New Companies Bill Published

Profession:McCann Fitzgerald
 
FREE EXCERPT

Article by David Lydon, Barry Devereux, David Byers and Paul

Heffernan

The Government has proposed important changes to the Companies

Acts. When enacted, the changes will expand the powers of the

Director of Corporate Enforcement, increase disclosure obligations

in respect of certain transactions between a company and any of its

directors (including special rules for disclosure by banks) and

modify the residency requirement that applies currently to at least

one director of many Irish companies. The changes are expected to

be fast-tracked into legislation.

On 9 April 2009 the Minister for Enterprise, Trade and

Employment introduced the Companies (Amendment) Bill 2009. The Bill

proposes to change the Companies Acts in three important respects

and the Minister has indicated that the Bill is to be enacted as a

priority.

Powers of the Director of Corporate Enforcement

The Bill proposes to expand the powers of the Director of

Corporate Enforcement ("DCE") to police compliance with

and to investigate suspicions of breaches of the Companies Acts.

The changes will:

give to the DCE a specifi c right of access to and the power to

take copies of books of a company that records a director's

declaration of his or her interest in any contract or proposed

contract with the company;

clarify the DCE's power to require the production of

records from third parties where the records relate to the business

of a company under investigation;

subject to "appropriate safeguards", expand the power

for the DCE to enter and search premises (including allowing the

court to extend the period of validity of a warrant, and permitting

the DCE to seize and remove papers and electronic information for

subsequent examination elsewhere); and

permit the DCE to seize information (whether hard copy or in

electronic form) that is claimed to be legally privileged, and

provide for its storage by the DCE – without having been

examined by DCE – pending determination by the High Court

as to whether any privilege attaches.

Transactions with Directors – Disclosure

Obligations

The Bill proposes to increase disclosure obligations in respect

of certain transactions between a company and any of its directors,

and in that regard to apply special rules for disclosure by

"licensed banks". In that context the Bill will recast a

breach of the provisions governing loans by a company to any of its

directors or connected persons as a criminal offence.

It is proposed that a company's annual accounts...

To continue reading

REQUEST YOUR TRIAL