Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I apologise to the House. I am not reading quickly enough.

Part 18 makes provision for companies limited by guarantee, not having a share capital. Such companies are known as CLGs. The law in Volume 1 applies to CLGs as it does to the new model private company limited by shares, subject to the exceptions set out its table of disapplications and adaptations made in this Part. Since guarantee companies do not have a share capital, members of such companies do not have a distinct economic interest in their capital. It is for this reason that CLGs are a popular type of company for charities, sports and social clubs and management companies. A CLG may be exempt from the requirement to use such a suffix to its name, for example, if it has a charitable object.

In a guarantee company, the members' liability is limited to such amount as they undertake in the constitution of the company to contribute to assets of the CLG in the event of its winding-up. The audit exemption is now being extended to guarantee companies under the Bill if a company fulfils the criteria for a small company. It is expected that this will benefit many guarantee companies that are charities or sports clubs, etc. Any one member of the company is entitled to object to the exemption and thus force a company to carry out an audit.

Part 19 makes provision for unlimited companies. This Part is structured in such a way that it covers both private unlimited companies and public unlimited companies. In this regard, three different types of unlimited companies are being catered for - the private unlimited company with a share capital, ULC, the public unlimited company with a share capital, PUC, and the public unlimited company that has no share capital, PULC. All three types of unlimited company already exist.

The law in volume 1 applies to unlimited companies as it does to the "new LTD company", subject to the exceptions set out in the table of disapplications and any other adaptations made in this Part. All types of unlimited company will be permitted to have just one member but will be required to have at least two directors.

Part 20 makes provision for re-registration of companies. A company will generally be permitted to re-register as another type of company, subject to complying with the requirements applicable to the latter company type. Re-registration will involve the passing of a special resolution and the delivery of certain documents including a compliance statement to the CRO. Additional requirements may apply, depending on the type of company, following re-registration.

Part 21 makes provision for the registration and disclosure requirements of external companies, also referred to as foreign companies or overseas companies, which have been formed and registered outside the State but which have a connection with Ireland. The company law review group has proposed that the law in relation to external companies be modified from the current position which provides for both the concept of "place of business" and the concept of "branch", to a position where the new law would provide only for the "branch" concept. By not retaining the concept of "place of business", it is hoped to remove the uncertainty of the current law whereby it can be unclear whether a particular company is a branch or a place of business. The consequence of this will be that external companies can elect to register as a branch and will thus be required to file accounts.

Part 22 deals with unregistered companies and joint stock companies and the application of the Bill to companies formed or registered under previous Acts. It also provides a mechanism for an unregistered company to register as a PLC. The most important unregistered company in Ireland is the Governor and Company of the Bank of Ireland.

Part 23 contains the provisions relating to prospectus law, market abuse law, and transparency law. In particular, provisions are set out regarding the consequences of a breach of a measure forming a part of any of these, and requiring a company with traded securities to prepare a corporate governance statement. For the sake of clarity, these provisions are housed in a stand-alone Part rather than in Part 17 of the Bill on PLCs, as originally envisaged in the general scheme.

Part 24 of the Bill makes provision for the establishment of companies as investment companies, currently provided for under the 1990 Act. In order to be permitted to operate, these companies must be authorised by the Central Bank. Such companies are a key constituent of the set of legal structures under which the international collective investment funds industry operates in Ireland. An investment company is a type of PLC.

Part 25 of the Bill contains miscellaneous provisions that do not naturally fit in any preceding Parts of the Bill, such as foreign insolvency proceedings, the prohibition on partnerships with more than 20 members and certain public auditor requirements.

In conclusion, I am delighted with the significant benefits which the Bill will bring to all companies, big and small, across the country. It will make it easier to run a business as a company. An entrepreneur will be able to start a company with a single director. Time will not need to be spent on convening and holding a formal AGM. There will be no need for ordinary businesses to be tied up with objects clauses and articles of association, although the Bill will retain these concepts for those companies that need them.

This Bill will enhance Ireland's competitive position as a place in which to start or to grow a business. Indeed, it will feed directly into the Government's aim to make Ireland the best small country in the world in which to do business. I look forward to working with Deputies on progressing this Bill to enactment. I believe it will bring significant benefits to companies and to business life in Ireland.

I wish to thank all those who have worked on the drafting of this Bill. The House has only seen the tip of the iceberg of work which has been done. I commend the Bill to the House.

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