Every January we set out ten points for our readers to consider from a company law and company secretarial practice perspective. These are the points we see practitioners having issues with but never get around to putting policies in place to ensure they don’t happen or changes that should be considered by your clients.
- Electronic Filing & PDF Financial Statements
- Posting to CRO & Returned documents from CRO
- Procedure for filing annual returns
- District Court Applications & the Companies (Statutory Audits) Bill 2017
- Unlimited Companies
- Beneficial Ownership Register
- New Constitutions
- One Director companies & Company Secretary
- Update your templates
- Due Diligence & Statutory Registers
1. Electronic Filing & PDF Financial Statements
The 1st June 2017 saw the introduction of mandatory e-filing and most companies and practitioners seemed to get through the busy October/November filing deadline ok. Because of the backlog in scanning in documents, companies are now finding issues with the annual returns and or financial statements that have already been filed or discovering the documents were not received on time and are now late.
2. Posting to CRO & Returned documents from CRO
Please use EXPRESS POST!! This is a time guaranteed delivery service and the only service CRO will stand over. Express Post is different to registered post which CRO will not stand over as it only registers the document and does not guarantee the date of delivery. Whoever goes to the post office to send your post should be advised of this particularly for sending audit exempt annual returns to CRO.
CRO have stopped returning annual returns by post. The return will be rejected and an email will be sent to the email address of the presenter. Please check this email address to ensure it is correct and that someone is monitoring these emails. Also check your Junk Folder as some anti-virus software class emails from CRO as a bulk sender and move this into Clutter or Junk folders. If rejected by CRO, the presenter will have 14 days to re-file the annual return, generate a new signature page and have it re-signed by the director and secretary and re-upload the financial statements within this 14 day period. Failure to do so will deem the return late. The original signature page should not be used, it needs a new submission number or will be rejected.
3. Procedure for filing annual returns
Nobody enjoys writing procedures! But they are vital when the outcome such as loss of audit exemption or late filing penalties, are the risks for not complying. We encourage all practitioners to have a procedure for managing all the company secretarial functions particularly filing the annual return and the financial statements incorporating the points above. You might not have fallen foul of a missed return yet but it can easily happen with someone being out sick or having just one person responsible for the filing process. Stick it on the to-do list!
4. District Court Applications & the Companies (Statutory Audits) Bill 2017
We highlighted the new Bill last year and its proposed changes to the Sec 343 applications for late filing of annual returns. The Bill proposes that companies that want an order to retain both the audit exemption and to avoid the late filing fees will have to apply to the High Court and only companies seeking to avoid the late filing penalties may apply to the District Court. It will be interesting to see if this Bill gets passed and we will keep you updated on the progress of the Bill.
5. Unlimited Companies
The Companies (Accounting) Act 2017 amended the definition of a Designated Unlimited Company meaning more companies may now have to file financial statements that previously were exempt. Unlimited companies should examine the new definition and take advice on what their options are.
6. Beneficial Ownership Register
We highlighted this in our list last year and as yet many companies have yet to establish a Beneficial Ownership Register. The establishment of the Central Register has not happened yet but it most likely will happen in 2018 and from then all companies will have to file the necessary information with the Central Register which will be maintained by the CRO.
Statutory Instrument No 560 of 15 November 2016, which required all corporate and legal entities to hold adequate, accurate and current information on their beneficial owner(s) in their own register, can be found here
Further information on the central register of beneficial ownership can be found here
7. New Constitutions
Approximately 25% of companies adopted a new constitution in the transition period of the Companies Act 2014. The companies that did not are now finding they are being required to update the constitution for various reasons in particular when dealing with the bank. The sample one page constitution does not appear to be suitable for the banks who are requiring specific requirements to be disclosed including provisions regarding borrowing powers.
8. One Director Companies & Company Secretary
We have seen a significant increase in the number of one Director companies in both new company formations and existing companies. These companies require a separate Company Secretary who should have the necessary skills or resources to act as Company Secretary which is leading to many of these companies engaging a company secretarial advisor to act as company secretary. In next month’s newsletter we will consider the main points to note when advising a client on a one director company.
9. Update Your Templates
Templates are the cornerstone of the provision of any service and company secretarial practice is no different. We constantly review our templates to ensure they are up-to-date and use these to continuously train our team. If you have not done a complete review of your templates now is the time to do so and concentrating on the AGM documentation would be a good start. If you do require templates you can browse ours here.
10. Due Diligence & Statutory Registers
A point that often gets overlooked is maintaining the statutory registers for a company but this normally only gets examined when there is a dispute or if the company is being sold. Often by this stage it's too late or may become costly for example if a shareholder (who everyone thought had transferred their shares) failed to complete the paperwork or have the register updated.
If you or your client are considering selling the business in future years now is the time to have these reviewed. Please don’t rely on what is filed in the CRO as this is often not the correct position and could end up costing you the sale of the business or a significant cost to fix the issue.
If you'd like to speak with us and get a head start on any of these issues Contact Us - we'd be happy to help