Coalition proposes law enabling small companies to restructure debt

Fri, Nov 23, 2012, 00:00

Fresh legislation proposed by the Government is set to make it easier for small businesses to restructure debts.

Minister for Enterprise Richard Bruton said he planned to amend the Companies Act to allow small private firms apply to the Circuit Court directly to have an examiner appointed.

Small firms are classed as those with less than 50 employees, with a balance sheet not exceeding €4.4 million or turnover of less than €8.8 million. To take advantage of the measures companies must satisfy two of the three conditions.

The changes will be made in the upcoming Companies Bill, to be published before the end of the year. It is expected to be enacted by the Oireachtas soon after its publication.

Mr Bruton said the Government recognised that there are many viable small enterprises in the sector that employed large numbers of people and had the potential to employ many more, but were facing “significant difficulties” because of legacy debts.

“That is why we committed to putting in place better structures to enable these businesses to more easily restructure their debts, while giving proper consideration to other businesses and individuals owed money by them,” he said.

“This will mean that more businesses will survive their current difficulties . . . in this hugely important part of the economy.”

Small firms employ about one-third of people in the Irish workforce. The Government has identified a number of areas where the sector could be supported, including new funding sources and a credit guarantee scheme.