Top 10 Company Law Points for 2020

Every January we highlight 10 company secretarial and company law points for directors and practitioners to consider and the 2020 list is below.

  1. RBO Filings
  2. Filing Annual Return
  3. Audit Exemption
  4. District Court Applications
  5. New CORE System
  6. Company Law Impact of Brexit
  7. Sole Director & Sole Shareholder Company
  8. Selling a Company
  9. Capping Value in a Company
  10. Converting to Unlimited

RBO Filings

I think everyone was RBO’d out by Christmas and want to move on from it however there are still a few issues with the RBO that practitioners should consider:-

  • If you or your client has not filed or completed a filing this must be done immediately as these are the companies the Registrar will focus on for enforcement proceedings
  • Review the information filed in the RBO to ensure it is correct as many companies were in a panic to file before the deadline as a result they may have filed information that was incorrect, incomplete or did not understand what the definition of a beneficial owners is in accordance with the Regulations
  • Establish an internal register which is one of the key requirements of the Regulations and something that appears to be overlooked by some companies
  • Keep the RBO up to date for any changes in the beneficial owners which may also include the Senior Management Officers

Our RBO templates include an internal beneficial ownership register click here for more information.

Filing Annual Returns

Filing annual returns and financial statements is still the most important job for a company secretary. Companies miss the annual return filing deadline for many reasons and the following points should be considered to avoid missing these deadlines:-

  • File annual returns early if possible
  • Make sure the originally signed signature page is filed before the deadline
  • The financial statements must be uploaded before the signature page is filed in the CRO
  • If the annual return is rejected by CRO who will notify the presenter by email and if you receive the 14 days grace (not available in some instances), a new filing must be made, the annual return signature page signed and the financial statements uploaded again, otherwise the annual return will be late
  • Use Express Post NOT Registered Post when posting signature pages to the CRO

Audit Exemption

The biggest driver for 89% of companies filing on time is audit exemption. The recent changes in audit exemption, where a company that is late may file audit exempt financial statements with the late annual return, are welcomed however it has created some new challenges

  • If the annual return is late audit exempt financial statements may still be filed and the company must have the following two financial years audited
  • If the annual return signature page is delayed in the post and is received after the filing deadline (now late) but there is enough money in the presenter’s CRO account, the annual return will be processed and you may not be notified that the return was received late. The company or presenter might not be aware it has lost audit exemption for the following two financial years.

So always check that the annual return has been received on time before closing the filing!

District Court Applications

The Sec 343 District Court Applications for companies that have missed a filing deadline is still available. As mentioned above there are many reasons for companies missing the filing deadline and the cost and imposition of an audit may cause huge difficultly for an SME company. When making an application the company must set out and have supporting evidence of the reason why the company has missed the filing deadline. The Company may find it very difficult to obtain if it has filed late in the previous 5 years.

A Company may only make an application if the annual return has not yet been filed if the annual return has already been filed in the CRO it will not be able to apply to the District Court.

New CORE System

We mentioned last January that the CRO are to introduce a new CORE system however the launch was delayed. We understand the new CORE system is due to go live in Q2 2020. The new system will greatly improve the functionality of CORE and allow a complete electronic filing of annual returns including PDF signature pages. We will keep you updated on the when the new system is due to be launched.

Company Law Impact of Brexit

With the Brexit date of 31 January 2020 the impact of Brexit is back on the agenda for companies both in Ireland and the UK. The following are the company law points to consider:-

  • Each company require at least one EEA resident director – options
    • Appoint a new EEA director
    • a bond can be obtained from an insurance company which would pay fines or penalties incurred under Irish tax or company law up to the value of €25,000 over a two year period
    • Obtain a certificate from the Irish Registrar of Companies to state that the company has a real and continuous link with an economic activity being carried out in Ireland on the basis of the Irish Revenue Commissioners being satisfied that this is the case
  • Sec 357 Guarantee
    • Sec 357 Guarantee is only available where an Irish company is a subsidiary undertaking of a holding undertaking which is established under the laws of an EEA country
  • Sec 80 stamp duty relief only available for EEA companies
  • Restriction on changing financial year end when aligning with group companies
  • Change of branch registration from EEA to Non-EEA

Sole Director & Sole Shareholder Company

The Sole Director & Sole Shareholder Company are still very common and before this type of company is set up, the sole director/shareholder should put a will in place to provide for the transmission of their shares in the company in the event of their death. The constitution may also include provisions regarding the transmission of shares and the appointment of a new director to avoid any difficulties in the future.

Selling a Company

With the economy going well despite last year’s fears over Brexit, we are seeing an increase in companies being bought and sold. So in advance of selling a company, the company should do its own due diligence on the legal position of the company and the following points considered

  • A detailed review of the statutory register and RBO of the company to ensure the register is fully updated to reflect changes in the Company since date of incorporation
  • Review the minute book to ensure all minutes are signed and inserted
  • Review the constitution to ensure it is updated for the Companies Act 2014

Capping Value in a Company

Another example of companies doing well is where the shareholders of a company want to introduce new shareholders possibly employees or someone bringing particularly expertise into the Company and the shareholders want to cap the value of the company now. This may be achieved by way of using different share classes. Its important appropriate tax and legal advice is obtained and a shareholders agreement should be put in place.

Converting to Unlimited

We have seen an increase in the number of companies converting to unlimited after the slowdown when the new definition of a designated unlimited company in 2017. If you or your client are considering converting to unlimited the following points should be considered:

  • If the company is looking to obtain the exemption from the requirement to file financial statements in the CRO, then careful consideration of the definition of a designated unlimited company should be given to ensure the company would be entitled to the exemption
  • The timing of making the application to re-register as unlimited is very important. A company has 3 months after its filing deadline to make an application to re-register as an unlimited company or file financial statements no more than 3 months old with the application.

Otherwise it must file its next set of financial statements first before making the application. These might be the set of financial statements the company is hoping to keep private so its important to consider the timing as early as possible.

CLS are on hand if you require assistance with company law queries, drafting company secretarial documentation or company formations and for more information contact any one of the team on 059 9186776 or by email.


Note: The content of this article is provided for information purposes only and does not constitute legal or other advice.

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