Written answers

Thursday, 24 November 2016

Department of Jobs, Enterprise and Innovation

Company Law

Photo of Peter BurkePeter Burke (Longford-Westmeath, Fine Gael)
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256. To ask the Minister for Jobs, Enterprise and Innovation the rationale in the Companies (Accounting) Bill 2016 for continuing the requirement for disclosure of directors' emoluments in small company financial statements while exempting micro companies from that requirement, in contrast to the equivalent legislation applying in Northern Ireland and the rest of the UK, which exempts both small and micro companies from the disclosure requirement (details supplied); if she has raised this issue with the representative groups for SMEs here and business representative bodies; if she has discussed the proposed requirement with the Office of the Data Protection Commissioner; if her attention has been drawn to concerns that this requirement will result in the publication of commercially sensitive and personal data relating to individual business owners, which are not required of other persons that are subject to PAYE on their personal earnings; and if she will make a statement on the matter. [36709/16]

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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The disclosure of directors’ remuneration is a long-standing requirement in Irish company law. Since the introduction of the Companies (Amendment) Act 1986, small companies have been obliged to publically disclose directors’ remuneration. This requirement is now provided for at Chapter 6 of Part 6 of the Companies Act 2014, which largely re-enacts the existing provisions in earlier Companies Acts.

Section 26 of the Companies (Accounting) Bill 2016 exempts micro companies from the requirement to disclose directors’ remuneration. Micro companies are a new category of company which will encompass only the very smallest of undertakings. To qualify as “micro”, a company must not exceed more than one of the following three thresholds: a turnover of €700,000, a balance sheet of €350,000 and an average number of employees of 10. Because of their very small size, micro companies will be exempt from disclosing a range of notes to the financial statements, one of which is directors’ remuneration. This is considered appropriate and proportionate given their very small size.

The introduction of the micro entity regime was part of a public consultation run by the Department in late 2013. As the relevant provisions for small companies had been in law for some time, and the Government was not considering any changes to them, those provisions were not referred to in the consultation. For similar reasons, it was not considered necessary to consult the Data Protection Commissioner.

I understand that concerns were raised previously on this issue. However, directors’ remuneration is an important piece of information for the understanding of the financial performance of a company. Its disclosure is an appropriate measure in light of the fiduciary duties owed by directors to companies.

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