Dublin Chamber of Commerce ‘Bright and Early’ Briefing 24 April 2002 “Your Company and the...
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Transcript of Dublin Chamber of Commerce ‘Bright and Early’ Briefing 24 April 2002 “Your Company and the...
Dublin Chamber of Commerce‘Bright and Early’ Briefing
24 April 2002
“Your Company and the Law”
Paul Appleby
Director of Corporate Enforcement
Outline of Presentation
What are the Responsibilities of Directors? ODCE – Why has it been established? ODCE Role – what is it doing? ODCE Services – what can we do for you? Where can you get company law information? Conclusion – where are we heading?
Directors’ Responsibilities (1)
The Company – a Separate Legal Person General Duties of Directors
Act in the Company’s (not Personal) Interest Act with Due Care, Skill and Diligence
Defined Legal Obligations/Constraints Disclosure Requirements
Directors’ Responsibilities (2)Company Documents to be kept,
updated and made available Register of Members Register of Directors and Secretary Register of Directors’/Secretary’s interests Register of debenture holders Directors’ Service Contracts Minute Books
Directors’ Responsibilities (3)
Basic Operational Obligations Keeping proper books of account Holding the annual general meeting (AGM) Circulating to members before every AGM a
signed copy of the balance sheet, profit and loss account, director's and auditor's report
Holding an extraordinary general meeting when circumstances require
Directors’ Responsibilities (4)
General Filing Obligations Change in constitution of company Change in registered office Change of directors/secretary Increase in Nominal/Issued Capital Annual return Mortgages and charges
Bridging the Compliance Gap (1) “Irish company law has been characterised by a
culture of non-compliance…” “Enforcement of the law in relation to non-registration
offences has been very rare and wholly unpredictable…”
(Offenders) “have little reason to fear detection or prosecution…”
“…the sound of the enforcer’s footsteps on the beat is simply never heard…”
- McDowell Working Group Report (1998)
Bridging the Compliance Gap (2)
Approach of the McDowell Group Codify and Simplify Company Law Extend/Improve Enforcement Measures Establish a Dedicated Enforcement Office Resource the Companies Registration
Office Role
Bridging the Compliance Gap (3)
Company Law Enforcement Act Enforcement of filing obligations stays with the
Registrar of Companies New Office of Corporate Enforcement will deal
with Companies Acts in general Measures to streamline enforcement Company Law Review Group is being set up on a
statutory basis
ODCE Role and Powers (1)
Compliance Role Public presentations Information strategies
Printed media Electronic media
Engaging with professional bodies Other Initiatives
ODCE Role and Powers (2)
Fact-finding company investigations Apply to appoint High Court Inspector(s) to
conduct wide-ranging company inquiry Appoint Inspector directly to establish interest
in company shares/debentures Examine a company’s books/documents
Require production of the books Demand explanations
ODCE Role and Powers (3)
Detected Breaches of the Acts Seek to impose an administrative fine Initiate a summary prosecution Refer the case to the DPP for decision
ODCE Role and Powers (4)Insolvent Companies
Seek Court order to inspect the books Seek to have Court examine directors, etc. Seek Court order to search for and acquire
property, etc. Seek arrest warrant Seek Court assessment of damages Seek Asset-Freezing Order
ODCE Role and Powers (5)
Restriction of Company Officers Liquidators of insolvent companies must apply
to Court to restrict directors, unless exempted by ODCE
ODCE can directly seek Court declaration of restriction
Nominal value limits increased to £50K and £250K in private and public companies
ODCE Role and Powers (6)
Disqualification of Company Officers ODCE can directly seek Court order of
disqualification Specific criterion is a person guilty of two or
more offences of failing to keep proper books Another criterion is a person in persistent
default of the relevant requirements
ODCE Role and Powers (7)
Liquidations and Receiverships Will obtain copy of notice of appointment of
liquidator/receiver from the Registrar May require production of his/her books May seek explanations of conduct Receiver will require to state if company is
solvent at the close of the receivership
ODCE Role and Powers (8)
Other Measures Mandatory reporting of suspected breaches of
company law to ODCE by auditors, liquidators, professional bodies
Regulation of undischarged bankrupts acting as company directors
Seek other Court orders/injunctions Increase in penalty provisions
Timetable for Commencement
Many Provisions in Effect, including: Company Law Prosecutions Restrictions and Disqualifications A number of CRO Enforcement Measures Company Investigations
Outstanding Provisions include: Winding up and Insolvency (possibly 1 June)
Compliance Information Service
Companies Company Directors Company Secretaries Members/Shareholders
Auditors Creditors Liquidators Receivers Examiners
General Information Service
Introduction to the ODCE Annual Reports Presentations/Statements Legislative Changes Information Request Facility
Complaints Facility
Complaints about Companies Act Breaches Auditor/Liquidator/Professional Body
Reports on Indictable Offences CRO Information
Failure to keep Proper Books
Information-Sharing Arrangements
Other ODCE Services
Consultation Service Registration Service Freedom of Information Service Feedback Service
Sources of Information (1)
www . basis. ie Company Law Employment Legislation Environmental Legislation Health and Safety Requirements Others
Sources of Information (2)
www. odce .ie About the ODCE ODCE Services ODCE Publications/Statements Legislation Court Decisions
Sources of Information (3)
Consultation Papers No. 1 - Duties and Powers of Directors, etc. No. 2 – Auditor Reports of Indictable Offences No. 3 – Insolvent Companies in Liquidation No. 4 – Unliquidated Insolvent Companies
Sources of Information (4)
Decision Notices On Consultation Papers On Exemptions from applying for Restriction
Court Decisions Prosecutions Company Investigations Restrictions/Disqualifications
Sources of Information (5)www. cro. ie
Information Doing Business with the CRO CRO Fees
Search Free Public Search Facility Registered Client Search Facility
Sources of Information (6)
www. clrg. org About the Company Law Review Group Text of the CLRG’s First Report (195 changes) Making Comments on the First Report CLRG’s Second Work Programme (7 areas) Submissions on the New Work Programme
Where are we heading? (1)
McDowell Working Group Report (1998) Two Companies Acts (1999) Auditing Review Group Report (2000) Company Law Enforcement Act (2001) Establishment of the ODCE (2001) Active Company Law Review Group (2000-2002) Publication of draft IAASA Bill Heads (2002)
Where are we heading? (2)
Why Bother with Compliance? Our Reputation as a Place to do Business Our Need to have an Ordered Society Our Need to minimise Business Risks Our Need for Sound Competitive Enterprise Protection of Business and Government
Revenue
Where are we heading? (3)
Elements of a Compliant Environment Simplified Legislation/Regulation Accessible Compliance Information Good Reporting of Non-Compliance Effective Enforcement Arrangements
Where are we heading? (4)
Key Elements of ODCE Strategy Provide Informative Non-Technical
Material on People’s Legal Obligations under Company Law
Help People to articulate their Concerns about Suspected Company Law Malpractice
Bring to Account those who breach the Law