Company Law Update
A draft of the Company Law Consolidation and Reform Bill was published last week and is expected to be introduced to the Dail in Autumn this year.
The Bill is designed to simplify procedures for private companies which comprise of over 90% of the companies operating in ireland and specifically:
- Consolidate all legislation since the 1963 Companies Act into one document.
- Introduce reforms that will preserve strong compliance and enforcement.
The Bill will have two divisions:
- “Pillar A” which relates to private companies limited by shares.
- “Pillar B” which will relates to all other types such as PLC, unlimited, unregistered and guarantee companies.
Some proposed changes for private companies are:
1. A single document constitution with no objects which does away with the ultra vires concept.
2. Company will only require one director and a company secretary (who cannot be the same person).
3. Present requirements in relation to AGM, Special Resolutions etc. to be disposed of and procedures simplified.
4. Procedures in relation to share transactions such as purchase of own shares, reorganisation of shares and share reductions will be simplified and in particular court approval will not be necessary.
5. Simplified procedures to be introduced in relation to registering judgments and charges and applications for schemes of arrangement.
6. A clear list of directors duties in their role as officers of a company.
7. Directors will certify that Auditors were made aware of all relevant information.
The effect of these changes will ease the regulatory burden to setting up and operating private companies and associated costs.
The early publication of the draft bill will help interested parties to understand its benefits in advance of it becoming law.
For further information please contact Jimmy Dolan Partner OSK.
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