Corporate Law in Ireland
Companies in Ireland are subject to the Companies Acts 1963 to 2009 as well as European measures such as the Shareholders’ Rights Directive implemented by the Shareholders’ Rights (Directive 2007/36/EC) Regulations 2009 (SI No. 316 of 2009).
Corporate law is on the threshold of major reform and development as a consequence of the work of the Company Law Review Group under the chairmanship of Dr Tom Courtney. The reports of the Company Law Review Group led to the publication of the heads of a Companies Consolidation and Reform Bill in 2007.
On 30 May 2011, the 952 sections of Parts 1-15 of the long-awaited draft Companies Bill were published by the Department of Jobs, Enterprise and Innovation. This Bill will implement recommendations of the Company Law Review Group to consolidate, modernise and reform company law in Ireland and represents the culmination of more than a decade of policy review of Irish company law.
Much of the case law activity concerning companies and their directors in recent years has been as a consequence of the obligation of liquidators of insolvent companies to bring restriction applications under s.150 of the Companies Act 1990 against the directors pursuant to s.56 of the Company Law Enforcement 2001 unless relieved of the obligation by the Director of Corporate Enforcement. This has led to a corresponding decline in other proceedings such as reckless trading proceedings.
Derivative actions by minority shareholders on behalf of the company are rare as the derivative action has not been subject to statutory reform in Ireland unlike many other common law jurisdictions. Aggrieved minority shareholders are more likely to bring an oppression petition under s.205 of the Companies Act 1963.
There has been a recent explosion in examinership petitions being brought as companies seek to avail of this form of corporate rescue as well as an increase in liquidations.
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