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Companies Act 2014

 

The Companies Act 2014 was signed on 23 December 2014 and commenced on 1 June 2015. This micro site is intended to bring members’ attention to some of the key aspects of the Act and provide access to information on aspects that may be of particular relevance to accountants and auditors.

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Read More on the purpose of this microsite.

Video transcript

Hello.

The Companies Act 2014 (or CA 2014 as we have come to call it) came into effect on the 1st of June 2015. It’s the biggest single piece of legislation in the history of the State. It has turned the structure of previous company law on its head and now follows a ‘think small first’ approach.

The first 15 Parts of the Act focus on what is likely to be the most common form of company in Ireland – that is the private company limited by shares, or Ltd.
So now, the vast majority of Irish companies will find all of their company law requirements set out in a easy to follow, logical series of parts. The remaining parts of the Act deal with other types of company and the special requirements that apply to these – such companies include designated activity companies, or DACs; plcs; various forms of unlimited company, and companies limited by guarantee.

There is much to be welcomed in this new Act.
For example audit exemption provisions have now been extended to include small groups, dormant subsidiaries, and companies limited by guarantee. There is also an ability for certain companies to dispense with physical annual general meetings, and for some companies, the ability to appoint a single director only.

But as with any new legislation, it will be a challenge for us all in getting to grips with the look and feel of the new law. Here at Chartered Accountants Ireland our technical team, our practice consulting team and members of our various technical committees have been working to make these challenges as painless as possible.

Recently in conjunction with CCAB-I, we issued 5 new Technical Releases which address key changes in the areas of financial reporting, auditing, and related matters. Our microsite on CA 2014 provides a direct link to the new legislation, and also to related statutory instruments.

The Institute will continue to monitor Company Law developments, and if appropriate will issue further guidance. Watch out too for details of upcoming CPD courses, and our Practice Consulting Team has recently launched a Companies Act 2014 Disclosure Checklist and Pro forma Financial Statements.

Thanks for watching.

What To Do Next?

Company types and conversions

As Company secretary/director/advisor you need to consider whether your company needs to convert to change to the new model of private company (LTD) or convert to being a Designated Activity Company (DAC).

Find out more about company types and conversions.

Company Types

  • Private Company (LTD)

    A company limited by shares is the new model private limited company.

  • Designated Activity Company (DAC)

    The DAC is the alternative to the LTD and is close to the corporate structure we are familiar with in Ireland. Certain companies may wish to convert to DAC as they have been set up for a specific purpose eg management companies.

    The differences are summarised here: Table 1: Which company type to choose.PDF

  • Other Types of Companies

    Table 3: Different types of company.PDF

Timeframe for Conversion

  • The Companies Act 2014 provides for an 18 month transition period during which existing private companies need to decide which type of entity best suits them. Those that elect not to convert during this period will be treated as a DAC for that period and at the end will automatically become a LTD.

    Table 2: Timeframe for Conversion.PDF

Click on the image to find out more on conversion.
 

Technical Releases

As an accountant you need to become familiar with the relevant sections of the new Act. To help with this Chartered Accountants Ireland has prepared some Technical Releases. These focus on Part 6 of the Act; (Financial Statements Annual Returns and Audit).
Download them here:

What is a Chartered Accountants Ireland Technical Release?

Find out more about our new publications, known as Technical Releases and Technical Alerts.

Top 5 FAQs

See Full FAQs
  1. When will the accounting and auditing requirements in Part 6 of the Companies Act 2014 come into effect?

    With limited exceptions, by virtue of the Companies Act 2014 (Commencement) Order 2015 (S.I. No. 169 of 2015).PDF all sections of the Act came into operation on 1 June 2015. The abovementioned exceptions are set out in the Companies Act 2014 Commencement. This means that, aside from those exceptions, the requirements of Part 6 in relation to statutory financial statements, statutory audit, audit exemption etc, apply to financial statements and directors’ reports approved on or after 1 June 2015.

    The limited exceptions are commenced with respect to financial years beginning on or after 1 June 2015.

  2. Are there any changes to the requirements relating to statutory financial statements and directors’ reports arising from the commencement of Companies Act 2014?

    While Companies Act 2014 was primarily a consolidation of the provisions of previous Companies Acts, members should note that there are a number of changes to the requirements relating to both statutory financial statements and directors’ reports. Please refer to Technical Release TR 02/2015 - Companies Act 2014 Financial reporting and related issues.PDF for details of changes.

  3. Does my company now qualify under the Companies Act 2014 to be exempt from having an audit?

    Where the qualifying conditions and other requirements are met (e.g. timely filing of annual returns), the following types of company can avail of audit exemption: a company limited by shares (‘LTD’); a designated activity company (‘DAC’); a guarantee company (‘CLG’) and A a private unlimited company (‘ULC’).

    In addition, the Companies Act 2014 now provides for companies that are members of groups and dormant companies to avail of audit exemption, subject to certain conditions.

    For details on the audit exemption provisions contained in the Companies Act 2014, please refer to Technical Release TR 06/2015 - Companies Act 2014 Audit Exemption.PDF

    You can find more about the audit exemption here.

  4. Under the Companies Act 2014, can my company revise financial statements that are incorrect?

    Yes. An innovation of the Companies Act 2014 is that it permits the revision of defective financial statements. Sections 366 to 379 set out requirements for the preparation, approval, audit and filing of revised financial statements or revised directors’ reports. The CRO sets out the procedures for filing the revised financial statements. Section 4 of Technical Release TR 05/2015.PDF provides some further information on the voluntary revision of financial statements.

  5. Are there any changes in the Companies Act 2014 relating to reporting on abridged financial statements?

    Please see section 3 of Technical Release TR 03/2015 - Companies Act 2015 Implications for statutory auditor’s reports on statutory financial statements.PDF for the changes in reporting on abridged financial statements. These include that where, under previous Companies Acts, two reports were required (under section 18(3) and 18(4) of the 1986 Act), a single report is now required under section 356. Appendix 3 to TR 03/2015 contains an illustrative report on abridged financial statements.DOCX. Also see here for more information on abridged financial statements.

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