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

I will start with Deputy Tom Fleming's contribution. I recognise the point he made about recognition of the term "accountant". This will have to be given some thought. The UK does not recognise it either. It was considered previously but some concerns were raised by the Competition Authority and the Office of the Director of Corporate Enforcement as to whether it might be unnecessary regulation and interfering with free competition. There are two sides to this argument and perhaps we could weigh up those arguments and consider the issue in further detail on Committee Stage.

I agree wholeheartedly with Deputy Fleming that we need to celebrate entrepreneurship. The idea of this Bill is not only to celebrate it but to give more businesses the protection of company law. Limited liability is a protection being endowed by the State on small businesses in recognition of the courage and ingenuity of what they are trying to do to create jobs and opportunities. We are trying to make it simpler for such people to set up a company which gives them protection.

I would not care to comment on the issues around Leader programmes as I am not knowledgeable enough about their work, although I know they do very good work. My Department is seeking to move from the 35 independent county enterprise boards to a new structure with a national centre of excellence in Enterprise Ireland and locating them in the local authority. The reason we are doing that is that we believe it will be a win-win situation. We will get a high quality national driver of quality, training and best practice but by bringing them to the local authority where they can draw in the local authority and its powerful influence across the community to create a better business environment. That is the thinking behind what we are doing. Perhaps this issue needs to be debated. It is not about killing community support for enterprise, variety or the very different ways communities approach their challenges. It is about getting profession practice into the way we support those who start up.

Deputy Shane Ross, while very generous in welcoming the Bill, questioned whether it was a landmark. I suppose that is a matter for debate. In defence of describing it a landmark, I would say there are well over 200,000 small businesses in the country and 16,000 incorporate every year. Some 24,000 people start up new businesses every year. Many people's lives will be affected by this and if we can make it a more streamlined process and much easier for them to understand, to get protection for their businesses and to raise loans, it is not unfair to call it landmark. Obviously, we will have to prove it is landmark in its operation but my officials and the company law review group have put in a huge amount of work into it, which they have not done lightly. They have done so because they believe this can make a difference.

Some described Ireland's ambition to be the Delaware of Europe. Delaware is a state which is recognised as being really good for companies which want to form and to have a good compliant approach and an easy and flexible way to do business. That is the ambition behind this.

Many Deputies raised concerns that with the changes, we need to invest in making people aware of the new regime. We are definitely alert to that. The Companies Registration Office will work on that, as will others. There is already active engagement through conferences and legal groups to ensure word gets out.

Some Deputies gave out about the length and complexity of the Bill. When I came into this House, a Deputy said that if one could not say what one had to say in five minutes, one should not be in this House but the same Deputy spoke for an hour. Sometimes things cannot be said in a short letter. Some 1,429 sections may seem like a lot but we believe getting it right, codifying it correctly, making it accessible to people and not having to jig around with 16 pieces of legislation to find out one's obligations is worth the effort. Notwithstanding Deputy Mattie McGrath's comments, we will push on and prove to him that this will be good.

Deputy Tóibín raised the issue of the designated activity companies. This provision allows existing companies, with their objects clause, to continue. Perhaps we can debate this on Committee Stage but there are some which will want to retain their existing status and this is to facilitate them. There are cases where that will be useful but we will debate it on Committee Stage so the Deputy can be assured of the robustness of what we are doing.

Deputy Tóibín also raised the issue of directors' obligations. As we move to one director, he does not want it to mean a diminution in the obligations of directors. That is certainly not the intention. We would argue that a director whose core business is running the business is better in that there is a clear line of responsibility and he or she is not forced to have directors who are purely passengers. We also sought to codify the duties more and make them easier to understand. They are built around eight fiduciary duties, including disclosure of conflicts of interest, the relationship with auditors and the director's compliance statement.

In each case, we sought to have a provision that is robust but easy to understand and comply with. The easier it is to understand, the more natural it is to become compliant. It is not a question of trying to find non-compliance but of making compliance easier.

Deputy Calleary asked what savings will accrue from the Bill and whether technology can be used more effectively. The Credit Review Office is trying to facilitate increased use of technology, including the use of e-forms and e-filing. It has done so by reducing fees on such filing. There is now a considerable compliance rate and a reduction in cost as a consequence of e-filing. We are dispensing with the need to have formal AGMs, for example, and this will result in savings.

Deputies Halligan, Tóibín and others raised the issue of employees who are caught in circumstances of liquidation. The law accords the rank of "preferential creditor" to workers. Workers have the same status as the Revenue Commissioners. The Revenue Commissioners must fund all public services and should, therefore, have priority with regard to bills, but workers have a similar status. Deputy Halligan asked whether workers can get more than the wages they are due and the statutory redundancy payment when a company is wound up. The protection is in respect of statutory redundancy but wages, salaries, sick leave payments, etc., are all protected and given priority.

A number of Deputies raised the issue of late payments, which are obviously a burden on companies. In March of this year, we transposed a directive from the European Union in this area. We are trying to have a voluntary code of conduct. One person's late payment is another person's credit, and many of the arrangements are business-to-business arrangements. We need to get businesses to agree to adopt a proper code. There has been progress on such voluntary codes in other jurisdictions. We need to push on and determine whether we can have an approach of that nature.

Deputy McGrath raised the issue of company directors not being able to represent themselves in court. That is the position at present but the Company Law Review Group is to examine the matter as part of its programme of work this year. Perhaps later in the year we will be able to report on that.

Many Members welcomed the proposal to make it easy to access examinership by allowing cases in the Circuit Court rather than the High Court. We are pushing ahead with this in the Bill. The Company Law Review Group's report will look beyond that to determine whether there is scope for reducing the role of the courts in examinership further, for example by having an examiner appointed by administrative decision rather than by judicial decision. There could be developments in this regard if it stands up to scrutiny on examination. I believe it would be welcomed by many people.

A number of other issues were raised. I hope we will be able to deal with them on Committee Stage. The question of resources for the ODCE was raised. Deputy Paschal Donohoe stressed the importance of having high-quality people in a position to carry out enforcement. All regulatory authorities are affected by the employment control framework and the reduction in size of the public service. There is pressure in all areas. In the case of the investigations into banking, additional resources had to be drafted in to ensure the relevant cases could be examined exhaustively. We are always conscious that enforcement is important and have recently increased the strength of the Competition Authority despite the pressure on resources because, like the troika, we believe there should be an effective enforcement policy.

Deputy Shane Ross raised doubts about there being no reference to AGMs. The assurance in the Bill is that what was described could only happen if all the members agreed in writing. Therefore, it is not something that can be done idly or lightly. It applies only to the new-model private company limited by shares. It does not apply in every company. Perhaps on Committee Stage we can tease out those concerns.

A number of Deputies, including Deputy Healy-Rae, raised the issue of the audit exemption. According to the Bill, the conditions a small company must meet are such that the balance sheet must not exceed €4.4 million, the turnover must not exceed €8.8 million, and the average number of employees must not exceed 50.

Deputy Kieran O'Donnell raised the issue of viable SMEs that are being damaged by having made bad property plays. This is a valid concern and has been highlighted on a number of occasions in the reports of Mr. John Trethowan of the Credit Review Office. The Central Bank intends to develop targets for companies in difficulty just as it has done for mortgage holders in difficulty. This has been flagged as a direction in which we are moving. In the longer term, banks must face up to the bad decisions. We cannot have zombie banks, as they used to be called, or circumstances in which a failure to confront losses results in banks' being unable to do the job of a bank - that is, lending to those who need money to create opportunities. Deputy Kieran O'Donnell raised an important issue and it is obviously on the agenda of the Government. As with the mortgage issue, it is not easy or straightforward to resolve. Every case is different, and banks will be required to develop an approach that is appropriate. Clearly, however, there will be opportunities if we can address the problems of businesses that are basically sound but have other problems.

Deputy Mick Wallace, who is present, referred to raising awareness among existing directors of companies about the provisions of the Bill and directors' duties. He asked whether the Credit Review Office and the ODCE would undertake this role. Both bodies are developing material to make it easier for people to understand their obligations. That will definitely be important. As we proceed with the legislation, we will be enhancing the awareness campaign. The Bill makes provision for people who wish to retain their old arrangements. There are transition opportunities and people will not find the rug pulled entirely from under them on a given day. There is some flexibility. People will see the merit of moving to the new, simpler arrangements.

Many other issues were raised, including upward-only rent reviews, jobs in the retail sector and broadband. They are not really central to this legislation. They are all valid, none the less, and I will be happy to deal with them on another occasion.

I thank the Members who participated in this debate. By and large, the Bill was universally welcomed. I appreciate Deputy Dara Calleary’s welcome for and understanding of the work that has gone into it. He dealt with this as a Minister of State in my Department. We will have a bit of a marathon on Committee Stage. We will certainly to get to know one another very well, if we do not already.

I thank my officials and the company law review group for their work on the Bill. I also thank Members of the House for their constructive contributions. I look forward to the debate on Committee Stage and hope the final result will be legislation that will help business and employment creation, thereby living up to the Taoiseach's ambition that Ireland will be the best small country in the world in which to do business by 2016. We will drive forward as best we can.

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