The Companies Act 2014 commenced on 1st June 2015 and this Act and has replaced the Companies Acts 1963-2013. As well as consolidation, there are some innovations to simplify procedures and streamline certain activities in the new Act. It introduces new company models and the new law affects all companies that are already on the register. The one form each company is required to complete each year is the form B1 - Annual Return document. There are some changes included in the form. There are a number of changes in the form B1. Link to Forms page.
The new forms have the logo on the left, the submission code on the right hand side.
The first page of the B1 includes a tickbox for the form B73 (notice of change of ARD). Changes to the text of the form are highlighted in red.
Audit Exemption change
Audit exemption rules have been changed in the new Act. A company only has to meet two of the three requirements in order to qualify as a small company.
Dormant company exemption
A new form of audit exemption is available in the Act - an exemption for dormant companies. Section 365 Companies Act 2014. A dormant company is one where in respect of the year in question, the company has no significant accounting transaction and its assets and liabilities comprise only permitted assets and liabilities. This is different from the audit exemption provided for under section 358 in that it does not apply only to small companies. There is no requirement where the company is dormant for a determination based on size to come into play.
The fact that the exemption is being claimed under this section must be stated in the Directors statement as part of the balance sheet (as required under section 335) and the statement must include the following paragraph:
“the company is availing itself of the audit exemption (and the exemption shall be expressed to be ‘the exemption provided for by Chapter 16 of Part 6 of the Companies Act 2014’;
the company is availing itself of the exemption on the grounds that the conditions specified in section 365(2) is satisfied;”.
(Permitted assets and liabilities are investments in shares of, and amounts due to or from, other group undertakings).
A significant accounting transaction means a transaction that is required to be entered in the company’s accounting records under section 281/282 Companies Act 2014.
The Dormant Company Audit exemption is different to Audit Exemption (under section 360) in that section 334 Companies Act 2014 (Right of members -10% of the members can object to a company applying for the ordinary Audit Exemption) does not apply to Dormant Companies.
Filing Financial Statements
If the return is filed with a form B73, or it is a B1 filed for the first (six months) return of the company, no financial statements need be attached and no financial year details need be provided. Otherwise insert the date of the start and end of the financial year covered by the financial statements approved by the board and signed by two directors for the relevant year (where the company has two or more directors) or by the director (where the company is a LTD company and has a sole director). Pursuant to s347, Companies Act, 2014, the financial statements must be made up to a date not earlier by more than nine months than the date to which the return is made up.
Under s.288(1) Companies Act 2014, a company's first financial year is the period beginning with the date of its incorporation and ending no more than 18 months after that date. Each subsequent financial year begins the day immediately after its previous financial year end and continues for 12 months (or 7 days shorter or longer than 12 months). A company may, once in every five years, by filing a form B83 with the Registrar, apply to alter its current or its previous financial year end date, which will then become its financial year end date for the future. In the case of a company’s first full annual return with financial statements (ie normally 18 months after incorporation) the financial statements may be in respect of a financial year ending on any date between nine months prior to the ARD and the ARD itself, but they must not exceed the period of eighteen months since incorporation. With subsequent annual returns, the financial statements are required to cover the period since the last set of financial statements filed with the CRO.
Certain unlimited companies (ULCs) which are covered by s.1274 Companies Act 2014 are required to prepare financial statements and annex them to their annual return. Unlimited companies (ULCs) which are not covered by section 1274 and come under s.1277 of the CA 2014 are required to annex an auditor’s report to its annual return unless it is entitled to and has availed itself of the small company audit exemption or the dormant company audit exemption (Chapters 15 & 16 of Part 6 of the Act).
Under s.996 and s.1220, Companies Act 2014 respectively, Designated Activity Companies (DACs) and Companies Limited by Guarantee (CLGs) which have been formed for charitable purposes, and which have been granted an exemption by the Charities Regulatory Authority, are not required to attach financial statements to their annual return. However they are required to annex a special auditors report to the return unless they are entitled to and have availed themselves of the small company audit exemption or the dormant company audit exemption (Chapters 15 & 16 Part 6 Companies Act 2014) in which case they do not need to file the special auditors report.
Change to Key Accounting Terms in new Act
Part 6 refers to "financial statements" and "accounting records", where legislation previously referred respectively to "accounts" and "books of account". This reduces the risk of confusion arising from the use in practice of "accounts" to refer both to "financial statements" and "accounting records". In defining the term "financial year", Chapter 3 of Part 6 brings together information previously scattered between various pieces of legislation. Chapter 13 of Part 6 consolidates the provisions defining the "annual return date" and clarifies the language surrounding its alteration.
A company email address is required for notices to issue from the CRO. The Office also issues e-certificates for companies where they re-register or convert. Conversion is a requirement on all private limited by shares companies under the Act. Under the new Act, all currently registered private limited by shares companies will operate under the Designated Activity Company legislation until such time as these companies convert. See information on conversion process. There is a Transition Period of 18 months for companies to convert.
Annual General Meeting
A Private Limited by Shares company under Part 2 of the Act - the simplified LTD company type may, where it meets certain requirements, avoid holding an AGM. Such companies need not hold an AGM where all the members entitled to attend and vote at the AGM sign beforehand a written resolution:
See section 175 of the new Act.
Company Officers must be over 18
Under section 149 of the new Companies Act, more information regarding the secretary is required. A date of birth is necessary where the secretary is an individual. Under the new Act, all directors and secretaries must be over the age of eighteen. Where the secretary is a body corporate, the register and registration number of the body corporate must be stated. If anyone stands as director of a company and is still under eighteen, the appointment will be void on the date of commencement. It is also possible for the redaction of a company officer's residential address. This applies to new appointments only and not to any address already on the register.
The share capital page has been combined with the list of members page. Where a company is incorporating using the simplified LTD model - a private company limited by shares under Part 2 Companies Act - it is possible for the company to have no authorised share capital to be stated. See example of LTD constitution.
On the page stating the list of past and present members, the information required has not changed. There is a box now for stating the number of shares held at the date of the return. The third box should be used to show the number of shares held at the date of the last return. Box four to show the number transferred . Box five to indicate to whom the shares were transferred and box six to show the remaining shareholding after the transfer has been completed if any.
Section 39 - Registered Person - Binding a company
The registered person area on the form will not have to be completed by most companies. A registered person under section 39 Companies Bill is a person authorised by the company to bind the company generally.
Under section 39 Companies Act 2014, the Board of Directors of a company will be able to authorise any person as a person entitled to bind the company. This is to save third parties having to look up the Objects of a company (which no longer exist in the case of a LTD company registered under Part 2 of the CA 2014) or refer to Board Minutes to see who is authorised to bind the company. If a Board of Directors wishes to give any person (eg CEO or MD) power to bind the company generally (not just in specific transactions), it can register that person with the CRO. A sole director of a LTD company does not need to be authorised as s.40(1) CA 2014 clarifies that the Board of Directors has authority to bind and a sole director is the Board. Notification to the CRO of authorisation and de-authorisation of a Registered Person can be effected using Form B46. Where "not applicable" or "none" is appropriate, please state this.
Certification of Financial Statements
There is a general certification included in the B1 regarding the financial statements.
Some significant changes introduced in the new Act
Offences under new Act
The Act provides for a four-fold categorisation of offences into Categories 1 to 4. Throughout the Act, offences are, as created, categorised as attracting a particular category of penalty.
In Chapter 7 of Part 14, those penalties are set out:
Copyright 2016 Public Office Address: Companies Registration Office, Parnell House, 14 Parnell Square, Dublin 1, Eircode: D01 E6W8. DX Number: 145001. Phone: +(353 1) 8045200
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