The Bill amends the Companies Act 2014 and includes three types of measures:
Those unlimited companies which will be obliged, from the effective date (not yet known), to file publicly available financial statements is set out at section 76 of the Bill.
The provisions incorporate both the circumstances in which a UK unlimited company is required to file and also incorporate wider principles which were set out in the underlying 2013 Accounting Directive. This is to require unlimited companies to file financial statements which ultimately, directly or indirectly, have members which are in a form which affords limited liability protection.
Broadly, as currently drafted, the financial statements filing obligations would appear to apply to an Irish incorporated unlimited company which:
While companies must present full financial statements to their shareholders at the Annual General Meeting, depending on the type and size of a company, it may have the option of filing abridged financial statements when it files its annual return.
In that regard, the Bill proposes a new concept of a micro company and increases the existing thresholds for companies to be regarded as small or medium.
A company must meet two out of the following three criteria to be regarded as micro, small or medium both for the relevant financial year and the immediately preceding financial year (unless the financial year concerned is the company's first financial year).
|Balance Sheet Total||€350,000||€6,000,000||€20,000,000|
|Average No. Employees||10||50||250|
The Bill generally will take effect from a date to be specified in a Ministerial Order (which has not yet been made). The effective date for filing financial statements for designated unlimited companies is not yet known and consequently it is possible that, once enacted, such unlimited companies would be required to file financial statements when filing their next annual return.
The Bill is due to be reviewed by the Oireachtas once the Dáil and Seanad resume sessions in the last week of September. As yet, it is not known when precisely the Bill will be scheduled for debate.
It is possible for companies to apply certain defined measures for earlier financial years (than those set out in the Ministerial Order). These are set out at section 4 of the Bill and, in the main, comprise relieving provisions which could, for example, allow micro and small companies to avail of a number of reduced reporting and simplified financial statements preparation requirements set out in the Bill.
If you would like to learn more about the potential impact of these measures on you and your business, and/or options when it comes to filing financial statements on public record, please feel free to contact me or any member of your KPMG client service team.