Non-Resident Bond

The requirement to have at least one EEA-resident director does not apply to any company which for the time being holds a Sec 137 bond.

The bond is obtained from an insurance company to the value (not cost!) of €25,000. The bond lasts for a two year period. The bond provides that in the event of a failure by the company to pay:

• a fine imposed on the company in respect of an offence under the Companies Act 2014 committed by it, being an offence which is prosecutable by the Registrar of Companies and
• a fine imposed on the company in respect of an offence under section 1078 of the Taxes Consolidation Act 1997 and
• a penalty which it has been held liable to pay under section 1071 or 1073 of the Taxes Consolidation Act 1997,

there shall become payable under the bond a sum of money for the purpose of same being applied in discharge of the whole or part of the company’s liability in respect of any such fine or penalty

It should be noted that it is a criminal offence not to have at least one EEA-resident director of an Irish-registered company. The company and every officer of the company who is in default may be prosecuted in this regard. The Registrar of Companies is empowered to bring proceedings before the Dublin Metropolitan District Court for breach of the requirement to have an EEA-resident director.

When to Take Out the Bond

A period of two years is prescribed by the Companies Act 2014 (Bonding) Order 2015 as the minimum period of validity of the bond. This period may commence “not earlier than the occurrence of the event which gave rise to the requirement to effect a bond”. This bond should be renewed every two years or until such time as an EEA Director is appointed or a section 140 Real and Continuous Link certificate is obtained.

Furthermore, for new companies, the bond must be effective as at the date of incorporation. The effective date of the bond may not exceed four working days prior to the date of the company’s incorporation, exclusive of incorporation date.