Five key things you (and your clients) need to know
The Companies (Accounting) Act 2017 (the “2017 Act”) was signed into law in May, the provisions of which generally came into force on 9th June. It’s a substantial piece of legislation which makes several amendments to the Companies Act 2014 – notably the form, content and filings of annual and consolidated financial statements. We’ve summarised the top five things you need to know in order to help prepare your clients for changes that will impact them:
1: Accounting changes
The 2017 Act has redefined the thresholds for what qualifies as a micro, small, medium and large companies, which in turn dictate financial reporting requirements. It introduces less burdensome accounting compliance requirements for companies that fall into the “micro” bracket, while medium-sized businesses will now be required to prepare financial reports in full.
2: Non-filing structures
The 2017 Act considerably reduces the scope for unlimited companies to avoid filing financial statements with an amended and much broader definition of what constitutes a “Designated Unlimited Company”. It also requires ULCs with a limited liability subsidiary to file financial statements for financial years beginning on or after 1st January 2022.
3: Expanded branch definition
Previously, unlimited foreign companies could not register a branch in the State. Under the 2017 Act, the definition of what constitutes a branch has been expanded to “EEA company” and “Non-EEA company”. That means an unlimited non-Irish entity which is a subsidiary of a limited liability corporate must register as a branch if it is operating in Ireland – bringing significantly more ULCs within the Companies Registration Office financial filing regime.
4: Unlimited companies’ names
The 2017 Act requires that all unlimited companies must use the words “unlimited company” in their names, and can no longer apply for exemption to the Minister for Jobs, Enterprise and Innovation. Companies that have already been granted an exemption will retain it until the period specified in the exemption letter has elapsed.
5: Extractive industries and logging
The 2017 Act introduces mandatory reporting requirements for large companies, groups and “public interest entities” involved in oil and gas exploration or extraction, mining, or the logging of primary forests.
One last thing to bear in mind is that with Sage your software will always be up to date with any legislation changes, so you and your clients can be confident that you’re always compliant and in complete control.