Archive before October 2015
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Statutory Auditors - Real or Imagined!
It seems obvious but, in reality how many companies actually check their Statutory Auditor is entitled to act as an Auditor?
Although not prolific in number, there are some hard core individuals that persist in holding themselves out as Statutory Auditors even though they are not entitled to act in such a capacity. The difficulties for companies who, albeit unwittingly, retain such individuals can cause various problems, and serious financial loss.
For example, a company files its Annual Return(s) with what it believes to be properly Audited Financial Statemens attached. It is subsequently found out the individual who prepared the Financial Statements had criminally held himself out as a Statutory Auditor when not entitled to do so.
Result - the company paid an individual to carry out an Audit which is found to be invalid, and the company must now retain an authorised Statutory Auditor to re-do the job incurring an additional set of fees. A double whammy you may think but, no - it is a triple whammy and why?
Audited Financial Statements are filed in the Companies Registration Office with a Company's Annual Return. Where those Financial Statements have been prepared by an unauthorised Statutory Auditor the Company must re-file and the Annual Return is deemed to have not been filed at all thus exposing the Company to probable payment of penalty late filing fees. Talk about rubbing salt into the wound.
The Director of Corporate Enforcement successfully took a case in April 2015 against one of those hard core offenders resulting int he individual being found guilty of having acted as an Auditor when already disqualified from doing so, and producing false audit reports.
To ensure your Company does not get caught out unwittingly take five minutes to check the Companies Registration Office. Go to the Audit Search Facility on their website (www.cro.ie) where you will find detials on firms, indivduals names, Auditor Registration Number, and recognised Accountancy Bodies. Still in doubt? Then contact the Accountancy Body and look for another Auditor!
Charities Regulation
The Charities Regulatory Authority (CRA) was established on 16.10.2014. All Charities established prior to that date (in line with S.39 of the Charities Act) had six months from date of commencement to apply for registration with the CRA.
Six months after the long awaited setting up of the CRA it was a disappointing reality that of the estimated 4,000 Charities falling under S.39 of the Charities Act only 200 had applied for registration.
Such a stark reality left the Minister for Justice and Equality with few options. The Charities Act enabled Minister Fitzgerald to extend the deadline period for Charities (in existence prior to 16.10.2014) an option she availed of when in April 2015 she announced an extension to 16th April 2016.
When announcing the extension the Minister said "it is important that all charities operating here meeting their obligation to register on the new public Register of Charities. This Register is intended to provide much needed additional transparency about our charity sector. I ahve taken the decision to extend the registraiton period in consultation with the Charities Regulatory Authority. I encourage any charity that was established before last October and that has not yet begun the registration process to do so now."
Quite what options the Minister or Charities Regulator will have or, perhaps more importantly be willing to employ, should such a derisory level of applications continues is impossible to judge at this time. For now, it appears that around 3,800 Charities falling under S.39 of the Act are unlikely to alter their laissez faire approach to this basic and essential piece of legislation.
An extremely disappointing outcome to date!.
IT'S BEGUN - The Companies Act 2014
IT'S BEGUN - The Companies Act 2014 has finally arrived, and has been up and running since 1st June, 2015.
Although there are teething problems sinces it commenced on Monday 1st June 2015 for now they appear to be mainly of a technical nature, e.g. problems filing changes of directors and other statutory forms. Overall commencement has started quietly possibly due to a collective intake of breath by service providers. Everyone seems to be waiting to see what everyone else will do but, at some stage we are all going to have to dive into the Act.
The naysayers forecasting Armageddon have been proved wrong as the transition period starts for service providers and companies in Ireland. A bright new day - possibly!. Certainly it will be easier to incorporate a company but, there will be compliance issues surrounding companies in existence prior to 1st June 2015. An anomoly surrounding shares raised by the Irish Stock Exchange has already been detected with amending legislation likely to be enacted shortly. The discontinuance of Places of Business for External Companies will definitely catch companies out. It will be interesting to see if this list grows any longer.
Despite such quibbles it is an astonishing achievement that so many people (on or connected with the Company Law Review Group) gave their time voluntarily to consolidate 150 years of case law, and over 50 years of company law to generate an Act set out in clearly defined sections and plain English. Their efforts, and the commencement of The Companies Act having waited almost 15 years are to be applauded.
18th May 2015 - Deadline
18th May 2015 is the deadline date to either incorporate a company or change its name due to the expected commencement date of the Companies Act on 1st June 2015. Until 18.05.2015 companies can be incorporated or change their name using existing statutory forms based on existing company law. Provided the statutory forms are accurate and filed by 18.05.2015 the companies will be incorporated or, the name changed on or before Friday 29th May 2015.
Any statutory forms incorporating or changing company names filed after 18th May will not be processed by the Companies Registration Office and will be returned.
In practise there will be a hiatus between 18.05.2015 and 29.05.2015 during which it will not be possible to file statutory forms to either incorporate a company or change a company name. From 1st June 2015 normal service will resume with the Companies Registration Office as all statutory forms will reflect the Companies Act 2014 due to be enacted on that day.
Contact us if you have any issue surrounding this, particularly if you need a company urgently between 18.05.2015 and 29.05.2015.
As anticipated the Companies Act 2014, will commence on the 1st June 2015
On the 1st May 2015, Richard Bruton signed The Companies Act 2014 (Commencement) Order.
As anticipated the Companies Act 2014, will commence on the 1st June which the exception of some provisions relating to financial Statements.
The order can be viewed by clicking on http://www.irishstatutebook.ie/pdf/2015/en.si.2015.0169.pdf.
What is the difference between a Registered Office and a Registered Office Agent?
New Companies Act 2014: What is the Difference between a Registered Office and a Registered Office Agent?
Registered Office - a full postal address in the State is necessary for all companies to which communications and notices can be addressed.. A P.O. Box is not acceptable. S50 (1) CA 2014.
A Registered Office Agent (ROA) is an Irish Registered Company registered in the state which has prior approval from the CRO to provide registered office facilities for companies. The ROA number will be the company number. In order to become a Registered Office Agent, the company must file a B81 (not in use until 01.06.2015).
Each company that intends to use the Registered Office Agent’s address, must file a B2 nominating the agent with the details of their agent and registered address. If the ROA subsequently changes address by fling a B2, then the addresses for all the associated companies will also be changed without the need to file a B2 for each individual company. S50(4) CA 2014.
The rationale behind this particular piece of legislation is to assist companies who provide this facility. It’s in the Act as a facility not an obligation or regulation.
Professional firms such as accountancy and solicitor practices who trade as partnerships (not limited companies) can continue offering RO service to their clients but won't be able to register as ROAs.
How to convert an existing private limited company to a DAC
OPTION ONE - Participation by Directors and Members
A new Constitution is drafted by the Directors which is approved by the members by means of an ordinary resolution prior to 30th September 2016 or by Special Resolution after that.
OPTION TWO – Member or Members who hold 25% of Total Voting Rights Serve notice on the Company
In the event the company takes no action, a member or members who hold share that confer, in aggregate, more than 25% of the total voting rights, can serve a notice in writing requiring the company to convert to a DAC.
OPTION THREE – Member or Members who hold in excess of 15% Issued Share Capital of the Company
(S58)In the event the company takes no action, a member or members who hold in excess of 15% of the issued share capital can get a conversion order from the Courts instructing the company to convert to a DAC.
(S969) On re-registration, the CRO will issue your Company with a new Certificate of Incorporation. The company designation will be “DAC” or “Designated Activity Company” or as gaeilge “CGA” or ““Cuideachta Ghníomhaíochta Ainmnithe”.
IF NO ACTION IS TAKEN
A company who takes no action, will by default at the end of the transition period become the new simplified private company limited by shares. This may not be the appropriate structure under which the company should operate. In certain circumstances the company also risks being instructed to convert by a court order.
(S63)In addition, if members and/or creditors believe they have been prejudiced by the company’s inaction, they can apply to the courts for relief.
Company Name Change
Changing a company name takes careful planning Here's a checklist to help, while not exhaustive, it might include something you haven’t yet thought of.
Your thoughts and questions are welcome!
Conversion to the new simplified model of the Private Limited Company
Conversion to the new simplified model of the Private Limited Company
The new Companies Act 2014 will require all companies to make key decisions during the coming months. There will be an 18 month “transition” period during which companies must decide to convert to the new simplified model of the Private Limited Company or a Designated Activity Company. It is expected that most companies will choose to convert to the new private company limited by shares. This blog will focus on conversion to simplified model of the Private Limited Company only.
Directors be prepared
Finally, after many false starts, almosts, nearly and any minute now the reality of the Companies Act is about to hit. In April every single Director in the Country will receive a booklet from the Companies Registration Office (CRO) notifying him or her of their individual responsibilties under the Act. The booklets will be sent by email to those Directors the CRO have personal email addresses for, with the balance being sent by post to the home address last recorded in the CRO. Ensure the CRO have your current details by contacting us at vgeraghty@komsec.ie
The past couple of months have already seen a noticeable increase in seminars, workshops, etc, surrounding the commencement of the Act which are only likely to increase further once the CRO start their media campaign in April.
KomSec will be in touch with all our clients to keep them aware of what is happening, what is relevant, what to do, and when to do it! We will support each of our clients as they come to terms with the options and implementation elements of the Act.
New CRO Registrar
Maureen O'Sullivan has now been appointed Registrar of the Companies Registration Office (CRO). Familiar territory in one sense as she previously worked in the CRO but, unfamiliar in another as she comes to terms (like all practioners and companies in the South of Ireland are doing) with the Companies Act enacted in December 2014. The practical application of the Companies Act, although challenging for everyone, must surely be one of the biggest challenges ever faced by the CRO. The CRO must be ready to "go live" from the date of commencement (currently expected 01.06.2015) whilst the rest of us will probably be able to take a more staggered approach. Given the amount of work the CRO have already done behind the scenes they should be well prepared for commencement and the likely deluge of queries from companies getting to grip with the consolidation of Acts from 1963 to date. Good luck to the new Registrar and her staff it is going to be an interesting year for sure!
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- Company Name Change (2)
- Charities Regulation (4)
- Companies Act 2014 (9)
- Companies Registration Office (3)
- Digital Certificates (1)
- Registered Office Agent (1)
- Electronic Filing (2)
- Letterheads (1)
- Directors (2)
- Company Law Review Group (1)
- Financial Statements (1)
- Company Registers (1)
- Auditors (1)
- The General Data Protection Regulation (1)
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