The Companies Bill 2012 was published on 21 December 2012. The heads of the Bill were drafted by the Company Law Review Group. The Bill will reform, consolidate and amend the company-law statutes applicable to Irish companies.
Under the legislation, the private limited company will now form the model company type and the provisions applicable to it represent the majority of the Bill. (Re)insurers and other entities that are authorised or regulated in Ireland are typically incorporated as private limited companies, though all types of companies will be affected by the proposed changes.
Some of the key proposed changes for private companies include:
- A company’s Memorandum and Articles of Association will be replaced by a single-document constitution.
- Companies will be obliged to notify the Companies Registration Office of all persons who are conferred with an unrestricted authorisation to bind the company. The authority of those persons, once registered, will be deemed to be sufficient in the case of any dispute. This will affect executive licences and levels of authorities in insurance arrangements.
- Directors of companies with a balance sheet in excess of €12.5 million and turnover in excess of €25m will be obliged to sign a compliance statement acknowledging responsibility for compliance with company law obligations. Directors will have to confirm that they have put in place appropriate structures designed to ensure compliance.
- The current common law and equitable principles regarding director’s duties will be codified. This should ensure greater clarity and transparency for directors. The indemnification of directors and others by a company will also change.
- New processes for mergers and divisions will be introduced. In certain circumstances, mergers may be effected without the need for court approval. There will be a streamlined process for capital reductions.
Companies incorporated as public limited companies will also be subject to a new regime under the Bill.
The Bill is not expected to be passed before 2014 and amendments are likely before it becomes law.