1. Dublin Chamber of Commerce ‘Bright and Early’ Briefing 24 April 2002 “Your Company and the Law” Paul Appleby Director of Corporate Enforcement

2. 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?

3. 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

4. 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

5. 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

6. 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

7. 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)

8. 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

9. 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

10. ODCE Role and Powers (1) Compliance Role  Public presentations  Information strategies  Printed media  Electronic media  Engaging with professional bodies  Other Initiatives

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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)

19. Compliance Information Service  Companies  Company Directors  Company Secretaries  Members/Shareholders  Auditors  Creditors  Liquidators  Receivers  Examiners

20. General Information Service  Introduction to the ODCE  Annual Reports  Presentations/Statements  Legislative Changes  Information Request Facility

21. 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

22. Other ODCE Services  Consultation Service  Registration Service  Freedom of Information Service  Feedback Service

23. Sources of Information (1) www. basis. ie  Company Law  Employment Legislation  Environmental Legislation  Health and Safety Requirements  Others

24. Sources of Information (2) www. odce.ie  About the ODCE  ODCE Services  ODCE Publications/Statements  Legislation  Court Decisions

25. 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

26. Sources of Information (4) Decision Notices  On Consultation Papers  On Exemptions from applying for Restriction Court Decisions  Prosecutions  Company Investigations  Restrictions/Disqualifications

27. Sources of Information (5) www. cro. ie  Information  Doing Business with the CRO  CRO Fees  Search  Free Public Search Facility  Registered Client Search Facility

28. 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

29. 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)

30. 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

31. Where are we heading? (3) Elements of a Compliant Environment  Simplified Legislation/Regulation  Accessible Compliance Information  Good Reporting of Non-Compliance  Effective Enforcement Arrangements

32. 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