The Companies (Accounting) Bill (the “Bill”) was published on 5 August. The main purpose of the Bill is to transpose Directive 2013/34/EU on financial statements and related reports of certain types of undertakings (the “Directive”) into Irish law.
The Bill amends Part 6 (financial statements, annual return and audit) of the Companies Act 2014 (the “2014 Act”), largely to reduce the accounting compliance requirements of smaller companies, to be known as “micro companies”.
In addition, as required by the Directive, Section 76 of the Bill amends Section 1274 of the 2014 Act to provide for a revised definition of “designated ULC” designed to eliminate the existing non-filing of accounts exemption for certain unlimited companies. The new definition is very broad and provides that a ULC will be required to file financial statements if at any time during a financial period:
- it is a subsidiary or holding company of a limited company (wherever incorporated)
- it is a credit institution or insurance undertaking or holding company of a credit institution or insurance undertaking
- all of its members are companies limited by shares or guarantee, unlimited companies each of whose members is a limited company, partnerships each of whose members is a limited company, limited partnerships each of whose general partners is limited or any combination of these
- the direct or indirect members of the ULC comprise any combination of ULCs and bodies set out in 3 above such that the beneficial owners enjoy the protection of limited liability
- references to a limited company, unlimited company, partnership or a limited partnership are deemed to include any body which is not governed by the law of the State which is comparable to those types of entity.
Payments to Governments
The Bill also introduces a new Part 26 into the 2014 Act, in order to transpose certain provisions in the Directive, requiring companies active in mining and extractive industries and in the logging of primary forests to report payments to governments.
Other Amendments to 2014 Act
The Bill provides for some further (technical) amendments to the 2014 Act but does not (as was hoped) deal with many of the anomalies identified in the Act. It is expected that at least some of these anomalies will be covered in the next draft of the Bill. The Oireachtas is on recess until the end of September, so not much will happen in the short term, even though the Directive was due to be transposed before 20 July 2015.