirements in 77 jurisdictions throughout the world. The National Competitiveness and Productivity Council (NCPC) 2020 scorecard assessed Ireland’s performance as being within the top 20% of countries in major international competitiveness rankings. Two of the key international indicators for the NCPC when assessing Ireland’s performance are the World Economic Forum Global Competitiveness Report and the IMD Competitiveness Yearbook, which consider a variety of factors including ease of establishment and doing business.

With regard to company law specifically, the Companies Act 2014 is a landmark legislative project which was the result of many years of detailed and comprehensive work. It consolidated, simplified and reformed company law to provide a modern framework for all companies. The Act strikes a balance between simplifying the day to day running of a business, maintaining the necessary protections for those dealing with companies, and putting in place an effective corporate governance regime.

The Act has reduced reporting requirements for micro and small companies. Such companies can for example avail of an exemption from disclosing full financial statements at the CRO. They can also avail of an audit exemption. I am aware that regulation may have a disproportionate effect in terms of compliance cost and administrative burden on SMEs and my Department is leading on the implementation of the SME test across Government.

Covid-19 has added to that burden and this Government’s response to the needs of SMEs has been evident from the onset of the pandemic. In respect of the Companies Act, I have amended it twice and led on two measures to protect viable businesses and preserve employment. The Companies (Rescue Process for Small and Micro Companies) Act 2021 provided for SCARP - the Small Company Administrative Rescue Process. This is a new cost efficient and speedy corporate rescue framework for small and micro companies. The other is the Companies (Miscellaneous Provisions) (Covid 19) Act 2020 which addresses temporary operational issues and alleviates pressure on company liquidity.

Company law is dynamic and having established a world-class company law code in the Companies Act we keep it under regular review. In this regard the Company Law Review Group (CLRG) plays a central role in advising me on the Act. The CLRG is a statutory advisory body with membership made up of a wide range of stakeholders including ISME and SFA. In the CLRG my Department has access to a deep reservoir of knowledge and on the ground experience.

Future legislative proposals to be developed will be mindful of any potential impact on SMEs. Preparations are being made for a third updating of the Act through a Companies (Miscellaneous Provisions) Bill. My officials are considering provisions in the areas of corporate supervision and enforcement; the recent CLRG report concerning the consequences of certain corporate liquidations and restructuring practices; and other matters including rebalancing the provisions regarding audit exemptions for small companies.

Top
Share