Seán Sherlock (Cork East, Labour) | Oireachtas source

Senators heard it here first. The primary defining feature of a DAC will be the continued existence of an objects clause in the constitution of the company. It is envisaged that entities which would welcome the DAC include special purpose companies, for example, those incorporated for joint ventures or for use in a financing transaction. However, the Bill does not restrict the availability of DACs to persons engaged in such activities.

Part 17 is concerned with public limited companies, PLCs. The key difference between public limited companies and private companies is that only PLCs will be permitted to list their shares on a stock exchange and offer them to the public. A PLC is now permitted to have as little as one member and there is no maximum number on the membership of such a company. A PLC must have at least two directors. A PLC is obliged to establish an audit committee, and corporate governance provisions for the majority of PLCs are set out in this Part.

Part 18 provides for companies limited by guarantee, CLGs, not having a share capital. Since guarantee companies do not have a share capital, they 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. The audit exemption is now being extended to guarantee companies under the Bill, if it fulfils the criteria for a small company. It is expected that this will benefit the many guarantee companies that are charities or sports clubs, etc. However, to ensure probity, 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 provides 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 exist already.

Part 20 provides 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 provides for the registration and disclosure requirements of external companies, also known as foreign companies or overseas companies, which have been formed and registered outside the State but which have a connection with Ireland. Existing law provides for both the concept of "place of business" and the concept of "branch". Under the Bill, however, the "place of business" is abolished and the law will provide only for the "branch" concept. By not retaining the concept of "place of business", it is hoped to remove the uncertainty in the current law and oblige external companies to register as a branch if appropriate and 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 which deals with PLCs.

Part 24 provides for the establishment of companies as investment companies, currently provided for under the 1990 Act. 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.

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

I am delighted with the significant benefits which the Bill will bring to all companies, big and small, throughout the country. It will make it far easier to run a business as a company and it will enhance Ireland's competitive position as a place to start and grow a business. I look forward to working with the Senators on progressing the Bill to enactment, and I believe it will bring significant benefits to companies and to business life in Ireland.

I commend the Bill to the House.