Amendment of small company audit exemption

Another section of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 (the 2024 Act) commenced last week, on 16 July 2025. Section 22 inserts new wording into section 363 of the Companies Act 2014 (the 2014 Act), which previously provided that a company automatically lost its audit exemption following its first failure to deliver an annual return.

The new section 363 gives these small companies a second chance. A company will no longer lose its audit exemption after it fails to file an annual return in compliance with section 343 of the 2014 Act on one occasion within a five-year period. 

The new regime applies subject to the following conditions:

• A company will not be entitled to an audit exemption for the two years immediately following a financial year where it (i) failed to deliver an annual return in compliance with the 2014 Act, and (ii) previously failed to file an annual return in compliance with the 2014 Act in any of the previous five financial years.

• Failure by a company to file its first annual return, or failure to file its annual return before 16 July 2025, shall be disregarded for the purposes of this section.

Outstanding provisions of the 2024 Act

While much of the 2024 Act has now been commenced, a number of sections still await commencement. Broadly, these outstanding sections relate to the following:

• a new regime for registration of electronic filing agents

• empowerment of the Companies Registration Office (the CRO) to request the notification of certain resolutions in a prescribed form and manner (such as those relating to the summary approval procedure) 

• provisions regarding the delivery of information by and to receivers

• amendments to the rescue process for small and micro companies (otherwise known as the Small Companies Administrative Rescue Process (SCARP))

• voluntary filing, with a company's annual return, of information on the gender make-up of a company's board of directors 

• amendment of the Registration of Business Names Act 1963 to permit the Minister to prescribe a fee for the provision of documents to high volume users of the CRO

These provisions are expected to commence in the coming months.

Date published: 22 July 2025