The Companies (Accounting) Act 2017 (the “2017 Act”) substantially amends, updates and supplements the Companies Act 2014 (the “Companies Act”). The 2017 Act came into force with effect from 9 June 2017 (other than the provisions in relation to external companies) with the new accounting requirements applying in respect of financial years which commence on or after 1 January 2017. The CRO has also confirmed that the related filing obligations will only apply in respect of financial years which commence on or after 1 January 2017.

The 2017 Act results in a number of key changes for unlimited liability companies (“ULCs”), which are set out in this note:

FILING FINANCIAL STATEMENTS

» Changes to filing obligation

Under the Companies Act only “designated ULCs” are obliged to file financial statements in the Companies Registration Office (“CRO”). The 2017 Act widens the parameters for classification as a “designated ULC”, as a result bringing significantly more ULCs within the filing regime. 

» Who will the changes impact?

Prior to the 2017 Act, many ULCs were able to rely on an exemption from filing financial statements where their membership included either: (1) an unlimited liability entity incorporated in a jurisdiction outside the EEA (e.g. Isle of Man), even where the ultimate shareholders had limited liability, or (2) a natural person. As a result “non-disclosure structures” were often designed using an Irish ULC. The revised criteria for a “designated ULC” will mean that ULCs which are owned or controlled (directly or indirectly) by a limited liability company will now fall within scope for filing obligations. ULCs who do not fall within the criteria of a “designated ULC” will continue to remain outside the filing regime.

» ULC holding companies

The 2017 Act provides that unlimited companies which are holding companies of undertakings whose members have limited liability are “designated ULCs” (and as a result required to file financial statements in the CRO) but this provision will only take effect for financial years commencing on or after 1 January 2022.  

ULC NAME CHANGE EXEMPTION

The Companies Act requires that the registered name of all unlimited companies must end in “unlimited company” or “UC” (or the Irish equivalent). Previously, ULCs could apply for an exemption from the name change requirement (a name change often necessitates logistical and costly changes, including company stationery, websites, IP registrations etc.). The Minister will no longer be able to grant such exemptions. ULCs currently availing of the exemption will remain unaffected, but will not be able to renew the exemption on expiry of the 5 year exempt period.

BRANCH OF EXTERNAL UNLIMITED LIABILITY BODY

Under the Companies Act a foreign limited liability body corporate is required to register (and as a consequence file financial statements) with the CRO where it has an operation in Ireland which would constitute a “branch”. The 2017 Act extends this obligation to any foreign unlimited liability entity that is a subsidiary of a limited liability body corporate. This provision of the 2017 Act has not yet come into force, but once it does it will have the effect of bringing more foreign companies within the branch filing regime.