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SMEs to benefit from landmark bill – Minister

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200,000 SMEs and 12,000 start-ups every year will be able to substantially reduce the costs and time associated with establishing and running a company, as a result of a range of reforms to be introduced as part of the landmark Companies Bill, Minister for Jobs, Enterprise and Innovation, Richard Bruton TD has claimed.

The Bill has passed all stages in the Houses of the Oireachtas and has been sent to the President. 

Once commenced, the Act will provide significant benefits to companies by reducing red tape and making company law obligations easier to understand. This landmark legislative project, which is the largest substantive Bill in the history of the State, will bring significant benefits to companies of all types throughout the country, and is part of the Government’s drive to make Ireland the best small country in the world in which to do business.

The Bill consolidates the existing 17 Companies Acts, which date from 1963 to 2013, into one Act and it also introduces a number of reforms, which are designed to make it easier to operate a company in Ireland. Set out across 25 Parts, to ease the accessibility of the law for each different company type, the Bill contains 1,448 sections, and 17 Schedules. 

For the private company limited by shares, the Bill contains a number of significant reforms:

  • It will now be possible for such a company to have only one director – there will no longer be a requirement to have a second director
  • The company will not be required to hold a “physical” AGM 
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  • The company will be permitted to have a one-document constitution.
  • The company will no longer be required to have an objects clause, setting out what the company does and does not have capacity to do – the company will now have the same legal capacity as a natural person.
  • The new “summary approval procedure” will allow companies to carry out certain activities by means of a directors’ declaration and a shareholders’ resolution, for activities which under the current law would require High Court approval (for example, certain transactions with directors, capital reductions, and solvent windings-up)
  • Private companies will be able, for the first time, to engage in mergers and divisions (under the current law, there is no facility for two Irish private companies to merge).
  • Directors’ duties have been codified in the Bill, thereby making the law in this area more transparent and accessible. Currently many of the legal and equitable duties of directors are set out over more than 150 years of case-law.

Companies can now file their annual returns online (in full) and this will create efficiencies and reduce costs for all businesses 

Minister Bruton said: 

“This Government is determined to make Ireland the best small country in the world in which to do business, so that more businesses can start-up, grow and create the jobs we need. A key part of our Action Plan for Jobs is implementing a series of changes to reduce the administrative burdens imposed by Government on business.

“The Companies Bill is a groundbreaking piece of legislation. It consolidates the 17 Companies Acts as well as the many statutory instruments and court judgements so as to make it easier for companies to know and understand their legal obligations. It also implements a series of major reforms to allow for more electronic transactions, to reduce red tape and to make it easier and cheaper to run a company in Ireland. It will make a real difference to our international competitiveness. It will save businesses in terms of compliance costs and will ultimately make it easier to create jobs.”

“I would like to acknowledge the valuable contribution made by the members of the Houses of the Oireachtas and thank them for their collegial approach in progressing this large and technical Bill in such an efficient and supportive manner. I would also like to pay tribute in particular to officials of my Department who worked incredibly hard on this project, and to the CLRG and all the others who contributed to this massive and hugely important project.”