Problems caused by unregistered companies to be tackled by new Bill

 

Specific proposals to deal with the problem of Irish-registered non-resident (IRNR) companies have been drawn up for inclusion in the forthcoming Companies (Amendment) Bill, according to the Minister for Science, Technology and Commerce, Mr Treacy. Launching the 1997 Companies Report from the Department of Enterprise, Trade and Employment, Mr Treacy said the existence of these companies was a growing concern, which must be tackled on three fronts.

These fronts were taxation, the application of the Criminal Justice Act 1994, and new company law requirements in relation to directorships and better enforcement/ strike-off procedures.

The Department of Justice is considering whether company formation agents can be brought within the scope of the money laundering provisions of the Criminal Justice Act, he added. "The implementation of workable solutions to the IRNR problem as quickly as possible is a high priority for this Government," he stressed.

Mr Treacy said that the Companies (Amendment Bill) will include measures allowing small, private, limited companies with turnover under £100,000 to drop the current requirement for audited accounts.

But he stressed that the directors of qualifying companies will still have to prepare and file annual accounts and lodge them with the Companies Registration Office. The Companies report shows that 19,023 new companies were registered last year, an 18 per cent rise on the previous year, while the number of liquidations fell by 10 per cent.

Of the new incorporations most were private companies with 17,345 registered. There was a 41 per cent increase in the number of public limited companies incorporated to 151. Only 3,132 companies were dissolved compared with 10,280 in 1996. On company investigations the report stated that three investigations - Celtic Helicopters and Garuda under section 19 of the Companies Act 1990 and Bula Resources under section 14 - started in 1997.

A further seven investigation had started up to June 1998, including the investigations into National Irish Bank and National Irish Bank Financial Services. Mr Treacy warned that the continuation of self-regulation in the accountancy profession was "an open question". He added that he awaited the outcome of the Institute of Chartered Accountants of Ireland inquiry into the conduct of members named in the McCracken Tribunal of Inquiry "with considerable interest".

Commenting on the Report, Mr Treacy highlighted the investigations of companies carried out. "Recent events have indicated a need to investigate possible breaches of company law and other legislation in a variety of firms. The Government will continue to be pro-active in this area and this underlines our determination to pursue potential wrongdoing." Fines imposed by the courts on directors of companies which failed to file returns increased to £52,460 from £8,630. Mr Treacy said he was concerned about the significant number of companies which failed to meet their basic statutory duty to file annual returns. The compliance rate for filing was only 13 per cent, down from 17 per cent - only 13 per cent of registered companies filed their accounts on time.

The report noted that 28,469 changes of directors were recorded. Investigations were carried out following 45 complaints concerning members of the accountancy profession. Two complaints of insider trading were referred to the Director of Public Prosecutions. Some 13 companies were notified to the Companies Registration Office by auditors as having inadequate books of account.

The Report lists the names of directors who are restricted or disqualified from acting as directors, directors convicted for failing to file returns and the companies notified as not having kept proper books of accounts.