Get Your Business Prepared for the New Companies Act 2014!
New legislation will soon be enacted which will consolidate the existing Companies Acts 1963-2013 into one new single piece of legislation (Companies Act 2014). The Bill passed the final stage before enactment on 10 December 2014, will now be presented to the President for his signature, which is expected to happen late December or early January. Changes to the companies act will make it easier to register and operate a limited company in Ireland and will simplify the provisions of Irish company Law. The bill is expected to be signed into law shortly with its Full Implementation Scheduled for June 2015. Some of the Main Features of the New Companies Act 2014 include:
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The need for a ‘physical’ Annual General Meeting (AGM) will be removed, once the shareholders agree.
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Single Director Companies will be permitted once a Separate Company Secretary is appointed.
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Under the New Companies Act 2014 if a creditor is owed over €10,000 and the sum remains unpaid for three weeks then an application can be made to the courts for the liquidation of the company.
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Offences for breaching the companies act will now be ranked on a Scale of 1-4 (1 being the most serious) with the punishments for breaches of the law clearly stated, resulting in greater transparency. Fines ranging from €5,000 – €500,000 are outlined in the act.
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The Definitions of a Small & Medium Sized Company have changed. Definitions are now stated as:
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Small Company – Turnover <€8.8m, Balance Sheet Total <€4.4m, No of Employees <50.
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Medium Company – Turnover <20m, Balance Sheet Total ,10m, No of Employees <250
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The law relating to the strike off of companies will be changed and a legal distinction will be drawn between voluntary strike-off and involuntary strike-off.
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The Memorandum & Articles of Association will be replaced by a ’Constitution’ document which will be provided by default (unless a specific company constitution is requested).
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A new principle of “Summary Approval Procedure” will no longer require companies to obtain High Court approval for procedures like capital reductions and solvent windings up.
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Audit Exemption will now be possible for holding and subsidiary companies once certain conditions are met. Groups and Companies Limited By Guarantee without a Share Capital may avail of audit exemption if they are under the thresholds.
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Thresholds for Audit Exemptions will also change allowing more companies to avail of them.
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Companies will be able to trade in whatever legally permitted business they wish without the need to pass a special resolution.
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A Private Limited Company will become known as a ‘Company Limited by Shares (LTD)
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LTD companies can pass majority written resolutions.
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Directors of a business must be 18 years or older.
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The Annual Returns and Accounts filing requirements have not changed under the new act.
It is important for Every Business to be aware of the Provisions of the New Companies Act 2014 as the details will impact on their business in a number of ways. Directors need to know their requirements when it comes to complying with company law and also of their rights when it comes to dealing with other companies. Directors also need to be aware of their standing when issues of Payment and Creditor procedures arise and be aware of the formal avenues that must be followed in order to gain satisfaction when required.
Failure by Company Directors to know the main provisions of the New Companies Act 2014 can be costly with fines ranging from 5k to €500k for breaches of the new act, whether through deliberate actions or ignorance of its provisions. Start getting ready for the New Companies Act 2014 in advance of it becoming law in June 2015. Stay ahead of the curve and know your new obligations as a business owner or director. The duties of the company director will be simplified and clarified under the new act but you must know your new responsibilities as ignorance is not an excuse.
Contact Avid Partners today if you require any clarifications on the upcoming New Companies Act 2014. We can assist you with a smooth transition and ensure that your business is compliant with all of the new provisions of the act. Phone us on 0818 303087 or email us advice@avidpartners.ie. Alternatively you can complete the contact form below.
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