Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I thank the Acting Chairman, Deputy Feighan, for the opportunity to speak on this Private Members' Bill proposed by Deputy Donnelly, the Companies (Amendment) Bill 2014. While I cannot support the Bill for the reasons I will outline shortly, I commend Deputy Donnelly on what he is trying to achieve with this Bill in terms of making the liquidation process more simple and less expensive, and for putting this matter on the agenda because the real and tangible problems facing small businesses on a day-to-day basis needs to be continually highlighted.

There are many problems facing small businesses but the problem that concerns them most is the lack of finance, particularly the lack of overdraft facilities, which is leaving them without cashflow. As we will all be aware, cashflow is the lifeline of any business and without it the business will fail.

Small businesses create employment and it will be small indigenous industry that brings economic recovery to counties such as Monaghan and Cavan. Only last week I went into a retail business in Monaghan town and heard at first hand the difficulties it was facing. Those who run the business have to meet the fixed overheads such as rates, ESB, water charges and rent, and while they would prefer if these were much lower, they know they have to pay them. Their biggest problem is that the bank has withdrawn their overdraft facilities and they are finding it practically impossible to continue trading.

Many business owners have used all their reserves and their personal savings, there is nowhere left to go to get finance, and they are at breaking point. Rural towns in Ireland are on their knees. Small shop owners are working six and seven days per week and are waiting anxiously for customers to appear. Unfortunately, the customers are shopping online, saving their money or have gone elsewhere. Business owners need overdraft facilities from their banks to replenish their stock to attract customers but it is not forthcoming. They are putting in long hours for little or no return. Businesses need the support of their banks. I want to use this opportunity to call on the banks, once again, to give small business a break, work with them, understand their businesses better and support them. There is no point in giving a bank's customers an umbrella when the sun is shining and taking it away when it starts to rain.

I acknowledge the schemes that have been introduced by the Minister, Deputy Bruton. Both the credit guarantee scheme and the microenterprise loan fund represent a significant change in enterprise support for locally traded sectors. The message needs to be sent out clearly to SMEs that there are many supports in place for them and they need to avail of them to the benefit of their business.

My main concern with the Bill is the negative impact and lack of protection it would give to creditors, who will most likely be other small businesses, and the fact that it removes oversight by the courts. The Construction Contracts Act 2013 gave protection to subcontractors, which are also small businesses. It puts in place a statutory arrangement with regard to payments under construction contracts, including providing for interim payments, that reduces a payee's exposure to non-payment and introduces a new mechanism for swift resolution of payment disputes through a process of adjudication. This was welcomed by subcontractors and it is important that we do not put anything in place that would undermine this legislation.

Examinership will give a company protection from its creditors and allow the examiner to put forward a plan which will force creditors to take a write-down. The Bill forces creditors to initiate a court case if they object to the plan. This is designed to make it more difficult for creditors who supplied goods or services to take on the risk and the additional cost of a court challenge in an effort to recover moneys owed to them. We cannot have a situation where it would be easier for ailing companies to write down debts at a cost to their creditors while at the same time introducing new obstacles for those creditors who have supplied goods and services in good faith.

The Company Law Review Group has advised that while simplification of examinership may be possible, which could reduce costs further, court oversight remains essential if the legislation is to be legally robust and respect the provisions of the Constitution. This Bill also raises constitutional concerns about protection of property rights.

I welcome the commitment from the Minister, Deputy Bruton, that he will set up a working group to examine the proposal of a more simplified administrative initiation of examinership for small private companies and I ask him to deal with this as a matter of urgency.

The Companies Bill 2012 which is currently due to go to Report Stage in the House in the coming weeks, is targeted at reforming company law, and in particular reducing the costs of doing business in Ireland. It is the largest substantive Bill in the history of the State and will provide significant benefits to companies by reducing red-tape and making company law obligations easier to understand.

This legislation is part of the Government's drive to make Ireland the best small country in the world in which to do business. It was encouraging to read that Forbesmagazine recommends Ireland as one of the best small countries in the world in which to do business.

The Companies Bill 2012 will consolidate the 17 existing Companies Acts, which date from 1963 to 2013, into a single Act and introduces a number of reforms. I am pleased that it is hoped to have this Bill enacted in 2014.

I want to acknowledge the spirit in which the Companies (Amendment) Bill 2014 is being brought forward but in view of the issues I have highlighted I will not be supporting it.

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