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Companies Bill 2012: Second Stage (Continued)

Tuesday, 23 April 2013

Dáil Éireann Debate
Vol. 800 No. 3

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  7 o’clock

Anything that can assist in saving jobs in SMEs and can assist viable SMEs get through a difficult trading process is to be welcomed.

Companies, along with many other institutions, have taken a battering in recent times. There is no sense in us putting much work, in the coming weeks and months, into the Bill unless the enforcement side of the Department is beefed up. The enforcement side and the resources available to the Companies Registration Office are insufficient given the number of cases being fought in respect of breaches of company law in recent years. I appreciate it is a time of constrained resources but if we are to rebuild confidence in the business community and implement the spirit of the Bill in making it easier to set up a business, we must examine the resources available to company law enforcement within the Minister's Department. The difficulty in introducing the legislation is that people will use the big change to justify reckless behaviour. The message must go clearly from the House that it will not be tolerated. The same message must go from the Minister's enforcement agencies in their public utterances in the coming weeks and months.

Various groups have welcomed the Bill, including some that do not often welcome the measures of this Government. The ISME chief executive, Mr. Mark Fielding, welcomes the requirement for one director to start a business. It will assist many people. The Minister referred to sole traders and we all know people who drag others into the company process, which leads to difficulties, for the sake of making up the one extra person. Mr. Fielding also points to the anomalies and expense added by the confusion that company law represents for small businesses. He is hopeful the cost and burden of running a small business will be substantially reduced if the proposals are implemented. The Small Firms Association has acknowledged significant benefits by reducing red tape and making company law obligations easier to understand. The obligations continue to exist and the bar is high but they are more accessible and understandable.

Legislation often appears in the House with the best of intentions and we see it through Committee Stage and the Seanad and then various agencies add to it when it comes to be implemented. They goldplate the legislation. We are particularly good at goldplating EU regulations. I hope we do not goldplate the Bill to the extent that its provisions, its cost saving measures and accessibility revert to the current position. Goldplating the Bill in its implementation should not create barriers for those accessing the benefits of the Bill. It is vital the Minister ensures that does not happen.

I welcome the Bill and I compliment all involved in it. I am sure many involved in the Bill have retired from the Department and we think of them and wish them well. I assure the officials and the Minister that we will look after the child as it goes through the school process. We will table a series of amendments to improve the Bill on Committee Stage but, generally, we are supportive of the Bill. The sooner we can get it implemented and the sooner companies, business people and those who want to start businesses at this time can gain the benefit of the Bill, the better.

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín Cuirim fáilte roimh an Bhille seo agus molaim an obair atá déanta ag an Company Law Review Group. Tá sé tar éis Bille íontach, tabhactach and cuimsitheach a chruthú.

I fully endorse the approach taken. It is unusual that the Minister and I are on the same side for three Bills in a row. I am sure normal business will resume soon enough. The work done by the Company Law Review Group, CLRG, the Department, the Minister and previous Governments has led to this Bill. It is an impressive Bill with multiple facets facing companies and ensuring the highest standards in corporate governance. The best place to address issues is among those closest to the issues. The approach of bringing together such a diverse and inclusive group of legal practitioners, representatives of various strands and sectors of business, and trade unions to address a common concern is a new benchmark in developing legislation. It should be replicated elsewhere. I am sure many representatives who served on the CLRG never thought this phase would end but the legislation is now with us.

The CLRG had over ten years to develop the ideas and work with the Department on drafting of the legislation. Given the impact and scale of the legislation, I hope the Minister will allow significant time for its discussion and debate. The implications of the legislation are deep and profound for business, the community and the wider sector. It is reputed to be the largest item of legislation tabled in the State and we should give it due consideration.

Sinn Féin comes at this legislation from a positive perspective. We share the aims of the Bill and will work to ensure its timely process through the Oireachtas. The points we raise and the amendments we will propose are for the purpose of simplification and streamlining the process and reducing cost to business, while maintaining the highest level of commercial probity and governance. I hope the Minister will take on board the points we raise, provide clarity, review our contribution and, where possible, amend the legislation.

Over 12 years ago, the CLRG was tasked with the mission to bring forward proposals to develop company legislation. Its mission statement was "to promote enterprise, facilitate commerce, simplify the operation of the Companies Acts, enhance corporate governance and encourage commercial probity". The legislation, as presented, addresses these matters in a comprehensive and detailed fashion. Central to the legislation is the need to simplify the legal framework. For seven years, I worked in business consultancy with businesses starting off and plotting their way through every stage of commerce. For many businesses, it was very difficult to navigate the legal framework governing the area. This simplification is welcome.

Recent times are littered with cases in which corporate governance and commercial probity were secondary to the reduction in regulation and oversight and the elevation of the pursuit of profit at all costs. Society is paying a dear price for that. We have seen how the banking sector and property development benefited and profited from sharp practice. We have seen how auditors passed company accounts as solid only for the company to collapse shortly after, leaving huge debts and having an impact on downstream SME creditors that makes it impossible for them to struggle and survive. Through this, we saw workers losing their jobs and livelihoods. We see daily cases of directors in front of the courts pursued for assets that appear to be lost in myriad companies and subsidiaries. The business practices and ethos of the past brought this State to its knees. It provides cases studies to compare the effectiveness of the legislation.

The key test is the difference the legislation has on our society, on reigning in sharp practice and on promoting sustainable regulated frameworks for business. Will the legislation promote reasonable, responsible and open business? I am also mindful that entrepreneurs face major costs in business start-up. Start-up is the key time for enterprise in our society Many people have ideas but not the wherewithal to put the ideas into concrete and bring them to fruition. Each week, I am contacted by SMEs across Meath and across the State with regard to meaningless bureaucracy and replication of administration. There is a balance between proper oversight and regulation and bureaucracy.

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