The General Scheme of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 was published on 15th March 2024. The Bill makes some significant amendments to the Companies Act 2014 primarily relating to four areas of company law:
- corporate governance
- company law enforcement and supervision
- company law administration
- corporate insolvency
Some of the key changes in the Bill are:-
- One of the most significant changes is the replacement of the automatic loss of the audit exemption for a first late filing with the CRO with a graduated regime where a company may file late once in a 5 year period without the loss of audit exemption.
- Providing companies and industrial and provident societies with the option to hold fully virtual general meetings placing the temporary provisions on a permanent basis.
- Enhancing the powers of the Corporate Enforcement Authority, the Companies Registration Office and the Irish Auditing and Accounting Supervisory Authority.
When Will the Bill be passed?
The Bill is at General Scheme phase and it will be converted into a formal Bill. It then will proceed through five stages in the Houses of the Oireachtas and hopefully it will be passed and commenced in the coming months.
Main Provisions of the Bill
Electronic Filing Agent
- A person shall apply to the Registrar in the prescribed form for approval to act as an electronic filing agent and that person must be approved by the Registrar to act as an agent.
Registered Office Agent
- A company shall apply in the prescribed form to the Registrar to act as a registered office agent and must be approved by the Registrar to act as an agent.
- A registered office agent may notify both Registrar and the company that the agent will no longer provide a registered office address for that company. The Registrar will given notice to the directors and secretary to update the registered office address.
Electronic General Meetings
- Heads 8 to 12 of the Bill place the temporary provisions for holding member meetings electronically on a permanent basis giving companies the option to conduct general meetings fully virtual or hybrid general meetings.
- The Companies (Miscellaneous)(Covid-19) Act 2020 that introduced most of these temporary provisions is repealed and replaced by these provisions.
Summary Approval Procedure
- a copy of the declaration to be made in accordance with the summary approval procedure is delivered to the Registrar in the prescribed Currently, a company may submit a copy of a declaration to the Registrar in this case using the administrative Form SAP 203 -207
Probation Act does not apply for failure to file an annual return
- section 1(1) of the Probation of Offenders Act of 1907 does not apply to an offence where a company fails to file an annual return
Removal of the Automatic Loss of Audit Exemption
- Section 363(1) of the Principal Act is amended by the insertion of “, for the second or subsequent time within a period of 5 consecutive years,” after “deliver”
- Companies may file late once every 5 years with no loss of audit exemption. The Sec 343 District Court application appears to still be an option for companies that file late.
Obligation on Auditors
- A new obligation on Auditors to provide additional information and access to books and documents or make copies of the relevant books and documents under their control to the Corporate Enforcement Authority when requested.
Receivers
- To provide information on their fees to members or creditors within 7 days of a request
- An E9 form to be filed within 7 days upon cessation to act as Receiver
- Additional information to be provided on the E8 form when Receiver is being appointed
- Receivers to have similar entitlement to remuneration as it applies to liquidators and the Court has power to fix receiver remuneration similar to the liquidators provisions
Mergers
- The Bill clarifies that a DAC may also form part of a merger not just LTD company
- A group of subsidiary companies wholly owned by the same parent company may be facilitated in one transaction rather than in several transactions
SCARP
- Some technical amendments to the SCARP process
Liquidators
- Obligation on liquidators endures all the way through to the end of the process including any appeals
Register of Beneficial Owners
- Registrar of RBO may notify the Registrar of Companies of the failure of a company to make an RBO filing
- The CRO may strike off the company involuntarily if these filings have not been made
Involuntary Strike Off
- The Bill provides for 3 additional grounds for involuntary strike off:-
- failure to notify the Registrar of the situation of the registered office of a company on receipt of a notice from a registered office agent that the registered office of the company is no longer care of that agent
- no secretary of the company recorded on the Register of Companies
- Failure to file with the RBO
These additional grounds will not give rise to the disqualification of the directors
- The notice of involuntary strike off to be sent to directors and secretary by post and email if there is a failure to notify CRO of the change of registered office
Company Restoration
- Additional requirements to provide to CRO before a company is restored:-
- a company must also satisfy the Registrar that the company has a registered office and a secretary
- the Registrar must be in receipt of a letter of no objection from the Registrar of Beneficial Ownership
Corporate Enforcement Authority
- Additional powers and clarity regarding information gathering, information sharing between statutory bodies and additional surveillance powers
- Criminal Offence to delay, obstruct, impede, resist CEA officers or seconded staff of An Garda Síochána while performing their powers or duties
- Criminal offence for a person to utter or send threats to or in any way intimidate or menace a CEA officer (or any member of the family or civil partner of a CEA officer)
- Changes to legal professional privilege process and extend the time within which the Authority must apply to court for a determination
Verify Company Address
- The Registrar may require documents to verify a company’s address and may refuse to register a company or notice delivered by a company where the documents requested are not delivered
Gender Balance
- A company may provide information on its gender of its board of directors on a voluntary basis in the B1 annual return for statistical purposes only.
Industrial & Provident Societies
- place the temporary provisions for holding member meetings electronically on a permanent basis giving I&P’s the option to conduct general meetings fully virtual or hybrid general meetings.
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