Ireland, Right Place Right Time - Support from the IDA

Ireland itself is seen to be in the top ten countries in the world for innovation with the highest population of Science and Engineering Graduates in the OECD. 

Companies considering Ireland as a potential location will have no difficulty amassing substantial information on the benefits of locating and working in Ireland.  The challenge is to find an efficient way through that labyrinth of seemingly contradictory material.

One of the first ports of call should be the IDA – Ireland’s inward investment promotion agency – which actively promotes and support Foreign Direct Investment into Ireland. The IDA will help companies considering setting up or investing in Ireland by facilitating Site visits, access to Universities, provide Advice, etc.

Apart from having IDA contacts in Ireland itself, the IDA has representatives around the world ensuring decision makers in Global Head Offices can access onsite visits and clear data on the benefits of locating in Ireland.

 The IDA highlights some interesting facts on businesses located in Ireland, and reasons why.

• 17 of the top 20 global software companies
• 14 out of 15 top medical tech companies
• 20 out of 25 top financial services companies
• 10 out of 10 top pharma companies
• 8 out of 10 top industrial automation companies
• 9 out of 10 top global software companies operate in Ireland
• 3 of 5 top games publishers based in Ireland
• 25% tax credits for Research & Development

Do not take our word for it, visit the IDA website https://www.idaireland.com/ and see for yourself.

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New Anti-corruption legislation – potential impact on Irish companies

30.07.2018 saw the introduction of the Criminal Justice (Corruption Offences) Act 2018.  At first glance it looks like a potentially terrifying piece of legislation, and frankly continues to do so even after second and third glances. 

The new Act has implemented six specific recommendations of the Mahon Tribunal.  Of particular interest is that the Act covers corporate bodies, and individuals but, also covers Irish Officials.

Key offences of the Act.

• New offences of Active and Passive Trading
• New offence of an Irish Official doing a Corrupt Act
• New offence of giving a Gift or Advantage
• New offence for Creating or Using False Documents
• New offence of Intimidation

Presumptions of the Act.

• Presumption of corrupt gifts extended to “connected persons”
• Presumption of corrupt donation expanded

New provisions include:

• Forfeiture of public office, and prohibition from seeking public office for Irish officials
• New strict liability offence for bodies corporate
• Provisions for seizure and forfeiture of bribes

This Act broadens definitions of corruption, covers a wider range of individuals, and includes Irish Officials.  It also provides for potential prison sentences up to 10 years, forfeiture of bribe, forfeiture of office (Public servants and elected Officials) up to 10 years and unlimited corporate fines. 

This is a radical overhaul of anti-corruption in Ireland which companies, at the very least, should take time out to consider if their policies are sufficiently robust.

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Filing Annual Returns and Financial Statements - FAQ

Filing Annual Returns and Financial Statements - FAQ

September is the month panic can set in as Companies suddenly focus on their filing deadlines for their Annual Return and Financial Statements. Confusion can surround terminology, deadlines, and signatures required. 

Below are answers to some of the most frequently asked questions (FAQs) KomSec Limited receives from our clients at this time of year.

*  Annual Return Date (ARD) date up to which information contained in the Annual Return is made, e.g. up to 30^th September.

*  28 days after ARD the Annual Return must be filed electronically within 28 days from ARD.

*  28 days after electronic filing the original signed signature pages must be received by the Companies Registration Office (CRO) within 28 days from the 

    date on which the Annual Return was filed electronically.

*  First Annual Return does not have to file Financial Statements.

*  Financial Year – A company’s first financial years end can end no more that 18 months after its incorporation date. Subsequent financial years must start

    the day after the last financial year end and be for 12 months, + or – 7 days.

*  Nine month rule means that companies must file their FS within a maximum of 9 months and 28 days of the end of their financial year, known as the 9

    month rule.

*  Financial Statements must be filed electronically before or on day original signed signature pages are received by the CRO.

*  Financial Statements size is restricted by the CRO to a maximum of 5mbs.

*  Signatures for Annual Return are one Director and the Company Secretary.

*  Signatures for Financial Statements must be typed.

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Water and Banks

WATER and BANKS

Surely there are no two words more contentious in the Irish lexicon.

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5 Reasons to do business in Ireland

5 Reasons to consider doing business in Ireland

Photo by Stephen Bergin on Unsplash

1.      Ireland has been ranked as one of the best countries for business by Forbes Magazine.

 In addition, the IMD World Competitiveness 2017 Yearbook ranked Ireland; 

         - 1st in the world for investment incentives for foreign investors

         - 1st in the world for labour flexibility and adaptability of the workforce

         - 2nd most competitive country in Eurozone

2.      Native English Speakers

 Post-Brexit, Ireland will be the only native English-speaking member in the EU with access to the European Market of 500 million consumers.

3.      An unrivalled Hub for Foreign Direct Investment

 In 2017 Ireland was named the best country in the world for attracting high-value foreign direct investments for the sixth year in a row. Many of the world's   high performing global companies are doing business in Ireland including Google, Facebook, Paypal, Intel, Twitter, Pfizer, Citi, Huawei and Novartis.

4.      Well Educated Workforce

 Ireland’s workforce is well educated, flexible and adaptable. Ireland also has the highest proportion of science and engineering graduates in the OECD.

5.      Attractive Tax Regime

 Ireland offers 12.5% corporation tax and 25% R&D Tax credit and other taxation benefits. The country also has exceptional intellectual property (IP) and   holding company regimes.

For facts about Ireland, click IDA Facts about Ireland

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Thinking of becoming a Director? Think before you leap!

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?

Why bother?

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?

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Guidance for Charities on the promotion of Political Causes

 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.

Permitted Activities

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.

Prohibited Activities

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.

Lobbying

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

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Board Diversity - how diverse are you?

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.

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Commencement of Companies (Accounting) Act 2017

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:

1. expansion of qualifying conditions to qualify as a Small Company; and
2. introduction of the concept of a Micro Company.

Small 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]

Micro Company

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.

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Involuntary Strike Off - Some Questions Answered

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. 

Conclusion

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 info@komsec.ie.

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