Key Ways To Benefit From The New Companies Act 2014
As the New Companies Act 2014 has been signed into law and is due to be enacted in June 2015 now is the time to make yourself aware of the provisions of the new act and to learn how you can benefit from its implementation. With change always comes opportunity and by placing yourself ahead of the curve you can steal a march on competitors. Also its equally important to know the benefits to your business and how you can use the new act to your advantage. Here are some ways that you may be able to benefit from the New Companies Act 2014.
1. Are you a Sole Trader Business?
If so for the first time you will be afforded the opportunity to register your business as a one person limited company as the new act removes the requirement to have two directors in order to form a company. From June 2015 sole trader businesses can choose to register as a company and avail of the limited liability status and reduce their personal exposure as a result of carrying out their normal business activities. With this protection does come greater obligations and the business must file a B1 like other limited companies and the business must also have a company secretary. Overall though having the option of limited liability status will be very attractive to most Sole Traders and many will likely choose to re-register their businesses to avail of the opportunity at the first availability opportunity.
2. Will You Be Able To Apply For Audit Exemption Status?
You may well be if your business is a Group or Company Limited by Guarantee with No Share Capital and when you apply for audit exemption under the new act no later than 1 month prior to your year end. You must also satisfy 2 of the 3 current exemption thresholds of turnover less than 8.8m, balance sheet less than 4.4m and have 50 employees or less. If the do satisfy the criteria the benefits could be significant with reduced costs (savings from not having to perform an audit) and administrative savings (time and personnel costs of complying with an audit). Audit Exemption can save a business thousands of euros and allows for your accountants and advisors to get on with more proactive ways of assisting your business separate to compliance. Examples of business types that will benefit include: charities, members organisations, clubs, sports organisations, residential property management companies, subsidiaries and holding companies.
3. Have You Had Difficulties with Late Payments Recently?
If so you will be very interested to know that the new companies act 2014 has placed significant emphasis on ensuring business keep up to date with their debtors and have introduced significant penalties for companies which deliberately choose no to pay their debts in a timely manner. From June 2015 if your business is owed over €10,000 by a company and the debt has been outstanding for more than 3 weeks you can make an application to the courts for the company to be liquidated in order to satisfy the debt. You can no longer be ignored by a business in relation to the repayment of large debts and now have the power to potentially shut down the company if they do not pay within the prescribed period. Naturally some business arrangements may be entered into with payment provisions longer than the default terms of the companies act if that suits their business relationship and the actual enforcement of such winding up petitions will no doubt be tested in the courts by the first sample cases with further guidelines likely to be recommended as a result. The spirit of the act is that all businesses treat each other with respect and pay their bills on time or if they cant then they shouldn’t be purchasing the goods/services at that point in time.
4. Tired of the Unnecessary but Obligatory Annual General Meeting?
For many companies, particularly small businesses that interact continuously every day, the yearly AGM can be a tedious and unnecessary burden. Compiling a formal report, booking an external venue, inviting attendees, and managing the event can be costly process for a small businesses. In an environment where all capital is precious holding a physical AGM simply because there is a statutory requirement to do so has become outdated in the modern way of small business. In most small businesses the managers/operators are the owners and know all too well the standing of the company and makes the procedure of the traditional AGM redundant. Under the new companies act 2014 the need for a physical AGM will be removed from law. Once all the shareholders of the business agree that a physical AGM is unnecessary then it is not required to take place.
5. Winding Down a Business Will Become Less Costly!
Naturally every businessman is trying to wind up their business not down but in the unfortunate event where a company is no longer viable for whatever reason then new measures will make it easier to wind down a company. Firstly there will be a legal distinction made between voluntary and involuntary strike off, meaning a company winding down with no debts and have no outstanding obligations will not penalised with regard to any future directorships they wish to hold. Similarly for larger companies a new principle called Summary Approval Procedure will mean that solvent/voluntary wind down cases no longer have to apply to the high court for approval, which was previously a costly and time significant event. So if you are in a situation where you need to wind down one company to start another fresh or if you decide on a change of business direction then the process will become a lot easier from June 1st 2015.
By knowing and planning for the effects that the new companies act 2014 will have you and your business can use the act to the benefit of your business. You can save money in a number of areas, can use the act to gain better protection personally and can financially benefit by knowing your new rights as a business owner. You and your business will be in a better position by embracing the new changes that the act will bring. There may also be customer acquisition opportunities for your business to explore as well so that you can benefit from new revenues as well as better protecting your own.
Contact Avid Partners today to see how we can help you business make the best use of the new companies act 2014. Call us on 0818 303087, Email us at advice@avidpartners.ie or alternatively you can fill in the Enquiry Form below.
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