Government approval has been secured for the priority drafting of the Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021.
The Bill amends theCompanies Act 2014 to provide for a new and speedier dedicated rescue process for small and micro companies in order to protect employment.
The Bill is likely to be enacted before the Dáil's summer recess to dovetail with tapering-off of Government employment support payments.
The Bill widens access to an alternative framework, which incorporates key elements of the existing examinership model in an administrative context.
The process is different to examinership, which is run through the High Court, and will instead be an administrative process of engagement with creditors to which a company director can apply.
After a period of consultation, a proposal is made which can be accepted or rejected by the creditors.
Minister of State for Trade Robert Troy has said a more cost-effective and faster administrative process will be put in place before the summer to enable "viable, vulnerable" businesses to restructure.
Small and micro businesses make up 90% of companies registered with the Companies Registration Office and employ a total of 780,000 people.
A full 78% of these firms operate in sectors which have been particularly challenged by the pandemic such as retail, hospitality and the service industry, the minister said.
Revenue was involved in early drafting the Bill and will be able to avail of an "opt-out" clause in the process so as to protect taxpayers' money, the minister added.
This means Revenue could refuse to allow a company with a chequered history to write-off debts.
Debts related to rents or lease arrangements would fall under the repudiation element of the process, which must happen in parallel via the courts, the minister added.