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Company Law Updates

In recent weeks there have been a number of changes introduced to Irish company law legislation. It is important for the company secretary, who under Companies 2014 must have the requisite skills to discharge his/her statutory and other legal duties, to keep abreast of such legislative changes in order to ensure that this requirement is fulfilled.

The Companies (Statutory Audit) Act 2018
The Companies (Statutory Audit) Act has commenced effective 21st September 2018.

Loss of Audit Exemption
Under previous legislation, when an audit exempt company was late filing annual return and financial statements with the Companies Registration Office, the company lost the entitlement to claim audit exemption for the late financial statements and the following year. This resulted in the company having to complete a retrospective audit on a financial year that had already expired. At the same time, late filing penalties were accruing for each year that the Annual Return and Financial Statements remained outstanding. Under this new legislation, it is now the following 2 years of financial statements that will require an audit. The late statements are to be submitted without an audit and with the late filing fees paid.

Filing of Annual Returns and Financial Statements
Currently the filing of annual returns and financial statements occurs in a two-step process. An annual return is to be filed within 28 days following the annual return date, with the financial statements to be electronically uploaded within 28 days of the electronic filing. This process is to be streamlined under the 2018 Act, whereby companies will be granted 56 days after their annual return date to file both their annual return and financial statements in a singular step. This new process has not yet been introduced.

Section 343 – District Court Applications Retained
The District Court process of seeking extra time to file an annual return, without incurring late filing penalties or loss of audit exemption, will remain in force.

Should you require further advice on these changes, or company secretarial support, please contact grainne.howard@bakertillyhb.ie