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What business structures are available in Northern Ireland?
The following section outlines the different business structures currently operating in Northern Ireland, starting with a company
A company is a legal form of business which is a separate legal entity and is therefore separate and distinct from those who run it. In the event of litigation the company is liable (as opposed to the shareholders or owners). The Companies House is the central repository of public statutory information on Northern Irish companies. The Companies Act 2006 regulates the formation and dissolution of companies in Northern Ireland. Its commencement on 1st October 2009 has provided a single company law regime that applies to the whole of the United Kingdom. Companies are UK companies rather than GB or Northern Ireland companies, and the same legislation applies to all. As a consequence, Companies Registry Northern Ireland (CRNI) has integrated with Companies House, under the Department for Business, Innovation and Skills (BIS).
Generally one or more persons are permitted to form a company for any lawful purpose by subscribing to a memorandum of association. A company will not be incorporated unless it appears that the company, when registered, will carry on an activity in Northern Ireland. Prior to the formation of a company, the Memorandum of Association (sets out the company objectives) and the Articles of Association (regulates the manner in which the affairs of the company are conducted) are required. Once formed, every company is required to keep 'proper books of account'.
- Limited Company
- Unlimited Company
- Partnership
- Foreign Companies
For more details on any of these company types, download the brochure.
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What are the filing requirements for my company?
All Northern Irish companies and some foreign companies operating within Northern Ireland are required to file an annual return to the Companies House at least once every twelve months. Depending on the type of company incorporated, accounts may also be required to be filed with the annual return, as outlined in the brochure.
Every company must prepare accounts that report on the performance and activities of the company during the financial year. This starts on the day after the previous financial year ended or, in the case of a new company, on the day of incorporation. Financial years are determined by reference to an accounting reference period. The financial period ends on the accounting reference date. Companies have the choice to make up their accounts to the accounting reference date or a date up to seven days either side of it if this is more convenient.
All Northern Irish companies, whether trading or dormant, are required to file an annual return with the Companies House at least once every twelve months. The annual return contains details of the company’s directors, secretary, registered office, shareholders and share capital. The annual return must be filed within 28 days after the anniversary of incorporation of a company or of the anniversary of the made-up date of the last annual return. As outlined in teh brochure, different types of companies are subject to individual filing requirements but in most cases audited accounts must be filed with the annual return.
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What are the audit requirements in Northern Ireland?
The majority of Northern Irish companies require an audit by independent accountants, unless they are entitled to claim exemption on the basis of size, as discussed in the brochure. An audit is the process of checking that the way an organisation presents information about its financial position is true and fair. True and fair means that in the auditor’s opinion the company’s financial statements offer a true and fair view of its actual financial position and that any assumptions they include are reasonable.
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What are the financial reporting requirements in Northern Ireland?
The financial statements of most Northern Irish companies may be prepared in accordance with either International Financial Reporting Standards (IFRS), as adopted by the EU, or in accordance with generally accepted accounting standards in the UK (UK GAAP) as issued by the Accounting Standards Board (ASB). EU Regulation requires all listed EU groups to prepare their consolidated financial statements in accordance with standards and interpretations issued (or adopted) by the International Accounting Standards Board (IASB) that have been adopted in the EU (EU-adopted IFRS).
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Future of UK GAAP
In October 2010, the UK Accounting Standards Board (ASB) began setting out proposals for the future of financial reporting in the United Kingdom and Ireland. Revised proposals published at the end of January 2012 propose replacing all extant FRS’s, SSAPs and UITF abstracts in the UK and the Ireland with a single FRS, introducing a reduced disclosure framework for the financial reporting of certain qualifying entities and retaining the ‘Financial Reporting Standard for Smaller Entities’ (FRSSE) with a further consultation on how to update it following the European Commission proposals for the future of financial reporting for small and micro House companies.
The ASB is proposing to adapt IFRS for SME’s into FRS 102 ‘The Financial Reporting Standard applicable in the UK and Ireland’. In this way, the UK and Ireland will operate under one consistent, international accounting framework. The proposals are aligned with the requirements of company law and do not extend the application of EU-adopted IFRS beyond that set out in company law or other relevant Regulations. The proposals are to apply for accounting periods beginning on or after 1 January 2015. Early application is permitted for accounting periods beginning on or after the date of issue of corresponding standards, subject to the additional requirement for a public benefit entity that it must also apply a public benefit entity SORP which has been developed in accordance with those standards.
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