Filing Requirements (1993 Regulations)
Pursuant to the European Communities (Accounts) Regulations 1993, certain unlimited companies are subject to the requirements of the Companies (Amendment) Act 1986 as to the preparation and filing of accounts.
The 1993 Regulations impose an accounts filing requirement on the following unlimited bodies:
- Unlimited companies and partnerships where all the members, who do not have a limit on their liability, are companies limited by shares or guarantee, or their equivalent if not covered by the law of the State, or any combination of these types of undertaking;
- Unlimited companies and partnerships where all the members, who do not have a limit on their liability are themselves unlimited companies or partnerships of the type referred to above, that are governed by the laws of an EU Member State or equivalent bodies governed by the laws of a Member State or any combination of these types of undertaking.
Where an unlimited company or partnership falls within either of the above two categories, the body is subject to the requirements of the 1986 Act as if it were a limited company.
Other unlimited companies (i.e. not coming within by the ambit of the 1993 Regulations)
Unlimited companies which do not come within the above two categories are not subject to the more stringent accounts requirements imposed by the Companies (Amendment) Act 1986. Rather, their obligations as to preparation of annual accounts are found in section 149 of the Companies Act 1963 and the Sixth Schedule to that Act.
The annual accounts of such an unlimited company must give a "true and fair view" of the company's financial position and profit or loss at the end of the financial year and must adopt the formats and follow the requirements set out in the Sixth Schedule to the Companies Act 1963.
Public: If the unlimited company is public, it comes within the ambit of section 128 of the 1963 Act and accordingly must annex to its annual return the following:
- balance sheet,
- profit and loss account (or income and expenditure account),
- directors' report,
- auditor's report.
There must be a general certification certifying the accounts and reports in total to be a true copy of the accounts and reports as laid before all members at the AGM and this must be signed by a director and the secretary.
Private: If the unlimited company is a private company, however, it has no obligation to file accounts with its annual return. Although accounts are not required to be filed, it should be noted that with effect from 17 May 2004, a private unlimited company is obliged to attach an auditor's report to its annual return on filing same with the CRO (section 128(6)-(6C) 1963 Act, inserted by section 47 Companies (Auditing and Accounting) Act 2003). An unlimited company is not necessarily exempt from the requirement to file accounts as certain unlimited companies and partnerships (including limited partnerships) are obliged to prepare accounts and deliver them to the CRO. (see above). Accounts are required from such entities by virtue of the European Communities (Accounts) Regulations 1993 (S.I. 396 of 1993).
Other partnerships (i.e. not coming within the ambit of the 1993 Regulations)
As these are not bodies corporate, they are not subject to the accounts filing requirements of the Companies Act 1963. Such partnerships have no obligation to file accounts.
If a company is unlimited and audit exempt, what do we attach instead of an audit report. Do we attach an accountant's report with the annual return?
- The above scenario cannot arise as an unlimited company cannot simultaneously be exempt from filing accounts and an audit exempt company - same is not possible under Irish company law.
- If a company is an unlimited company which is not required to file accounts with its annual return, it is not entitled to the audit exemption, as one of the essential qualifying conditions for the audit exemption pursuant to section 32(3)(a)(i) of the Companies (Amendment) (No.2) Act 1999 is that the company must be "a company to which the Act of 1986 applies" during the financial year in respect of which the company wishes to claim the audit exemption.
- The Companies (Amendment) Act 1986 does not apply to any unlimited company other than (a) an unlimited company, all of whose members are limited liability entities and (b) an unlimited company, where the shareholders of the unlimited liability member(s) of the unlimited company are all limited liability entities.
- Unlimited companies falling within (a) or (b) above are subject to the requirements of the 1986 Act by virtue of the EC (Accounts) Regulations 1993, and so have to attach accounts to their annual return as if they were a limited company. Such companies may qualify for the audit exemption, provided that they meet the other qualifying conditions laid down in Part III of the 1999 (No.2) Act.
- An unlimited company falling outside (a) or (b) above, however, is not subject to the 1986 Act, and, if a private company, does not have to attach accounts to its annual return. (A public unlimited company falling outside (a) or (b) above has to file accounts pursuant to the 1963 Act, section 128, but cannot be an audit exempt company as the 1986 Act does not apply to it.) Such an unlimited company is not eligible for the audit exemption as the 1986 Act does not apply to it.
- An unlimited company falling outside (a) or (b) above is accordingly required to have an auditor, and therefore there will be no practical difficulty in complying with the new requirement introduced by section 47 of the Companies (Auditing & Accounting) Act 2003 to attach an auditor's report to such company's annual return filed with CRO on or after 17 May 2004.
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