With some exceptions, Irish companies are required to have at least one director who is resident in a member state of the European Economic Area (EEA).

If the UK leaves the EU on 29 March without a deal, Irish companies who rely on a UK resident director to fulfil this requirement will need to take action.

Exceptions

The requirement to have at least one EEA-resident director does not apply where the company: -

  1. has a bond in place to the value of €25,000, to ensure the discharge of some or all of the company’s liability in respect of certain fines or penalties under the Companies Act 2014 (Act); or
  2. the company obtains a certificate from the Registrar of Companies pursuant to section 140 of the Act that the company “has a real and continuous link with one or more economic activities that are being carried on in the State” (section 140 certificate).

No deal

If the UK leaves the EU without a deal it will no longer be a member of the EEA, which will result in many Irish companies no longer having an EEA-resident director. In such a case, the company should

  • appoint a new EEA resident director
  • lodge a bond with the Companies Registration Office (CRO) or
  • obtain a section 140 certificate.

Bond

The bond must be in the form prescribed by the CRO and is required to be valid for a minimum period of 2 years. In the case of a no-deal Brexit which gives rise to the requirement for a bond, the bond ought to commence with effect from 29 March 2019 or earlier.

Section 140 certificate

In order to obtain a Section 140 certificate, the company will have to satisfy the Revenue Commissioners that:

  1. the company carries on a trade or is managed from a place of business in Ireland; or
  2. the company is a member of a group of companies one of which carries on a trade or is managed from a place of business in Ireland.

Application for a section 140 certificate must be accompanied by a statement from Revenue, made within two months of the date of the application, that it has reasonable grounds to believe that the company has such a link.

It is a criminal offence not to have at least one EEA-resident director of an Irish-registered company and the company and every officer of the company who is in default may be liable for prosecution.