Chris Murray of Casey and Co. on the new Companies Act…
The Companies Act 2014 is replacing the Companies Acts 1963-2013 and will commence on June 1, 2015.
This is the largest piece of legislation Ireland has ever seen, comprising a total of 25 Parts (over 1440 sections) and 17 Schedules. The Act consolidates and reforms Irish Company Law and every company, director and shareholder will be affected and will have choices to make.
The new act is being introduced to:
• Modernise and simplify company law
• Reduce the cost of administration on business
• Ensure good corporate governance
What this means for your company:
The changes will affect every private limited company as all existing private companies limited by shares on the Company Register will be required to convert to either a LTD or DAC.
The default type will be LTD, however, members will have the option to convert to another type if desired.
Companies can begin to convert on 1 June 2015 and there is a transition period of 18 months in which to voluntarily convert. If conversion does not occur within the transition period then the company will automatically be converted to a LTD company.
All companies will be required to include the appropriate suffix at the end of their name.
This will require a formal change of name with CRO and will also require new letterhead and stationary (including company seal). Again where a company does not voluntarily change its name during the transition period CRO will automatically change the company name at the end of the period.
New forms will be issued by CRO for annual compliance and various reporting changes under the Act.
Key considerations
As with the introduction of any new legislative provisions consideration needs to be given to the impact on your business. We have outlined some of the key considerations below:
All companies will be affected by the Act and will have to change their type, consideration should be given to selecting the appropriate type for all companies including those within a group.
• Consideration as to who should have the power to bind the company going forward (change from 2 directors to 1 director).
• Consider opportunities in relation to expanded audit exemption provisions e.g. small groups may now be audit exempt.
• Groups may consider merger option to tidy up dormant companies with a group.
Ensure that directors’ loans are properly documented. Opportunity to review limited/unlimited company structures.
This is a complex piece of legislation and as with all major business decisions professional advice should be sought from your company accountant. More detailed information is available at www.caseyacc.com or at www.cro.ie
• Chris Murray is practice Manager at Casey & Co, Chartered Accountants & Registered Auditors located at 3 Day Place, Tralee. Chris oversees the auditing department to ensure company audits are carried out to the standard required by the various regulatory authorities, while also providing relevant and up to the minute taxation advice to our broad range of professional clients
