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Out-Law Analysis 9 min. read

What planned Irish company law reforms mean for businesses

Proposed changes to company law in Ireland would provide greater clarity and flexibility regarding day-to-day business operations, audit regimes and insolvency and restructuring processes, as well as bringing about more robust corporate surveillance and enforcement, if enacted.

The General Scheme of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 (the Bill) envisages significant amendments to the existing Companies Act 2014. The proposed changes could have a lasting impact on how Irish companies are managed, governed and regulated. The Bill will now be referred to the Office of Attorney General for priority drafting.

Corporate governance

Electronic communications and amendment to sealing requirements

Under the Bill, scope for companies to hold virtual general meetings would be a permanent feature of the statutory framework, having previously been provided for on an interim basis only during the Covid-19 pandemic.

It is also proposed under the Bill that the signing and countersigning of an instrument to which the common seal of a company is affixed need not be on the same counterpart – this measure was also previously provided for on an interim basis.

By allowing companies to conduct meetings entirely online or through a hybrid model and providing greater flexibility around the procedures for affixing the common seal, the Bill accommodates flexibility and accessibility, potentially increasing participation rates among shareholders and stakeholders.

The proposed amendments recognise the evolving nature of corporate operations, which are increasingly reliant on digital solutions. The changes are particularly relevant in the post-pandemic era, where virtual meetings and document execution have become the norm. The Bill seeks to ensure that concerns around ensuring equivalent levels of participation, interaction and voting rights as in traditional, in-person meetings are addressed.

Hear Neil Keenan and Zara West discuss this story on The Pinsent Masons podcast here or wherever you get your podcasts.

Extended disclosure and notification requirements

Under EU anti-money laundering legislation, companies and bodies corporate are required to file information in respect of their beneficial owners with the Registrar of Beneficial Ownership (RBO). The Bill provides for the introduction of an additional involuntary strike off ground for failure to notify the RBO of information in relation to the beneficial owner of a company.

Involuntary strike off means that a company is struck off the Register of the Companies and the directors of that company are under risk of penalties such as disqualification. Liabilities of directors, officers and members continue and may be enforced notwithstanding the company being struck off.

The proposed legislation provides that the RBO may notify the Registrar of Companies (ROC) of the failure of a company to provide information and the ROC may initiate the strike off procedure. Two other additional grounds for involuntary strike off are proposed in the Bill – failure to notify a change of registered office and failure to record a company secretary.

In a positive move to collect and analyse gender-specific data, the Bill provides for the voluntary provision of information by companies regarding gender balance among their board of directors. This may be disclosed on the company’s annual return. This a welcome and practical development that will provide company investors with greater transparency as to the kind of company they are investing into and plays into the trend we are seeing where investors are keen to ensure that the boards of companies they are considering investing in have adequate gender diversity.

Audit exemption regime changes

Under the Bill, adjustments to the audit exemption regime for small and micro companies are proposed. The provisions specifically target conditions under which these exemptions might be lost due to late filing.

Under the current regime, small and micro companies lose their audit exemption on the first occasion that they fail to deliver an annual return on time. The amendment would mean that the audit exemption would only be lost where a small or micro company fails to deliver an annual return on time for a second or subsequent time, within a period of five consecutive years.

The amendment aims to alleviate the regulatory burden on smaller enterprises, recognising the disproportionate impact that loss of an audit exemption can have. However, it necessitates a careful balance between reducing administrative burdens and maintaining financial transparency and accountability standards.


The Bill proposes practical amendments to the Companies Act with respect to mergers.

Under the current legislation, only one company at a time may merge by absorption into a successor company. This is a burden in a group restructuring scenario where several companies are being absorbed into another group company, because each merger must be approved separately as opposed to having them all approved together under one common draft merger agreement.

Under the Bill, in cases of private companies, it would be possible to facilitate a merger by absorption of a group of subsidiary companies wholly owned by the same parent company in one transaction.

In addition, a correction is proposed to the Companies Act which relates to statutory mergers involving ‘designated activity companies’ (DACs) only. The planned change would facilitate the merger of two or more DACs – the current rules dictate that at least one party to a merger has to be a private company limited by shares. This will streamline case management and reduce the timeframe required to complete certain types of merger.

Insolvency and restructuring

The Bill seeks to introduce greater clarity and efficiency in the processes related to receivers and the winding up of companies. By streamlining these procedures and enhancing transparency around receivers' fees, the Bill aims to protect the interests of creditors and other stakeholders during insolvency proceedings. These changes could help minimise disputes and expedite the resolution of insolvency and restructuring cases, benefiting the overall economic environment.

Transparency in receivership

A legislative mechanism for company members and creditors to access information in respect of receivers’ fees within seven days of a request is provided for in the Bill. This will improve the overall transparency and accountability of the receivership process and reflects the fact that although a receiver’s primary function is to realise assets charged to the benefit of the debenture holder which appointed them, in doing so the receiver is an agent for the company meaning that the company is liable for the receiver’s remuneration.

From the creditor perspective, the proposed amendment is important because the appointment of a receiver gives rise to a risk that the company assets available to other creditors will be reduced.

To bring receivers’ rights to remuneration in line with those that apply to liquidators, a provision recognising a receiver’s entitlement to remuneration has also been proposed. Under the proposals, the entitlement will arise regardless of the terms on which they are engaged. This entitlement may be expressed to be by way of a percentage, as is common; the time spent in the conduct of the receivership; or by reference to any method or thing.

The Bill sets out, for cases where the court fixes the remuneration of a receiver, a list of matters to be taken into account by the court when fixing that remuneration. The proposed matters mirror the existing ones specified in the Companies Act where a court fixes a liquidator’s remuneration. These include the complexity of the case, the time properly taken in attending to the company’s affairs, and the value and nature of the property that had to be dealt with.

Obligations of liquidators

Under the current legislation, liquidators are obliged to apply to the court for the restriction of director(s) of an insolvent company and may only be relieved of this obligation by the Corporate Enforcement Authority (CEA). Under the Bill, an express provision is proposed to provide that this liquidators’ obligation endures until the conclusion of all proceedings relating to restriction, including any appeal brought against restriction orders. It appears that the amendment is intended to avoid a scenario where a liquidator refuses to defend an appeal.

The proposed changes provide some welcome clarity on liquidators’ obligations and bring the Companies Act in alignment with case law and the realities of corporate insolvency practice.

Various technical and procedural amendments aimed at improving and clarifying the operation of the 'Small Companies Administrative Rescue Process' (SCARP) are also proposed. SCARP was introduced in 2021.

Powers for the CEA

Established in July 2022 under the Companies (Corporate Enforcement Authority) Act 2021, the mission of the CEA is to improve the compliance environment for corporate activity in Ireland. Under the Bill, the CEA’s powers would be strengthened, underscoring the government's commitment to rigorous enforcement of corporate governance standards. The proposals are designed to improve the CEA’s ability to investigate and prosecute company law breaches effectively.

CEA surveillance powers

It is proposed that the CEA be given the power to exercise statutory targeted surveillance functions – in a similar manner to other enforcement bodies such as An Garda Síochána, the Revenue Commissioners and, since October 2023, the Competition and Consumer Protection Commission (CCPC).

The CEA’s surveillance powers would be limited to suspected ‘category 1’ and ‘category 2’ offences – i.e. “arrestable offences” – and the CEA would have to seek prior court approval to use them in non-urgent cases. While these powers are essential for maintaining a robust regulatory framework, they also emphasise the need for clear guidelines and safeguards to prevent overreach and ensure that investigations are conducted fairly and transparently.

Clarity on investigations and privileged material

In an investigation into a company’s affairs, an individual or company cannot be compelled to disclose privileged legal material. However, the disclosure of material may be compelled in an investigation even where it is apprehended that it contains privileged material if the confidentiality of the material can be maintained pending the determination by the court of whether the material is actually privileged. Under the Bill, the court process for determining whether material seized as part of an investigation is privileged would be streamlined.

Under the existing legislation, the application to the court by the CEA, or court appointed investigator, for a determination on privilege is made on notice. The Bill provides for this to change so that the application can be made on an ‘ex parte’ basis, without notice to the individual or company the subject of the material. This amendment will be particularly relevant where the investigator obtains material from a third party, as the individual or company that is the subject of the investigation will not be tipped off in advance. This addresses the risk that they could destroy or tamper with evidence which the CEA is unaware of or has not obtained possession of yet.

Under the Bill, the period within which the CEA, or court appointed investigator, must apply to the court for a determination on privilege after taking possession of material would be extended, from seven days to 14 days. This proposal is recognition of the fact that commercial cases may involve extensive documentation and an initial examination from a relevance perspective may take time.

Under the Bill, it would also be possible for the court to appoint more than one independent person to examine the material and prepare a report for it to examine. This is aimed at expediting the preparation of the independent report, so that the court can reach its determination on privilege quicker, particularly where there is a significant amount of potentially privileged information.

Two new criminal offences would also be created under the proposed new legislation: obstructing a CEA officer or staff member, and intimidating a CEA officer or staff member or their family. Both offences could result in a term of imprisonment and a significant monetary fine.

Enhanced information sharing powers

Enhanced information sharing across investigative and regulatory agencies is also provided for under the Bill, to increase transparency and facilitate a more streamlined regulatory process. The list of competent authorities to which the CEA may disclose information, books or documents obtained in the course of an investigation would be extended to include the Charities Regulator, the Insolvency Service of Ireland, the Data Protection Commission, and the Competition and Consumer Protection Commission.

The big picture

The Bill represents a significant step towards aligning with international trends towards digitalisation and enhanced regulatory oversight. By embracing digital technologies, streamlining regulatory processes, and reinforcing enforcement mechanisms, the Bill aims to create a more flexible, transparent, and efficient business environment. Ultimately, the Bill’s success will depend on careful implementation, ongoing stakeholder engagement, and a commitment to balancing flexibility with accountability.

While this scheme for a Bill, if implemented, would make significant changes to company law, many recommendations of the Irish Company Law Review Group are still to be implemented. Further legislation is to be expected in this regard. The draft Irish legislation to give effect to the Corporate Sustainability Reporting Directive which must be implemented by July 2024 is also expected to be published shortly.

Neil Keenan is a member of the Irish Company Law Review Group.

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