The Companies (Corporate Enforcement Authority) Bill 2021 (the Bill) establishes the Office of the Director of Corporate Enforcement (ODCE) as a standalone statutory body with a commission structure, to be called the Corporate Enforcement Authority (CEA).
The CEA will have substantially the same functions and powers that the Director of Corporate Enforcement has, with some modifications to reflect the new structure.
These functions include encouraging compliance with the Companies Act, investigating suspected offences and non-compliance under the Companies Act, prosecution of summary offences, referring indictable offences to the DPP and the exercise of certain supervisory functions with respect to liquidators and receivers
New Structure
The structure of the CEA is intended to enable the CEA to meet the demands of its remit through the introduction of the following measures to address resourcing:
- the Bill provides for up to three full time Members, one of whom will be appointed Chairperson of the CEA;
- the CEA will be able to appoint its own staff with the required skill and expertise it deems necessary to perform its functions instead of having staff assigned to it by the Department of Business, Enterprise and Innovation; and
- the Bill provides for the secondment of members of An Garda Síochána to the CEA.
Technical Amendments to Companies Act 2014
In addition, the Bill addresses some of the anomalies contained in the Companies Act 2014 and to give effect to a number of recommendations of the Company Law Review Group including:
- clarification as to the uses to which a company’s share premium account may be put;
- clarification that a commonly used structure in group reorganisations, in which a company transfers its undertaking to another company in consideration for a share issue to the transferring company’s shareholders, is lawful where the transferring company has distributable reserves that are at least equal to the value of the undertaking transferred;
- where a company acquires its own shares through a merger or division, those shares can be treated as treasury shares and may be cancelled or re-issued;
- a reduction of capital effected in accordance with the Act is not to be a distribution under the Act and does not require the rules on distributions to be followed (in addition to the processes to effect the capital reduction);
- the acquisition by an unlimited company of its own shares will not require the use of distributable reserves;
- a company secretary, who is a natural person, must be at least 18 years old; and
- a director will be required to provide the Companies Registration Office (the “CRO”) with the director’s PPSN (or equivalent ID) when presenting certain documents. This is intended to ensure that there is no confusion as to the identify of a director where common names are frequently encountered by the CRO.
New investigatory powers
There are recommendations that the CEA's powers would be supplemented in certain respects in the Bill itself to make the CEA more effective at investigating larger and more complex cases, particularly in the area of search and seizure. Proposed additional powers include the power to require the provision of passwords to electronic devices, to conduct surveillance and to permit ODCE officials to participate in interviews alongside members of An Garda Síochána. These will be the subject of separate legislative enactments.
Further information
The Bill is currently at the third stage of debate in the Dail and the Advocacy and Voice team in the Institute will monitor its progress through the Dail and Seanad When the Bill is enacted, which it is expected to be before the end of the year, the Institute’s own guidance will be reviewed and updated as required.
The text of the Bill, the associated Explanatory Memorandum and relevant press releases are available here:
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