Unlike last year’s big Companies Act 2014, which was driven by the statutory Company Law Review Group, the forthcoming new Companies Accounting Bill 2015 is being driven by Europe.
Its EU directive 2013/34/EU of 26th June 2013 on the annual financial statements and consolidated financial statements and replaces the existing Fourth Directive on annual accounts and the Seventh Directive on consolidated accounts.
However, it’s impossible to introduce over 1448 sections of new law in the Companies Act 2014 without some glitches appearing and the new Companies Bill 2015 will make a number of changes to the Big Act.
Small companies appear set to apply for audit exemption once their annual turnover is less than €12 million and balance sheet below €6 million.
The new Companies Accounting Bill 2015 is comprised of over 50 sections of new law and will change the citation to the Companies Act 2014 to 2015 or 2016!
Thousands of companies are late every year with the filing of their statutory returns and accounts with the CRO and unfortunately it’s a zero tolerance policy. Even if you’re late by just one day, unfortunately, you’ve lost your audit exemption for two years and from 1st June 2015 the companies registration office will no longer be engaging in correspondence with companies appealing the application of the late filing penalty arising from the late filing of the statutory annual return.
In future, companies who are late with their statutory filings will need to instruct their solicitors to bring an immediate application before the local District Court where the registered office of the company is situate pursuant to Section 343 of the new Companies Act 2014 which will permit the company make an application before a District Court Judge to make an order extending the time for the filing of the annual return. Accordingly, keeping the audit exemption and absolving the company of the late filing penalty.
Companies pay over in excess of €10 million each year in respect of late filing penalties and this should be a much utilised application in the local district court. However, it only applies in respect of annual returns filed after 1st June 2015.
We’ve been waiting for close on 15 years for the new Companies Act 2014 and no sooner than its commenced into law on Monday, 1st June 2015 that we will have yet again another new Companies Act, the proposed new Companies (Accounting) Act 2015, which may increase the audit exemption threshold in the case of the balance sheet total to €6 million and €12 million for net turnover ?
Why don’t we know more?
The fine detail and the exact figures for the new exemption thresholds are currently on the desk of the Minister for Jobs, Enterprise and Innovation and hopefully he will show his hand over the next few weeks as this important new legislation is required to be in place by July 2015 in accordance with the 2013 EU Directive.
Small companies have certainly got a lot bigger overnight and these new thresholds, if introduced at the high end of the EU recommendation will remove large numbers of companies from the audit requirement if they so elect to claim audit exemption under the new Companies Act 2014.
Sadly thereafter, the new Companies Act 2014 will no more be the single companies act that it was supposed to be for much longer. The new citation from July 2015 onwards is likely to be the Companies Acts 2014 to 2015!
With another big EU Directive in the pipeline that citation is almost guaranteed to change yet again next year with the advent of the new Companies (Auditing ) Bill 2015 that will create the new citation for the Companies Acts 2014 to 2016 and practitioners having to deal with three different companies acts in 2016!
It’s also very probable that issues will arise with regard to the practicalities of the new Companies Act 2014 and we can probably expect some possible amending legislation in 2017 also?
On Monday, 1st June 2014 all of the 17 Companies Acts 1963 to 2013 will be binned and in comes the brand-new 1448 sections of new law in the Companies Act 2014 and with it also comes 159 new CRO statutory forms.
Every form in the CRO is changing.
The new B1, Annual Return Form is on average 12 pages long and includes four full pages of small print detailed notes on the proper completion of the Form B1, which are required to be read in conjunction with the relevant sections of the Companies Act 2014.
There are six different tick box options with regard to the type of financial statements attached!
Old-timers used to filling in the old annual return Form 6A with the companies registration office will be completely mesmerised with the amount of detail required here with new entries to be completed for the dormant or small company audit exemption and filling in the details for the new Registered Person pursuant to Section 39 of the new 2014 Act will be a challenge for the uninitiated!
Not to worry, the new information leaflet from the CRO comprehensively deal is when all aspects of completing the annual return with regard to all your requirements, including audit exemption what this document alone stretches to nearly 40 pages!
The new form B42A is brand-new, this notifies the Registrar of Companies of the rectification of the register of members.
The new B10a is also brand-new and will be extremely useful for company secretaries changing directors residential address particulars in relation to multiple companies.
The new B1X permits the statutory notification of the voluntary revision of defective financial statements for the first time also.
Hopefully we should hear from the minister. Shortly exactly when he intends to sign the relevant statutory instruments giving effect to the creation of all these new statutory forms and confirms absolutely that everything is being commenced here on Monday, 1 June 2015.
This needs to be done sooner rather than later as without this very important statutory instrument old versions of the forms can only be used up to 1st June 2015 and the new versions of the statutory forms need to be in circulation well before that date so that they can be completed in preparation for filing after the commencement date.
Company Directors not compliant with their new duties and obligations under the new Companies Act 2014 better watch out for the new “Penalty Points” regime being introduced here in 2015.
It’s Section 850 of the Companies Act 2014 and it’s brand-new and may prove to be a very potent weapon in the arsenal of the Director of Corporate Enforcement when the new Companies Act 2014 is commenced into law here.
These new provisions will effectively allow the ODCE to issue “penalty points” to a company directors who have allowed their companies be struck off the register for nonfiling of the statutory annual returns with the companies registration office. Whilst not officially call a penalty points notice the ODCE will send a 21 day letter to directors of a typical dissolved unliquidated company that has been involuntarily struck off the register by the CRO and affording the director an opportunity of accepting a disqualification and or restriction undertaking, in order to avoid a court appearance where that person concerned agrees to sign an undertaking not to act in any way as a manager or director of the company as if they were subject to a disqualification or restriction order being given by a court.
This is a brand-new process introduced in accordance with the recommendation of the Company Law Review Group in its 2007 report following consideration of similar UK law provisions for company directors.
The ODCE will have locus standi to issue these disqualification or restriction undertaking letters where they have reasonable grounds for believing, for instance, that a company director may be guilty of an offence pursuant to section 160 of the Companies Act 1990 and the ODCE may deliver a notice to that person of that fact and inviting them to notify the ODCE of his or her willingness to give a disqualification undertaking for the proposed period. That period in all likelihood, maybe one or two years, as otherwise, that person may be faced with a higher sanction of a five-year disqualification ban if the matter goes before the courts.
That person then has 21 days within which to accept that invitation and the ODCE must not make an application to the court and the ODCE may even extend that 21 day deadline, which in all likelihood will be required to enable a typical director take appropriate advice on the consequences of facing a disqualification or restriction order.
In the event that the company director is willing to give the disqualification undertaking, the ODCE shall, file the appropriate companies registration office form with the Registrar of Companies setting out the prescribed particulars of the disqualification undertaking and the CRO will enter those particulars on the register of disqualified persons with the registry at Parnell Square in Dublin 1. The company director who has given the disqualification undertaking must not act as a director manager or other officer or be concerned or take part in the promotion, formation or management of any company for the period of that ban.
Company directors in 2015 better watch out that they ensure they don’t fall into this category of directors who will be targeted for this sanction under the new Companies Act 2014.
The Companies Bill 2012 finally finally becomes an Act after it was signed into law by the President on Tuesday 23rd December.
What happens next is a little bit of an anticlimax in that the Minister appears to have indicated that he intends to sign a commencement order for all of the provisions effective 1st June 2015.
The Companies Registration Office will need to finalise and introduce over 159 new CRO forms and start educating over 500,000 company directors and members of the different types of companies of the forthcoming changes and exactly what everybody will have to do when the new legislation becomes effective here mid 2015.
Also, the Rules Committee of the District and High Court will need to consider the new statutory provisions which will permit new applications in the District and High Court under the new provisions of the soon-to-be Companies Act 2014.
A little bit of a disappointment for the 15,000 or so companies limited by guarantee that may wish to avail of audit exemption, they will have to wait until June 2015 to avail of the new provisions.
Also disappointed will be thousands of accountants who may have of wished to avail of the new Section 343 District Court Application to restore a lost audit exemption.
Also on hold is the new single director concept which will not become available here until June 2015.
Unfortunately, the official title of the New Company Law, the Companies Act 2014 will probably be quite short lived in that a new Companies Amendment Act is at an advanced stage with regard to the introduction of new provisions providing for an increase in thresholds for a medium-size companies, introducing the concept of the new small company, “The Micro”, with reduced CRO filing requirements, the Companies Act 2014 will in future be referred to as the Companies Acts 2014 to 2015, and shortly thereafter as the Companies Acts 2014 to 2016 and no doubt there are other EU directives and regulations coming down the line, which will require further changes to company law, so lots of activity for the next five years…..