Legal Brief: The Companies (Accounting) Act
The Companies (Accounting) Act 2017 (the “2017 Act”) came into force on the 09 June 2017 and it substantially amends, updates and supplements the Companies Act 2014 (the “Companies Act”).
It should be noted that the majority of the provisions of the 2017 Act came into force on that date with the new accounting requirements applying in respect of financial years which commence on or after 1 January 2018.
The 2017 Act results in a number of key changes for unlimited liability companies (“ULCs”). There is a change to the filing obligation. Under the Companies Act only “designated ULCs” are obliged to file financial statements in the Companies Registration Office (“CRO”) however the 2017 Act widens the parameters for classification as a “designated ULC”, as a result bringing significantly more ULCs within the filing regime. Prior to the 2017 Act, many ULCs were able to rely on an exemption from filing financial statements where their membership included either an unlimited liability entity incorporated in a jurisdiction outside the EEA or a natural person.
As a result “non- disclosure structures” were often designed using an Irish ULC. The revised criteria for a “designated ULC” will mean that ULCs which are owned or controlled (directly or indirectly) by a limited liability company will now fall within scope for filing obligations. ULCs who do not fall within the criteria of a “designated ULC” will continue to remain outside the filing regime.
The 2017 Act provides that unlimited companies which are holding companies of undertakings whose members have limited liability are “designated ULCs” but this provision will only take effect for financial years commencing on or after 1 January 2022.
The Companies Act requires that the registered name of all unlimited companies must end in “unlimited company” or “UC” (or the Irish equivalent). Previously, ULCs could apply for an exemption from the name change requirement. The Minister will no longer be able to grant such exemptions. ULCs currently availing of the exemption will remain unaffected, but will not be able to renew the exemption on expiry of the 5-year exempt period.
Under the Companies Act a foreign limited liability body corporate is required to register with the CRO where it has an operation in Ireland which would constitute a “branch”. The 2017 Act extends this obligation to any foreign unlimited liability entity that is a subsidiary of a limited liability body corporate. This provision of the 2017 Act has not yet come into force, but once it does it will have the effect of bringing more foreign companies within the branch filing regime.
Trackback from your site.