The Doctine of Ultra Vires in Irish Company Law
Irish Company law as it currently stands is comprised of 35 pieces of legislation, in addition to a wealth of case law based on common law and equitable principles. This current system of company law is unmanageable and of little practical use to the average Irish company.
Although the sheer volume of law poses a major problem in itself, its somewhat haphazard layout causes most difficulty to business owners and managers. When a change or update is made to the law, rather than an act being repealed, an amendment act is passed, which means that the law applicable to a single topic may need to be read across a number of pieces of legislation. Irish Company law is not in any way user friendly.
This is not so much of a problem for major companies and PLC’s that have the resources and access to qualified lawyers to aid them in their understanding of the law. However, the vast majority, almost 89%, of Irish companies[1] are private limited companies, do not have such resources available to them.
In reality, the majority of private limited companies operate as quasi partnerships. Quasi-partnerships are similar to partnerships in that they are informally run, the shareholders and directors are often the same people, but they have been incorporated to avoid personal liability. A common feature of Irish business is the prevalence of companies that are family-run or set up among friends. In practice these companies operate in a manner where normal corporate rules are not strictly followed.
Although the proposed reforms do little to reduce the existing volume of legislation, they will clarify the law, allowing the lay-businessperson to access and understand it more easily.
Consolidating Irish company law into a single statutory code will benefit private limited companies as a simplified code will allow them to set up and conduct businesses in a more efficient and cost effective manner. This will have the knock on effect of encouraging entrepreneurship by
Although the sheer volume of law poses a major problem in itself, its somewhat haphazard layout causes most difficulty to business owners and managers. When a change or update is made to the law, rather than an act being repealed, an amendment act is passed, which means that the law applicable to a single topic may need to be read across a number of pieces of legislation. Irish Company law is not in any way user friendly.
This is not so much of a problem for major companies and PLC’s that have the resources and access to qualified lawyers to aid them in their understanding of the law. However, the vast majority, almost 89%, of Irish companies[1] are private limited companies, do not have such resources available to them.
In reality, the majority of private limited companies operate as quasi partnerships. Quasi-partnerships are similar to partnerships in that they are informally run, the shareholders and directors are often the same people, but they have been incorporated to avoid personal liability. A common feature of Irish business is the prevalence of companies that are family-run or set up among friends. In practice these companies operate in a manner where normal corporate rules are not strictly followed.
Although the proposed reforms do little to reduce the existing volume of legislation, they will clarify the law, allowing the lay-businessperson to access and understand it more easily.
Consolidating Irish company law into a single statutory code will benefit private limited companies as a simplified code will allow them to set up and conduct businesses in a more efficient and cost effective manner. This will have the knock on effect of encouraging entrepreneurship by