Don’t Let Your Company Miss the CRO Deadline!

October 27, 2015

Tomorrow, 28 October 2015 is the deadline for Companies Office (CRO) B1 returns for companies with an accounts year-end date of 31 December 2014.

If your company has prepared (or has yet to prepare) 2014 accounts, you must ensure your return is filed by tomorrow – at the latest.

If you haven’t filed, and your company’s annual return date (ARD) is before 30 September 2015, sadly you have already missed the boat.

CRO Filing Deadline

The smart course of action is to file the return online using the CRO’s CORE web filing facility. This buys you a further 28 days (ie up to 25 November next) to submit the Annual Return signature page and accounts to the CRO.

You can use this four-week period to prepare your company accounts and bring its CRO affairs up to date.

Once prepared, you can submit your accounts in paper form, or upload a PDF copy via the CORE system.

If you need to file a return by tomorrow, and don’t have access to CORE, you should immediately get in touch with an accountant with CORE access, and authorise them to file on your behalf.

If you miss the deadline, your company will be faced with late filing fees (€100, plus €3 per day) and the (costly) loss of audit exemption for 2 years, unless you successfully apply to the District Court for an extension of time – which involves its own costs.

The Endless Red Tape of the New Companies Act

September 7, 2015

The Companies Act 2014 came into operation on 1 June 2015 and involves massive changes to Irish Company Law.

The Companies Office (CRO) have, in response, issued a mind-boggling total of 38 Information Leaflets, on a range of topics from Company Incorporations to Liquidations, Receiverships and Examinerships – everything from cradle to grave company-wise as it were.

Where should you start in coming to terms with your obligations under the new Act?

Companies Act 2014

If you’re a company director or secretary, I recommend you start with Information Leaflet No. 36, Requirements for Directors  and Information Leaflet No. 16 The Company Secretary respectively.

And if you’re responsible for preparing and filing CRO annual returns and accounts, you will need a detailed knowledge of Information Leaflet No. 23, Annual Return and Financial Statement Requirements including Audit Exemption.

Unfortunately, this latter document, in common with its title, is rather a mouthful, as it contains 41 pages of detailed content and some 22,300 words.

But it’s essential reading as it covers all the key rules governing:

  • annual returns – particularly the crucial Annual Return Date (ARD) filing deadline.
  • the essential disclosures required in annual accounts.
  • audit exemption
  • audit reports
  • procedures for correction of errors and revisions to accounts.
  • group companies.

There’s an awful lot here for anyone to get to grips with, and the task is all the more daunting for an already busy company director, secretary or manager.

I’ve noted previously noted how the new Act has clearly failed in its objective of simplifying company administration and cutting red tape.

The sad irony is that companies, along with their directors and secretaries, will now be more dependent on professional advisors than ever before.

Companies Act 2014 – A Nasty Shock for Small Company Directors

June 9, 2015

How would you feel if you were legally obliged to publish your earnings on the internet?

This is a question that many small company directors will soon be asking themselves as they digest the new Companies Act 2014, which came into effect on 1 June 2015.

Companies Act 2014 Privacy

For the first time, the new Act compels all companies to disclose Directors’ Remuneration (ie directors’ salaries and fees), in the annual Abridged Accounts to be filed with the Companies Office.

Once filed, any member of the public can access and download a copy of the accounts for €2.50.

This should not be a major issue for larger companies where the total Directors’ Remuneration figure is shared among several directors.

However, it will come as a nasty shock to family companies with one or two directors, most commonly husband & wife.  In such cases, the Directors’ Remuneration figure will clearly link to an identifiable individual or couple.

And once published, this information will be on the public record forever.

I’m amazed that the new Act provides no safeguards against the obvious privacy breach that this measure will entail for small company directors.

An exemption for companies with two or fewer directors would have been a reasonable solution. Yet no such exemption exists.

Will we soon see a stampede of small company owners fleeing the new disclosure rules and returning to sole trader status?

It would be ironic if the new Act, which was supposed to revolutionise company law and simplify company administration, ends up wrecking the entire concept of the small family company.

The New Companies Act 2014 – How Will It Affect Your Company?

June 2, 2015

Yesterday, June 1, the new Companies Act 2014 finally came into effect. It now applies to all existing and future limited companies.

As a company director, you may be wondering how the Act will affect you and your company.

Companies Act 2014 DAC LTD

Under the new Act, you have a choice of legal formats for your company, for a transition period of 18 months, up to 30 November 2016.

In the vast majority of cases, your choice is simple. Your company can convert under the new Act to a Private Company Limited by Shares (“LTD”), or convert to the new format Designated Activity Company (“DAC”).

The LTD is a simplified new company format which aims to reduce the administrative burden on private companies.

LTD companies:
• can now operate with just one director,
• can adopt a single-document constitution in place of the existing and rather legalistic Memorandum & Articles of Association, and
• don’t need to hold AGM’s.

The DAC option is more complex, and is intended for
• charities,
• management companies,
• companies limited by guarantee, and
• other companies which operate for a clearly-defined specific purpose.

Each DAC must have at least two directors and must hold an annual AGM.

There are set procedures for registering your company as a LTD, or as a DAC. These effectively involve adopting a new company constitution which must be filed with the Companies Office together with a special form.

If you do nothing, your company will automatically become an LTD once the 18-month transition period expires. Its Memorandum & Articles of Association will remain unchanged but will form part of an automatic company constitution to comply with the new Act.

Where a company becomes a LTD by default, it may end up being saddled with an outdated and unnecessarily complicated constitution.

This may cause difficulties and added expense (ie more legal fees) when dealing with banks and creditors in the future.

My advice? Face up to this challenge within the next 18 months, and convert your company to the appropriate format before it’s too late.

Coming Soon: Companies Office Full Online Filing

February 7, 2014

The Companies Registration Office (CRO) is ready to adopt new accounts filing rules that will allow companies to file their annual returns and accounts entirely online.

At present, it is possible to file a CRO annual return online, but this must also be supplemented by the submission of paper-format accounts and a separate signature page, each containing the directors’ original signatures.

CRO Companies Registration OfficeThis rather cumbersome procedure was necessary as the Companies Acts had never previously been updated to facillitate electronic filing.  The Companies (Miscellaneous Provisions) Act 2013 was passed into law late last year and is expected to come into effect in March.

This will allow company accounts to be filed with typed signatures. It will no longer be necessary for the accounts to have original handwritten signatures.

This means that they can be uploaded directly to the CRO website, avoiding the postal and other delays that current bedevil companies who are obliged to have their returns filed before their Annual Return Date deadline.

The CRO will in the coming weeks announce instructions for the new online filing facility.

The Companies Office Ezine announcing this change is here.

New Companies Bill a Fresh Dawn for Irish Business

January 2, 2013

The New Companies Bill will revolutionise Irish company law but needs to go further…

The Companies Bill 2012, published on 21 December by Enterprise Minister Richard Bruton, has been hailed as a “landmark reform” of company law. Its main aims are to reduce red tape,  to cut costs for business and  to make company law obligations easier to understand.

How Big Is It?

Minister Bruton has hailed the Bill as “the largest substantive piece of legislation in the history of the State”. It certainly is a massive piece of work.

The Bill itself contains 1,429 sections, stretching to a mind-boggling 1,136 pages while its Explanatory Memorandum is 402 pages long.  Its contents are based largely on the recommendations of the Company Law Review Group, a statutory expert body responsible for ensuring “that Ireland should have an efficient world-class company law infrastructure.”

The New Companies Bill will revolutionise company administation in Ireland but it needs to go further…

What’s In It?

The Bill consolidates the existing provisions of the Companies Acts 1963-2012 (14 separate pieces of legislation) and also includes a raft of new measures and reforms, relating to private companies limited by shares, PLCs, guarantee companies, and unlimited companies.

The key reforms for private companies are as follows:

  • It will be possible for a private company to have only one director. It will no longer be necessary to have a second director whose only role may be to sign forms and legal paperwork. This will avoid the problems that currently arise where, before they can form a company, a prospective director must recruit a spouse, relative or friend to act as a director, and oblige them to assume a wide range of duties & responsibilities.
  • Companies will no longer be required to hold an Annual General Meeting each year. This will be replaced by a written procedure to be completed by the director(s).
  • Each company will no longer need to draft detailed Articles of Association. It can instead have, by default, a one-document constitution.
  • Companies will no longer need to have an objects clause, setting out its main activities and what it to do. Instead they will now have the same legal capacity as individuals. This will avoid the problems that arise where an activity carried on by a  company is deemed to be illegal (ultra vires) because it is not listed in the company’s Memorandum & Articles of Association.  It will also simplify the procedures surrounding commercial borrowing as banks will no longer need to require a company to establish that it is legally empowered to borrow money for a proposed venture or activity.
  • A new “summary approval procedure” no longer require companies to obtain High Court approval for certain transactions, including capital reductions, and solvent windings up.
  • Private companies will now be able to engage in mergers and divisions.
  • Audit exemption will now be available for group companies, and to certain dormant companies that were previously ineligible.
  • Directors’ duties will be simplified.
  • Company law offences will now be streamlined and categorised by degree of seriousness.
  • SMEs will be able to apply to the Circuit Court for examinership.

What’s Happens Next?

The Bill will now pass through the Dáil and Seanad where it may be subject to a number of amendments. I presume this will take some months although it is safe to assume that it will become law sometime within 2013.

What’s The Verdict?

The publication of the Bill is a most welcome development although it will be interesting to see if all its proposals remain in place by the time it finally becomes law.

Some of its key provisions will revolutionise company administration in Ireland, especially the scrapping of the requirement for companies to have at least two directors, and the abolition of the need to have an ‘objects clause’, that previously complicated a company’s capacity to borrow.

On the other hand, there is no mention of any reform to some of the most glaring flaws in the current company law code, for example the unilateral and immediate loss of audit exemption for 2 years, where accounts are filed even 1 day late to the Companies Office (CRO).

If the Bill can be adapted in order to cover some of these anomalies, it could yet fulfill Minister Bruton’s dream of becoming a truly landmark reform of company law.

Festive Strikeoff for 145 Co-op & Friendly Societies?

December 7, 2012

In a new, get-tough policy, the Registrar of Friendly Societies has published a list of 145 societies which are to be removed from the Register on 21 December next.

The list includes a range of agricultural, community and other co-operatives, and registered friendly societies, all of which are governed by the Industrial and Provident Societies Acts, the Friendly Societies Acts, and the Trade Union Acts.

Registry of Friendly Societies regulates Agri & other co-operatives

The Registrar states that each of the societies concerned has “violated Section 14 of the Industrial and Provident Societies Act 1893”, by having “failed to send annual returns to the Registrar.”

If you are a member or officer of, or are otherwise responsible for, a Co-operative or Friendly Society, you should check the list carefully to ensure that your Society is not included.

You can check the current status of any registered Society online on the RFS website. Obviously, if your Society is facing removal from the Register, you should ensure that all outstanding returns are filed immediately.

For more information on the Registry of Friendly Societies, see their 2011 Annual Report.