Thursday, February 18, 2010

Director Responsibilities

When a company has limited liability status, its directors are not personally liable for its debts and obligations if it is wound up or goes into receivership.

A Dáil committee has called for a change in company law to ensure that directors who try to avoid paying certain types of taxes can be made personally liable. The report from the Public Accounts Committee focused on fiduciary taxes - those collected by companies and employers from staff and suppliers which should be passed on the State. These include PAYE and PRSI payments from workers and VAT. Revenue has had to write off €1 billion in such taxes in the past ten years.

Would this change in company law discourage new startups when we need them most? With one in five startups failing within a 5 year period, would this change in company law encourage more to work harder to make their business work? Its two fold! On one hand we need the startups, we need that "irish entrepreneurial spirit". On the other, we have too many companies who recklessly and/or purposely run up huge debts, while taking full advantage of their limited liability status.

If you have any comments or queries please use the comments or email link below.

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