On 11 October, the Minister for Jobs, Enterprise and Innovation, Richard Bruton, announced the fast-tracking of legislation to allow companies to apply to the Circuit Court for examinership. This measure is aimed at reducing the costs associated with an application for examinership.
Provisions to give effect to this were included in the Companies Bill 2012 (in Sections 510(7) and (8) and Section 351(5)). However, owing to the complex and lengthy nature of the Companies Bill it is expected to take a period of time before the enactment process is completed. Therefore, it was decided to proceed on a priority basis with the provisions relating to Circuit Court examinership as well as a small number of other provisions. The provisions relating to applications for examinership in the Circuit Court will now be removed from the Companies Bill 2012 and included in the Companies (Miscellaneous Provisions) Bill 2013, which will be drafted on a priority basis, with enactment by end of 2013 expected. Other provisions expected to be contained in the Bill include a measure aimed at reducing the cost of compliance for businesses by making it easier to file statutory accounts online.
Set out below is a synopsis of the provisions expected to be included in the new Bill, according to the Department of Enterprise, Jobs and Innovation. The first provision relates to examinership while the remaining provisions deal with unrelated areas:
An amendment to the existing examinership provisions for small private companies: This provision will allow small private companies to apply directly to the Circuit Court to have an examiner appointed instead of having to apply to the High Court first, as is currently the case. This will lower costs and provide greater accessibility for small private companies to the examinership process by eliminating the need for High Court involvement. Small companies are those that satisfy two out of the following three conditions:
- Balance sheet not exceeding €4.4million;
- Turnover not exceeding €8.8million; and
- Number of employees not exceeding 50;
- A provision to simplify the process of e-filing by companies of annual returns: This will provide for a more efficient electronic filing of accounts with the Companies Registration Office by removing a true copy requirement. It will also reduce the administrative burden associated with the filing of accounts by companies;
- A provision to allow specified regulatory authorities to disclose information relating to offences under the Companies Acts to the Director of Corporate Enforcement;
- A provision to enable the Irish Auditing and Accounting Supervisory Authority (IAASA) to impose a levy on relevant statutory auditors and audit firms to defray the costs of carrying out the quality assurance function, which it is proposed will be transferred from the Recognised Accountancy Bodies to IAASA; and
- A provision to apply investigation and penalty systems to certain third country auditors/audit entities who carry out audits on companies incorporated in specific third countries and territories: Commission Decision 2011/30/EU, as amended by Commission Decision 2013/288/EU, sets out regimes to be applied by Member States to the auditors and audit entities that carry out audits of the annual or consolidated accounts of companies incorporated in certain third countries, whose transferable securities are admitted to trading in the State. These regimes are based on evaluations carried out by the EU Commission on the public oversight systems for auditors and audit entities of particular territories which have concluded that these are not equivalent to the systems applicable in the EU. The provision of a facility for IAASA to apply powers in respect of auditors of the accounts of companies based in these territories is therefore considered prudential.