Minister for Jobs, Enterprise and Innovation
Richard Bruton today published on his Department’s website “Pillar A” of
Companies Bill, which he says will make it cheaper and easier to start and
run a business. The 'massive overhaul' of Irish company law follows a
Company Law Review Group report.
The legislation, which comprises 952 sections and six schedules on over 1,300
pages of text, is expected to represent the largest piece of legislation in the
history of the State when complete.
It is claimed to be the most significant
reform in Irish company law since 1963, and consolidates the 15 existing Company
Acts as well as a significant number of statutory instruments and judgments.
The Companies Act 1963 was almost a direct
copy/cog of the UK Companies Act 1948 apart from about two sections.
Announcing the publication, Minister Bruton stated: “I have consistently said
that if we are going to get the economy growing and if we are going to create
and protect jobs, we must focus on three things:
- reducing costs to businesses:
- improving access to finance and
- encouraging R&D and innovation.
“This reform, like many others announced
recently by my Department, will have a significant impact on reducing business
costs. After these reforms are enacted, for example, it will now be possible for
a person to start a business without needing to find a second director. Small
businesses will no longer have to go to the expense of holding a physical AGM
every year. The burden of company legal documentation will be greatly reduced.
And crucially, it will be easier for business-owners to find out the nature of
their legal rights and duties and will reduce the need consult with lawyers.
“I commend all those involved for their work in the area, and I am determined to
press ahead to complete these reforms so that Irish businesses can benefit from
them as soon as possible.”
Bruton said he decided to publish Pillar A of the
Bill in advance of the completion of drafting of the entire Bill in order to
allow people and businesses who will be affected to prepare for the changes made
by the legislation. It is expected that the remainder of the Bill will be
published in 2012, with speedy enactment thereafter.
As well as consolidating existing law in the area, Pillar A of the Bill will
make important changes which will make it easier and cheaper to start and run a
company. The legislation published today contains all provisions relevant to the
private company limited by shares, which under the Bill will be known as
“cls” instead of “ltd”, and which accounts for over 90% of companies
in Ireland. This company type will now be put at the centre of Irish company
law, and important reforms will be made to the way this company type operates:
- A cls will be allowed to have only one
- A cls will only be required to have one
document in its company constitution, and the Act provides for a default
document to apply in all cases except where the company changes this;
- A cls will have the same legal capacity as a
natural person, reducing the necessity to prepare long company
constitutions, and reducing legal disputes caused by the ultra vires
- A cls will no longer be required to have a
“physical” AGM every year – it will be possible to do this by
- Other changes include an exhaustive listing
of the duties of directors (previously contained in caselaw) and of all
criminal offences under company law.
Dr Tom Courtney, chairman of the Company Law
Review Group, said: “The publication of
the provisions of Pillar A of the Companies Bill represents a landmark moment in
the development of Irish company law. The document which is published today is
the product of years of very careful and painstaking work in remodelling Irish
company legislation around the entity which uses it most - - the private company
limited by shares - - and in making that legislation more accessible to those who
need to be familiar with its provisions, whether in the business community or
The publication of “Pillar A” will allow all of these
stakeholders the opportunity to become familiar with the provisions of the
proposed new law, and to interrogate these provisions from a technical
perspective in advance of the Bill being enacted”.