Archive before July 2018
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Thinking of becoming a Director?
Think before you leap!
Who thinks about becoming a Director
Running your own business may leave you without any choice but, to become a Director. For some it is perceived as a gentle wind-down towards retirement. For others it is a way of giving something back perhaps by becoming a Director of a State Board. Everyone has their own individual reasons on why they may wish to become a Director but, ensuring each person has the ability to integrate the additional time commitments into their existing business or personal lifestyle is an essential first step.
What do you hope to achieve by becoming a Director?
Becoming a Director is no longer the sinecure it once was as Legislators (in Ireland and EU) aim to increase the personal liability of individual Directors, and companies themselves recognise the value of a good Board, and achieving sound corporate governance. Wanting to become a Director in the expectation of a relatively benign wind-down at retirement is a non-starter.
A prospective Director should question their motives, and abilities before going further.
- Are you willing to take on the onerous personal responsibilities, and obligations of a director?
- Do you have the relevant skill set, and if not, are you willing to upskill or train as required?
- Can you envisage yourself as an active member of a Board?
- Do you know anyone currently acting as a Director who could give you a portrayal of how they find the role in real life?
Acting as a Director will invariably include moments of frustration and irritation but, so does anything in life, including life! Learning about a company from the inside out, making a positive impact on the dynamics of a company, interacting with your peers, the satisfaction of working with a well-balanced Board, and enthusiastic Management Team can make it all worthwhile.
Get it right and you will feel a million dollars knowing you are making a real and positive difference to a company, and its future. How many of us get such an opportunity to have such a tangible effect in the business world today?
Are you up to take such a leap?
The Charities Regulatory Authority recently published a guide for Charities which describes the limitations of a charity’s promotion of political causes.
The guide states that the promotion of a political cause is acceptable on condition that the promotion directly relates to the advancement of the charitable purpose of the Charity.
It is recognised that on occasion, Charities need to engage in activities such as influencing policy or advocating change to legislation to support their charitable purpose. However, the promotion cannot be contrary to the charity’s constitution nor can the charity support a political candidate or a political party.
The guide provides clear examples to help Charity Trustees understand the kinds of actions that may or may not be permitted.
A political speaker at a charitable event is permitted on condition that it is the event and not the politician is being promoted.
Another example of a permitted activity is where a charity organises a march to Leinster House to encourage additional funding for integrated projects which advances the charity’s charitable funding. This is permitted because the purpose of the march is to get more funding to promote good community relations, which in turn advances the charity’s charitable purpose.
The guide refers to a fictional charity which provides its resources (a hall) free-of-charge for use by a political candidate for a fundraising event. This is not permitted because allowing a political candidate free use of the hall is not promoting the charity’s objects; and, secondly, it is conferring a private benefit to the political candidate. However, there would be no issue if the charity charged the political candidate its standard rate for hall hire, thereby raising funds for the charity.
The second example provided describes a charity which was set up for the purpose of advancing sustainability. This charity could not have campaigned for a ‘yes’ vote in respect of the 34th amendment of the Constitution, (same-sex marriage). The reason this would not have been permitted is that this activity is not directly related to the charitable purpose of the charity.
The guide also refers to the lobbying activities and highlights that charities need to ensure that if lobbying they need to comply with the Regulation of Lobbying Act 2015.
The Register of Lobbying is web-based and is maintained by the Standards Commission. Further information on the Regulation of Lobbying Act 2015 and the role of the Standards Commission can be found at www.lobbying.ie
A Board should challenge itself, and its Management Team. It should actively review, question, explore potential flaws, exploit current and future potential of the Company. The greatest threat faced by any Company is not political or economic but, complacency. Having a diverse Board should be a key tool to ensure complacency does not exist or creep into a company structure unseen or, unchallenged.
Board Diversity should embrace all diversity in order to maximise its own potential, for example:
o gender – a no brainer, society consists of different genders, why would a Board not reflect the realities of society;
o ageism – maintaining a balanced age profile on a Board provides experience and fresh thinking;
o occupation – Director occupations can bring an imbalance to a Board, e.g. the majority of individual Directors on the Board of an engineering company should not be engineers;
o length of service – staying too long on a Board can, in some cases, end up being a little like a guest who is enjoying themselves so much they do not realise they are no longer as entertaining as they once were!
Appointing an individual simply to “fit” whatever is the current hot topic for Board Diversity is insulting to the individual, and an utter waste of time for the Board, Management and the Company itself.
Boards must willingly embrace the concept of diversity in all its guises, and support the individual Directors, and the Company adapt to the change in Board dynamics.
Board diversity is for the long haul, there are no shortcuts but, like anything that is hard work the results should be worth waiting for.
Do not be fooled by the title, this Act is not just for Accountants.
The Companies (Accounting) Act 2017 was commenced on 08.02.2018 by means of S.I. 34/2018. At first glance, with around 80 amendments to the Companies Act 2014 it looks more like an Act intended to clarify and qualify misconceptions or unintended errors arising since publication of the Companies Act 2014.
However, there are some excellent nuggets hidden in the Act not least of which is:
- expansion of qualifying conditions to qualify as a Small Company; and
- introduction of the concept of a Micro Company.
S.280(a) now classifies a Small Company as one fulfilling two of the three following requirements.
o Turnover – does not exceed €12m [up from €8.8m]
o Balance Sheet total – does not exceed €6m [up from €4.4m]
o Average number of employees – does not exceed 50 [no change]
S.280(d) introduces the concept of a Micro Company where it fulfils the following.
o Qualifies for Small Companies regime
o Fulfils two or more of the following
(a) Turnover – does not exceed €700,000
(b) Balance Sheet Total – does not exceed €350,000
(c) Average number of employees – does not exceed 10
The change in Small Company and introduction of Micro Company have knock-on effects to the Companies Act 2014. For example, substitution of S.352(1) dealing with exemption from filing certain information, and introduction of a new S.305A dealing with payments to third parties for services of directors.
We've put together some of the most commonly asked questions from clients in relation to Involuntary Strike Off.
What is an Involuntary Strike-off?
This means the Companies Registration Office (CRO) strike a company off the Register and technically, the Company no longer exists.
We aren’t trading, can I just let the Companies Registration Office do the strike-off and save myself money?
Don’t be tempted! You run the risk of prosecution and Director Disqualification.
Can the Company continue trading if the company has been involuntary struck-off?
No, and there can be very serious repercussions for companies that continue to trade while struck off.
How are Companies Registration Office dealing with non-compliance?
The CRO confirmed in October 2017 they are introducing a programme of prosecutions for companies who are late with filing. Frequent late filers are likely to be targeted first.
What are the fines for late filing?
- CRO late filing fees, are capped at €1,200 per Annual Return.
- Directors risk being disqualified for up a period of 5 years.
- If convicted; the maximum fine is €5,000 and/or up to 6 months imprisonment per offence.
What do I do if I get a summons?
You will have to appear in Court, pay any outstanding penalties and bring your filings up to date.
What other Grounds are there for Strike-off besides Late Filing:
The CRO can strike off a Company because of liquidator related issues, if request by Revenue and where no company directors are on record in the CRO.
What is the process for Involuntary Strike off?
The process takes a few months, CRO first a reminder, followed by a statutory notice, and then publishes notices in the CRO Gazette. If after all these stages, relevant filings and fines are not paid - the company is dissolved.
Is it possible to have a company restored to the register after involuntary strike-off?
It is possible to have a Company restored to the Register, but this can be very costly exercise, especially if an application to the High Court is necessary. You also need to factor in the costs of paying late filing fees, filing outstanding Annual Returns and Financial Statements.
Ensure Annual Returns are filed on time to avoid involuntary strike-off and unnecessary fines.
If you have any questions on any aspect of striking off your Company please free to contact either Van Geraghty or Kathryn Maybury at KomSec Limited on +353 1 210 7595 or email your enquiry to email@example.com.
Key dates during 2018
Month To Do
January 02.01.2018 - drink coffee, organise desk
19.01.2018 – file Annual VAT 3 Return and Return of Trading details
28.01.2018 – Global International Data Protection Day
February 01.02.2018 – CAO applications deadline
08.02.2018 – Commencment of Companies (Accounting) Act 2017
March 17.03.2018 – St. Patrick’s Day wear Shamrock & large green hat
21.03.2018 - Local Property Tax deadline (if paying full amount in one go)
Quarterly Board Meeting – issue Agenda and Board Pack
April 01.04.2018 – Easter Day
02.04.2018 – Easter Monday recover from too much chocolate
April – introduction of sugar tax, such timing!
Audit – do not forget to ensure someone has engaged Auditors
May 07.05.2018 – May Day
25.05.2018 – General Data Protection Regulations goes live
June 04.06.2018 – Bank Holiday
Quarterly Board Meeting – issue Agenda and Board Pack
July July – Possible publication of Five Year Pension Reform Plan
August 06.08.2018 – Bank Holiday
Last chance - go on holidays!
September 23.09.2018 - Corporation Tax Return deadline for filing CT Return
30.09.2018 – Annual Return Date for bulk of companies
Quarterly Board Meeting – issue Agenda and Board Pack
October 28.10.2018 – Annual Return deadline for electronic filing
29.10.2018 – Bank Holiday
October 2018 – Budget Announced
November Pension – consider topping up personal pension
December Quarterly Board Meeting – issue Agenda and Board Pack
25th December 2018 – do not forget to put Turkey in the oven
KomSec Limited will be closed from 24.12.2018 to 02.01.2019 inclusive.
Everyone in KomSec Limited wishes you all a very Happy Christmas, and hope you have a contented time with your family and friends.
Our families seem even more important at Christmas. Sadly though people die regardless of the season. When that death happens overseas it adds an unexpected burden of logistics, costs, and bureaucracy to an incredibly emotional time.
This year KomSec Limited has made a contribution to the extraordinary Kevin Bell Trust which helps alleviate the financial burden of repatriating a family loved one.
The Charities Regulatory Authority has introduced a “Trustee Learning Portal” to provide training to help Trustees understand their legal obligations.
The first course “Guidance for Trustees” is online and takes approximately 40 mins to complete. The content covers the material from their guidance booklet of the same name. Try it for yourself, https://trusteelearning.ie/.
Despite the limitations of online learning, there are numerous advantages; the course is free, convenient, flexible and delivers quality information to a large cohort of Trustees in Ireland fully online.
We can look forward to the introduction of additional courses over the coming months to support Trustees in getting to grips with governance requirements in the Charity Sector.
Charity Corporate Health Check
We are closing off Ireland’s “Trustees Week” with a Corporate Health Check specifically prepared for Charities. These questions can be used as an indicative test of Corporate Governance for your Charity.
You may not know the answers to all the questions, so check with your Company Secretary, Statutory Auditors, Accountant and other professional advisors who will be happy to help.
1. Charities Regulator’s Register of Charities – is your charity registered with the Regulator
2. Registered Office – is your charity’s registered office is correctly noted in the Companies Registration Office
3. Charity Trustee/Director – are you recorded as a Director / Trustee with the Companies Registration Office and the Charity Regulatory Authority.
4. Books and Records – are your Charity’s Statutory Registers, Board, board sub-committee and general meeting records held at the registered office.
5. Accounting Records – is the Charity using a “competent and reliable person” such as an independent accountant to maintain accounting records? The charity should be able to measure its financial position with reasonable accuracy at any time.
6. Board Meetings – is the Charity maintaining Board minutes? Minutes must contain names of those present, in attendance, meeting proceedings and note any resolutions passed. The Minutes must also be signed by the Chair.
7. Annual General Meetings – members must be issued with a notice of a general meeting and provided with a copy of the financial statements prior to an AGM.
8. Companies Registration Office Annual Return – are they being filed on time? If your Charity is a limited company, it will have an Annual Return Date and is obliged to submit an Annual Return within 28 days of this date to the Companies Registration Office.
9. Charity Regulatory Annual Report– all charities (regardless of size) must submit an Annual Report to the Charities Regulatory, within 10 months after the end of each financial year and depending on the size, should also include the financial accounts.
10. Financial Benefits of being a Charity Trustee – as a Charity Trustee, by law you may not profit from carrying out your duty as a trustee. You cannot accept a salary specifically for acting as a charity trustee nor receive another benefit (with the exception of being reimbursed for reasonable expenses carrying out your duties).
CRO CHRISTMAS DEADLINES
December is often a frantic month as everyone juggles Christmas presents and clearing their office desks.
KomSec cannot help with the Christmas presents but, we can help you clear any outstanding filing requirements you may have before Christmas. Just remember, the CRO will not guarantee processing any submissions received after the following dates.
- Company Incorporations 11th December
- Change of Name 11th December
- Reservation of Company Name 19th December
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