Áine Collins (Cork North West, Fine Gael) | Oireachtas source

I welcome the opportunity to debate ways of helping viable small business to survive through difficult times. This means helping all small businesses. If businesses can enter examinership too easily and without proper supervision and fair procedures being applied, their creditors may end up suffering. These creditors, for the large part, could also be small businesses and end up being forced to close. The current examinership process has been used effectively by some larger firms to deal effectively with issues such as upward only rent reviews. Viable businesses have been kept in operation and protected jobs; therefore, the examinership process can work well. However, the process of going through the High Court is far too expensive for small companies or sole traders. We, therefore, need to find a solution to provide a similar process but one in which smaller companies could avoid the costs associated with going to the High Court. In trying to achieve this, it is equally important to protect the rights and welfare of creditors. The balance has to be right and, as the Minister mentioned, there are constitutional issues to be taken into account.

We have to find a solution. Deputy Stephen Donnelly is right that we need to develop an examinership process that is workable for viable small businesses and protect associated jobs. The Minster agrees with the general principles of the Bill and has taken and will continue to take steps to achieve the same results in a more balanced way. The programme for Government has proposed introducing new, legally binding voluntary administration procedures. However, in reporting to the Minister, the CLRG advised that it would not be viable to introduce a fully non-judicial debt settlement scheme, as proposed in the Bill, as such a scheme would require the consent of all creditors. From past experience of trying to do this before a company entered liquidation, it is very difficult and highly unlikely. Nobody wins when a company ends up in liquidation. The Minister sees merit in the proposal, but, in the light of the advice received, has decided that further work needs to be done. He proposes to set up a working group to examine the feasibility of allowing small private companies to be placed in examinership with the minimum of court oversight. This debate and discussion should help to guide the working group to arrive at an appropriate recommendation that would have the correct balance between the rights of the person seeking examinership and those of the creditors. In this context, it is important to note that the Minister has been progressing a commitment whereby small businesses can apply for examinership to the Circuit Court, which we all agree would be a far less expensive option. Enabling legislation has already been passed - the Companies (Miscellaneous Provisions) Bill - which will come into force once a commencement order is issued. I look forward to seeing a strong working group being established and hope a much less costly and burdensome examinership process can be found for small businesses.

Much work has been done on the Bill by Deputy Stephen Donnelly and also in the subsequent analysis of it by the Company Law Review Group and the Department.

Therefore I hope the next steps to find a solution will be taken as quickly as possible, as time is of the essence for many viable companies all over the country. We must also set this in place if we are to develop entrepreneurship and encourage people to set up businesses, as if things do not work out, there must be a process in place which is not hugely burdensome.

See this speech in context