PRIVATE COMPANIES will be required to have a minimum of one rather than two directors and will no longer be obliged to hold a “physical” annual general meeting each year under new draft legislation published yesterday.
Parts one to 15 of the new Companies Bill, which totals more than 1,300 pages, was published by the Department of Enterprise, Trade and Innovation yesterday.
The remainder of the legislation – which deals mostly with public limited companies (plcs) and other corporate entities – will be published next year after which the Bill will go before the Oireachtas.
The legislation, which represents the most significant overhaul of company law since 1963, is the culmination of more than 10 years of work by the Company Law Review Group.
The body established by statute in 2001, whose members include representatives from the business, trade union, legal and accountancy professions.
The Office of the Revenue Commissioners and the director of corporate enforcement are also represented.
As well as consolidating various strands of company and case law, the new Companies Bill contains a significant number of reforms.
In addition to the change to the number of required directors, other elements include:
* the legal doctrine of ultra vireswill no longer apply to companies;
* private companies limited by shares will be known as “cls” instead of “ltd”; and
* companies will no longer be required to draft a document containing its articles of association which will now be included in the Bill by default.
The Bill will also include an exhaustive listing of the duties of directors – these were previously contained in case law – and of all criminal offences under company law.
Minister for Enterprise Richard Bruton said the new legislation will significantly reduce business costs, making it “easier and cheaper” to start and run a company.
The legislation was widely welcomed by business groups yesterday.
Thomas Courtney, chairman of the Company Law Review Group, said the new legislation reflected the relatively high proportion of smaller private companies operating in Ireland.
“Private companies account for nearly 90 per cent of all Irish companies but the Companies Acts still treat the public company limited by shares, or plc, as the standard company type even though they account for only 1 per cent,” said Mr Courtney.
“The new Companies Bill will change this and refocus company law towards smaller companies,” he added.
