As Brexit draws nearer, you may need to give consideration to the arrangements your company has in place in relation to its financial statements.
The Companies Act 2014 (the “2014 Act”) provides that an Irish registered company which is a subsidiary of an undertaking registered within the EEA may avail of an exemption from filing its financial statements with the Companies Registration Office if it satisfies certain criteria, being that its holding company provides an irrevocable guarantee of not only the subsidiary’s liabilities but also all commitments entered into by that subsidiary. Where such guarantee has been provided and the exemption exists, the subsidiary company is entitled to file the consolidated accounts of its holding company.
Upon the departure of the UK from the EEA, this exemption will no longer be available to Irish companies if its holding company is a UK registered company and they will be required to file their own financial statements or give consideration to alternative options if the desire is to protect potentially sensitive financial information.
Another consequence of Brexit to consider is your financial year end. Under the 2014 Act, Irish companies are permitted to change their financial year end once every 5 years, however there is an exception to this rule if their holding company is an EEA undertaking and the option is available to change their financial year end whenever their holding company does to effectively mirror it. However, if their holding company is UK registered, this will no longer be an option post Brexit and they will revert to the 5 year rule.
A no deal Brexit may also affect the audit of your financial statements if the auditors appointed to your company are UK registered and they may find that they are no longer permitted to carry out audits of the financial statements of Irish companies.