Firms face €500m bill in company law change

BUSINESSES could be hit with a €500 million bill to implement changes to the Companies’ Act requiring directors to say they are compliant with every aspect of the law.

In a submission to the Company Law Review Group (CLGR) on the proposed directors' compliance statements, the Institute of Chartered Accountants in Ireland (ICAI) said the introduction of the law would be major setback for companies, hitting competitiveness and increasing the regulatory burden on directors.

If compliance statements are introduced, it means directors will have to sign off on their accounts saying they have abided by all tax, environmental, regulatory and employment laws a move several industry groups say will cause a huge burden for small businesses.

The ICAI submission says the costs of implementing compliance statements could be as high as €500 million, with a large bank paying as much as €15 million.

Institute deputy director Aidan Lambe said Irish businesses were working in a totally different regulatory environment than that in place when the concept of directors' compliance statements was first conceived back in 2000.

"We believe now that the question must be asked as to what additional benefits will these requirements actually achieve."

The CLRG has been asked to report back to the Department of Enterprise, Trade and Employment on compliance statements by the end of July.