A Director of Corporate Enforcement office with responsibility for the enforcement of company law should be established to tackle a culture of non-compliance and companies' failure to file annual returns, a report prepared for the Minister for Enterprise, Trade and Employment recommends. The £2 million office should have a director with wide-ranging powers and be "independent in the discharge of his functions", like the Director of Consumer Affairs, the `Report of the Working Group on Company Law Compliance and Enforcement' states. The report, which has been seen by The Irish Times has been submitted to the Minister for Enterprise, Trade and Employment, Ms Harney. It says there is "a vital urgency" that the State has a first class system of company law.

It recommends an overhaul of company law, stating that indictable offences should be punishable by a maximum prison term of at least five years and maximum summary offences fines should be increased to £1,500.

It recommends giving legislative effect to an asset-freezing order, known as a Mareva injunction, which is currently at the discretion of the High Court.

The report was compiled by a working group established last August under the chairmanship of Mr Michael McDowell SC. Its purpose was to propose reforms which would maintain the State's standing "as a reputable place to do business".

The group concludes that compliance, enforcement and reform of company law were the three areas needing recommendations.

A Director of Corporate Enforcement, appointed at deputy secretary level, would report annually to the minister. The office would have 20 staff, including three accountants and three lawyers, and have a £1 million budget, with a further £1 million being available for legal costs. He or she should be able to impose on-the-spot fines for summary offences, assist in the preparation of cases for the Director of Public Prosecutions in the prosecution of indictable offences and seek injunctions against companies to secure compliance with the Companies Acts.

"The Minister for Enterprise, Trade and Employment should not retain any prosecution role for company law offences," the report states, although the minister's function in petitioning the court to appoint an inspector should be retained," it says.