At least one of the directors of a company in Ireland is required to be resident in a member State of the European Economic Area (EEA). However having an EEA-resident alternate director does not satisfy this requirement. This will become an important requirement post Brexit.

The European Economic Area member States are:

Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.

The requirement to have a EEA Resident Director does not apply to any company that for the time being holds a bond or a section 140 Real and Continuous Link certificate.

The requirement to have at least one EEA-resident director does not apply to any company which for the time being holds a bond, in the prescribed form, in force to the value of €25,000. This 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 committed by it under the Companies Act 2014 (does not include paying late filing penalties) and/or
  • a fine imposed on the company in respect of an offence committed by it under section 1078 Taxes Consolidation Act 1997

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.

How Can CLS Help

We can arrange for a bond to be obtained for new or existing companies please contact one of the team on 059 9186776 or send us an email.

 

Please Note:

Our CLS Insights aims to bring you practical information and news on Company Law and Company Secretarial. We cover the topics that matter to your business and give practical tips and also the benefit our experiences. Please remember this article is a guide and legal advice should always be obtained. If you have any queries please contact one of the team and we would be happy to help.

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