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
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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
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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
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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
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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:
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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
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Companies
Company Directors
Company Secretaries
Members/Shareholders
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Auditors
Creditors
Liquidators
Receivers
Examiners
General Information Service
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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
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Consultation Service
Registration Service
Freedom of Information Service
Feedback Service
Sources of Information (1)
www . basis. ie
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Company Law
Employment Legislation
Environmental Legislation
Health and Safety Requirements
Others
Sources of Information (2)
www. odce .ie
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About the ODCE
ODCE Services
ODCE Publications/Statements
Legislation
Court Decisions
Sources of Information (3)
Consultation Papers
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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
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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)
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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?
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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
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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