The Report and Final stages of the Companies Bill 2012 were completed yesterday evening, 30 September 2014, when all of the 164 amendments tabled by the Department of Jobs, Enterprise and Innovation were agreed to.
The next step will be for the Bill to be sent back to Dáil Eireann for approval, although no date has yet been announced for this. This is because the amendments proposed and made in the Seanad, though introduced by the Government, have to be approved by the Dáil before the Bill can be formally passed by both Houses of the Oireachtas.
As was the case with many of the changes previously proposed and agreed during the passage of the Bill through both the Dáil and the Seanad, many of the changes dealt with last night were of a technical nature, or were inserted for the purposes of clarification.
The following is a list of some of the key amendments which were made to the Bill during the course of yesterday's debates:-
- The current requirement in the Bill for a company to be obliged to notify the Registrar of Companies where the board of the company has authorised any person (including a director) to bind the company generally, is to be amended so that the obligation ceases to be mandatory and instead will be permissive. This amendment will be very helpful, as the provision as it stood would have required the managing directors of many Irish companies to be registered with the Companies Registration Office (CRO). The amendment also means that where a person within the company but below board level is similarly authorised to bind the company generally, it will not be a mandatory requirement for that person to be registered, although the company will have the power to do so if it wishes.
- A company will be able to empower any person to be its attorney to execute deeds or do any other matter inside or outside the State without the appointment of the attorney having to be under its common seal. Similarly, a deed signed by the attorney on behalf of the company need not be under the attorney's seal. These are useful amendments, which will simplify the process of appointing attorneys and the execution of documents by attorneys.
- The members of a company in general meeting are to be given the power to approve the imposition of a restriction on the power of a director to exercise an independent judgment, in addition to this being permitted by the company's constitution, or a case where the director considers that the restriction is in the interests of the company.
- The circumstances in which a director will be liable to account to his company for any gain made for a breach of his statutory fiduciary duties, and to indemnify his company for any loss or damage resulting from that breach, are to be extended so that they will cover all of these duties, apart from the duty to act honestly and responsibly in relation to the conduct of the affairs of the company.
- The Minister is to be given a new power to grant an exemption to an unlimited company from the obligation to ensure that its name ends with the words "unlimited company" or its Irish language equivalent (or an appropriate abbreviation).
- In the case of private unlimited companies (ULCs) and public unlimited companies (PUCs), it will be necessary for an instrument of transfer of a share to be executed by or on behalf of the transferee, as well as the transferor, in all cases.
- Designated activity companies (DACs), PLCs, companies limited by guarantee, and unlimited companies, in each case having two or more members, will not be permitted to dispense with holding an AGM.
- The current disapplication in the Bill to DACs of the standard and long-established private company governance provisions enabling directors to hold any office or place or profit under their company, or to vote and be counted in the quorum in relation to contracts in which they are interested, is to be removed. This is a very welcome amendment, as the proposed disapplication would have been problematic for certain types of companies which will be obliged to convert to DACs, such as insurance companies and "Section 110" special purpose companies.
- An express statutory right is being given to the Director of Corporate Enforcement to access books and documents, and obtain such information as he may reasonably require, in respect of a company that has availed of the audit exemption, in order that the Director may satisfy himself that the company has complied with the relevant conditions to enable that exemption to apply.
- Useful technical changes are being made to the sections of the Bill dealing with mergers and divisions of companies, including a new provision which will extend the obligations of the keepers of various registers in the State (for example, the register of members of a company, the Land Registry, the Registry of Charges kept by the CRO, etc.) to enter the name of the successor company in the relevant register on production of a court order to the effect that the requirements in relation to the relevant merger or division have been met.
- A new provision is being inserted in the Bill, similar to Regulation 84 of Part 1 of Table A in the first schedule to the Companies Act 1963, which was inadvertently omitted. This is another welcome amendment which will enable directors of PLCs to vote on certain contracts or arrangements etc. in which they are or may be interested (e.g. company share option or pension schemes), as is currently the position.
- Directors of Part 24 investment plcs are not required to produce a directors' compliance statement or related statement, as required by Section 225 of the Bill.
- Companies incorporated outside the State which, if they were incorporated in the State, would be Part 24 investment companies (other than migrating companies), are not to be prohibited by provisions currently contained in the Bill from advertising or marketing their shares without Central Bank of Ireland approval.
- It will be possible to deposit an instrument of proxy with a company by sending it by electronic means as well as by sending or delivering it by other means such as post or by delivery of the physical instrument.
- It is to be clarified that State-sponsored "Companies Act" companies will be subject to the law governing DACs, and that they will be able to convert to DACs.
We understand that the Government are now working towards having the Bill formally approved in the Dail and ready for signature by the President within the next two months, and having the Act commenced and in force by June 2015.