Companies Act 2014 - Potential changes are coming

Companies Act 2014 - Potential changes are coming

The Bill proposes a number of amendments and additions to the Companies Act 2014 (the ‘Act’) with the aim of ensuring that the Act remains progressive and responsive in regard to Company Law and current business practices.

Whilst the Bill contains 86 proposals, the below changes will be of interest for many SME’s;

• Electronic and Hybrid Meetings – One of the key changes is the permanent inclusion of the provisions seen within the Companies (Miscellaneous Provisions) (Covid-19) Act 2020. In particular, the ability for companies to hold general meetings through virtual or hybrid means allowing for greater flexibility and ease of compliance with statutory duties for both companies and their members.
• Loss of Audit exemption – the Bill provides that companies which file their Companies Registration Office (CRO) annual return late retain their audit exemption so long as they do not subsequently make a further late filing within a consecutive five-year period. The late filing fee will still apply.  This would be a great benefit to many companies, as the current rules in respect of late filing result in loss of audit exemption for a subsequent two-year period, which can be a prohibitive cost for many SME’s.
• Strike Off changes – There are three new grounds for involuntary strike off proposed within the Bill in addition to those already in place;
  • failure to provide beneficial ownership information to the Register of Beneficial Ownership (RBO);
  • failure to have a Company Secretary registered with the Companies Registration Office (CRO) and;
  • failure to notify the CRO of a change in registered office address.

These grounds, in particular the failure to provide the RBO with beneficial ownership information, should highlight to companies the importance of compliance with their statutory requirements.

Several other changes to note include;

Changes to mergers

At present, the domestic merger process allows for two private Irish companies to merge, resulting in the assets and liabilities of one company being transferred and subsumed by the other, provided that one of the merging companies is a Private Company Limited by Shares (‘LTD’).  The Bill, when enacted, will amend the current legislation to provide that one of the companies must either be an LTD or a Designated Activity Company (‘DAC’). 

Additionally the Bill allows for a group of wholly owned subsidiaries to be merged by absorption into their parent company in one single transaction rather than in several separate transactions.

Signing of Documents in Counterpart

The Bill allows for the execution of documents under Seal at multiple locations within the State, making things a lot easier for companies where parties may be at different locations within the country.

The Bill when enacted will also see provision made for the recording of gender balance data within the CRO annual return; Form B1 on a voluntary basis, as well as increased powers of investigation and reporting for the Corporate Enforcement Authority.

The Government has yet to set a date for enactment, it is expected that this will take place by the end of 2024. We will continue to provide updates as soon as more updates are provided. 

We are here to help

If you would like further information, or require any guidance in respect of compliance requirements for your Company, please contact Ossie Houghton or Sarah-Jane O’Keeffe  of our Corporate Governance & Compliance team.