On 9 April 2009 the Companies (Amendment) Bill 2009 was published to improve transparency and enhance the enforcement of company law and is expected to be implemented quickly.  It deals with three main issues: 

 

 
The Bill increases the powers of the Director of Corporate Enforcement (DCE) through a number of measures including:

    

The Bill increases the disclosure obligations on companies, in particular, companies that are “licensed banks”. Companies must disclose in their accounts all loans (transactions, arrangements or agreements) to directors and connected persons and it will be a criminal offence if the company (banking or non-banking) and every director does not comply with the disclosure obligations (although it is a defence if the director can prove he took all reasonable steps to secure compliance). 

  

The Bill also makes some amendments that relate solely to companies that are licensed banks and provides, in future, all loans above a minimum threshold of €3,174.35 to each individual director will be disclosed separately in the annual accounts and will include the maximum amount outstanding during the period covered by the accounts. The effect of these amendments is to require the disclosure in the annual accounts of loans made to persons connected with directors, where these loans are above the minimum threshold and are made on favourable terms. In this instance aggregate disclosure will continue to suffice but maximum amounts outstanding during the reporting period will also have to be disclosed. The amendments also recognise that licensed banks may be required to make similar or more detailed disclosure under rules imposed by the Financial Regulator.

 

 
The Bill amends some existing provisions relating to Irish registered non-resident companies to meet European Commission concerns that the current law is not compatible with the EC Treaty. The current requirement that at least one director of a company must be resident in the State is being changed to require residence in an EEA member state. The methods by which a company can prove that it has a real and continuous link with economic activities in the State are also being clarified. The existence of this link negates the requirement of having a resident director.

  

If you have any queries on the Bill please do not hesitate to contact John White. John is head of Corporate and Commercial and can be contacted on j.white@beauchamps.ie