Companies (Accounting) Bill 2016 passed by both Houses of the Oireachtas: enactment is imminent
Further to our recent bulletins on the Companies (Accounting) Bill 2016, which will amend the Companies Act 2014, the Bill was passed by Seanad Eireann (having previously been passed by Dáil Eireann) on 9 May 2017. The next step is for the Government to send the Bill, as passed by both Houses, to the President for signature.
The President normally has between 5 and 7 days within which to sign the Bill, following which it will become the Companies (Accounting) Act 2017. However, the existing citation of the Companies Act 2014 will not be affected by the enactment of the Bill.
Following signature, a commencement order will be made in the usual way by statutory instrument by the Minister for Jobs, Enterprise and Innovation, in order to bring the legislation into force. The current expectation is that this will happen shortly after signature by the President. Consequently, it is possible that the amendments to be made to the 2014 Act by the Bill may be in force later this month.
At the moment, the expectation is still that the amendments made by the Bill to Section 1274 of the 2014 Act, designed to restrict the ability of certain ULCs (i.e. those which are not "designated ULCs") to be able to avoid having to file their financial statements with the Companies Registration Office along with their annual return, will only apply with respect to financial years commencing on or after 1 January 2017. However, please note that this is not set out in the Bill, and will likely be dealt with in the commencement order.
In addition, as previously flagged in an earlier update, one of the new criteria that the Bill introduces, in order to qualify for the exemption from having to file financial statements, is that the unlimited company is not a holding company of one or more limited liability subsidiaries. However, on foot of an amendment agreed during the legislative process, the application of this particular provision will be deferred, and will only come into operation on 1 January 2022 for any financial year which commences on or after that date. The effect of this change would appear to be that an unlimited company can continue to be a holding company of one or more limited liability subsidiaries until this provision comes into operation. However, it would appear that the ULC will also have to ensure that it does not otherwise fall within the definition of "designated ULC", having regard to the remaining provisions of Section 1274, as proposed to be amended.
We will provide you with a further update when the Bill has been signed and is in force.
For further information please contact Jack O'Farrell.
Date published: 12 May 2017