Tony McLoughlin (Sligo-North Leitrim, Fine Gael) | Oireachtas source

I welcome the opportunity to speak on the Companies Bill 2012 and will mention a number of elements of it which are important and relevant to the modern running of a company. For the first time in Irish company law, the most common company type in Ireland - the private company limited by shares - will be placed at the centre of the legislation. Since 1963, there have been 16 relevant Acts on company law. These need to be consolidated, and this is achieved in this Bill. The Bill is designed to make it easier to operate a company in Ireland and it is set out in 25 Parts to ease accessibility to the law for each company type. The Bill contains 1,429 sections and 17 Schedules and it will provide significant benefits to companies by reducing red tape and making company law easier to understand. All of us who have worked in or worked for companies long to see a reduction in red tape and this Bill will realise this ambition.

As some speakers have said, many companies are struggling currently. I have been approached by many companies in my constituency of Sligo-North Leitrim and have met many directors and workforces. These people have told me there are major difficulties, one of which is access to broadband, as mentioned by some of my colleagues. There are many black spots in the constituency I represent and that needs to be reviewed.

This Bill will provide significant benefits to companies of all types and it is part of the Government's drive to make Ireland the best small country in the world in which to do business. I will point out some of the measures which will ease the burden and cost of regulation. Companies will be able to operate with one director and will not have to hold a physical annual general meeting. There will be a reduced burden of paperwork and there will no longer be a need for articles of association. For the first time companies will be able to engage in mergers and an audit extension can be extended to dormant companies.

It is clear to many of us that the small and medium-sized enterprise sector is suffering more than any other area from the current credit drought in the banking sector. We have spoken about the banks and their behaviour towards small companies over the past number of years. Unfortunately, banks are not behaving in the way they should, although they are being requested to do so. We see the controversies in the banking sector, and some people doing well out of it while some SMEs are struggling to survive.

Commercial rates are another cost. There will have to be a review of commercial rates, which should be based on profits. Many companies are closing due to commercial rates and the penalties involved. It is important that we review commercial rates because they are one of the main worries for companies currently. We also talk about VAT and compliance with health, fire and employment regulations, which make it difficult for company managers to achieve a profit.

There are numerous regulations which reduce the time managers have to run their businesses. The Minister is to be commended on his initiative to tackle company law and to reduce the burden on company owners and managers by reducing red tape and regulations. It is estimated that 13,000 companies are established every year and they will see savings of more than €6 million, mostly in professional fees. Legal fees and transaction costs for businesses can be expected to fall under the new system, as the streamlined registration system should make it faster and easier for companies and their professional advisers to register charges. It is widely expected that the risks of lending to Irish companies will be greatly reduced, which will, in turn, marginally affect the cost of credit for businesses in the economy.

For the first time, private companies will be able to engage in mergers and divisions, whereas under the old law there was no facility for Irish private companies to merge. This will strengthen existing companies, which may see opportunities to join and combine resources, staff and expertise for their future advancement. Many sole traders asked their spouses or partners to join them as directors even though they may have had no interest in the business. The proposal to allow one director is sensible and practical and I commend the Minister on this change.

Many companies - for example, small management companies and community-based companies - end up causing citizens much unnecessary hassle and extra cost, but this Bill will benefit these people who require a company to administer their affairs but who do not want the hassle of undue regulation and red tape. Many Deputies work with community organisations which must form companies to release funding and they despair of all the paperwork, such as articles of association and various audits. This Bill will benefit many of these community groups. Some residents in housing estates also form their own companies to look after their estates. There will be benefits for them also.

There has been a terrific reaction to this Bill across many sectors. One company involved in company trading and advice said on its website that it is delighted with any legislation which makes it easier to do business in Ireland and abroad. I am delighted to support this Bill and commend the Minister on his work.

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