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2018 – New Compliance Obligations for Directors & Secretaries

2018 sees the introduction of a number of new initiatives for Irish entities. Company directors and company secretaries, regardless of size or trading activity have an obligation to comply with these new rules or run the risk of the enforcement action being taken against the company.

1. CRO – Zero Tolerance Approach

As of the 1st April 2018, the CRO will reject incomplete Annual Return (B1) submissions. Previously they had allowed a rejection period of 14 days to correct an incomplete submission.

What constitutes an incomplete B1 Submission?

• B1 signature page or overall accounts certification page with any of the necessary signatures missing.
• A signature page being received by the CRO with no corresponding Financial Statements electronically uploaded for a company.

Failure to comply and file on time has serious consequences for a company to include the loss of audit exemption for two years, automatic filing penalties and the possibility of enforcement action being taken against the company and its directors.

2. Register of Beneficial Owners

We had previously written about an upcoming duty on companies to maintain an internal Register of Beneficial Owners (RBO). The CRO has recently advised that the Department of Finance are expected to make a Statutory Instrument(SI) in the coming months assigning responsibility to the CRO for the establishment and maintenance of a new central RBO. Filing will be done by entering the details of each beneficial owner through a new on-line portal.

The information to be filed with the CRO in respect of each beneficial owner (must be a natural person) will include the following:

• Forename & Surname
• Date of birth
• Nationality
• Residential address
• A statement of the nature of the interest held by each beneficial owner
• A statement of the extent of the interest held by each beneficial owner
• The date on which each natural person was entered in the company’s own register
as a beneficial owner of the corporate entity
• The date on which each natural person who has ceased to be a beneficial owner
of it, ceased to be such an owner
• If no natural persons are identified there shall be entered in the register the names
of the natural person(s) who hold the position(s) of senior managing official(s)
of the company.

Details of the presenter making the entry in the RBO on behalf of the company will also be required. Until the SI is formally passed, this information is subject
to change.

3. External Company- Broadened Definitions

External companies with branches established in Ireland must register their details with the Companies Registration Office and file financial statements annually. An ‘external company’ is defined by the Companies Act as ‘an EEA or non-EEA company’. Currently, the Companies Act defines EEA and non-EEA companies as body corporates whose members have limited liability. Under section 80 of the Companies (Accounting) Act 2017 which comes into effect on 9th June 2018, the definition of EEA and non-EEA companies will broaden, to also include undertakings whose members have unlimited liability, and subsidiaries with limited liability. This means that from this date onwards, foreign corporate bodies such as unlimited companies and partnerships with one or more branches operating in Ireland will also be required to register details and file financial statements with the CRO annually, where previously this would not have been necessary.

For further information on any of the foregoing, please do not hesitate to contact Gráinne Howard.