The General Scheme of the Companies (Corporate Enforcement Authority) Bill 2018 was published in December 2018. The purpose of the Bill is to make a number of amendments to the Companies Act 2014 (the “Act”) including:-
- The establishment of the Office of the Director of Corporate Enforcement (ODCE) as a stand-alone agency, to be called the Corporate Enforcement Authority (the “Authority”)
- Changes to Share Capital as recommended by the Company Law Review Group
- Amendments to Corporate Governance provisions
- New grounds for restriction of directors
- Directors to supply PPSN to the CRO for verification purposes
- End of exemption from including particulars of directors on business letters
Corporate Enforcement Authority
The Bill provides for the establishment of the Corporate Enforcement Authority as an independent agency to investigate suspected offences under the Act and to enforce the Act. The powers of the agency are to be enhanced.
Changes to Share Capital
The Company Law Review Group recommended its 2017 Report Relating to Shares and Share Capital a number of amendments to the Act including:
- Restores a provision enabling a company with a share premium account to use the account for various purposes including the writing off of the company’s preliminary expenses
- Amendment to Sec 91 of the Act clarifying that a transaction can proceed even if there is no reorganization on the company’s capital and only where the company has adequate distributable reserves
- Disapplies the requirement for distributable reserves to redeem own shares for a private unlimited companies (ULCs) and public unlimited companies (PUCs)
- Set out capital reduction as an exclusion or exception from the definition of distribution in Sec 123 of the Act.
Amendments to Corporate Governance provisions
The Act makes a number of amendments to the Corporate Governance provisions in the Act
- A secretary of a company must be at least 18 years of age
- Align the provisions relating to the instrument appoint a proxy with the proxy’s right to demand or join in demanding a poll
- Align the statutory solvency test which applies for the purposes of the Summary Approval Procedure declaration with the test applicable under Sec 203(2)
New grounds for restriction of directors
The Bill proposes new grounds for a restriction order to be made by the High Court where a director who has
- Failed to convene a general meeting of shareholders for the purpose of nominating a named liquidator; or
- At such a meeting fails to table a motion to nominate a named liquidator;
- Has failed to provide the required notice to employees in a winding up
Directors to supply PPSN to the CRO for verification purposes
It is proposed to oblige directors of companies to supply PPSN to the Registrar (in data format only) when-
- A1 – Application to incorporate a company
- B1 – Annual Return
- B10 – Change of directors/secretaries or their particulars
The proposal is to assist the Registrar of Companies to support the accuracy of the Register and to address duplication on the Register. For directors who do not have a PPSN they shall supply a copy of the photo page of their passport.
End of exemption from including particulars of directors on business letters
The exemption allowing the Minister for Business, Enterprise and Innovation will be removed from the Act.
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