New Company Law Rules for Directors and Company Secretaries from 01/06/2015
New Company Types
DAC (Designated Activity Company)
- 2 directors
- Memorandum & Articles
- Must hold AGM
Every existing Ltd. (private company) will be treated like a DAC unless they complete the procedure to convert to Ltd. in the transitional period (01 /06/2015 to 30/11/2016)
New Ltd. Company
- Single Director Company
- Constitution instead of Memo and Articles
- No AGM necessary
Charities, voluntary organisations and management companies
- They must change their name to include “Company Limited by Guarantee”
- Must change their name to include “unlimited Company”
Directors are you aware of the New Company Law changes being introduced or 1st June 2015. The duties and responsibilities of every company director will increase from that date. The changes affect every company structure and there is an 18-month transitional period for every company to review its status. HFS Accountants highlight some of the main changes.
Increasing audit exemption to include companies with turnover below €12M (was €8.8m) and balance sheet value below €6m (was €4.4m) and less than 50 employees. If a company was late filing their returns they lost their audit exemption for 2 years which was very costly. Now companies may apply to the district court to RESTORE audit exemption.
Enhanced Enforcement Applications
In the past many creditors suffered by companies not paying their debts. Legislation will soon be introduced which will allow creditors bring proceedings against directors personally.
Legalising Loans to Directors
Existing rules for director’s loans not exceeding 10% of company’s assets may now be legalised, if members approve special resolution and sign statutory declaration.
Directors will have a duty to ensure that the person appointed as company secretary have the skills necessary to enable them maintain and keep the records required under this act. The company secretary must also consent and acknowledge their legal duties.
The new single director company will be beneficial to many small companies. Creditors will have enhanced powers against unpaid debts. The audit exemption is increased. However the protection of limited liability can be pierced and directors may be held personally liable in certain defined circumstances. Therefore it is more important than ever to acknowledge your role and responsibility as a company director in maintaining financial records, cashflow and monthly management accounts.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice.