Impact of Brexit on Irish registered companies
EEA-resident Director Requirement
The Companies Act 2014 (Act) requires an Irish registered company to have at least one director resident in an EEA state. This means that a company currently relying on a UK resident director will need to make changes to ensure ongoing compliance with the requirements of the Act.
For many companies, the most obvious course of action would be to replace the UK resident director with an EEA director or appoint to its board an additional director who is resident in the EEA.
Alternatively, a company can avoid the need to have an EEA resident director in place if the company holds a bond to the value of €25,000, valid for at least two years. This bond can be obtained from a bank, building society, credit union or insurance company. The bond has to be filed with the Companies Registration Office (CRO).
A company can obtain a certificate under section 140 of the Act (Section 140 Certificate) from the Irish Registrar of Companies to state that the company has a real and continuous link with an economic activity being carried out in the state of Ireland, if the Irish Revenue Commissioners are satisfied that this is the case. This will enable the company to avail of an exemption from having an EEA resident director.
To prove a “real and continuous link” a company Revenue must be satisfied of one or more of the conditions of Section 140(9) of the Act:
The company affairs are affairs of the company are managed by one or more persons from a place of business established in Ireland and those persons are authorised by the company to act on its behalf;
- the affairs of the company are managed by one or more persons from a place of business established in the State and that person or those persons is or are authorised by the company to act on its behalf;
- the company carries on a trade in the State;
- the company is a subsidiary or a holding company of a company or other body corporate that satisfies either or both of the conditions specified in paragraphs (a) and (b); or
- the company is a subsidiary of a company, another subsidiary of which satisfies either or both of the conditions specified in paragraphs (a) and (b).
The application to the Revenue Commissioners for its written statement must be accompanied by a copy of the company’s most recent financial statements.
Following this and if approved, a Form B67 should be submitted to the CRO within two months of the date of the Revenue Commissioners Statement. The exemption from the requirement to have an EEA resident director will apply from the date the Section 140 Certificate is issued by the CRO.
Subsidiary Exemption to File Financial Statements
The Companies Act provides an exemption to a subsidiary to file its financial statements with the CRO where there is in force an irrevocable guarantee from the parent company covering liabilities and commitments of the subsidiary in respect of the financial year. Where such a guarantee is in place, provided certain conditions are adhered to, the subsidiary may file the financial statements of its parent company in place of its own. This exemption only applies where the parent company is established under the laws of an EEA state. Therefore, Irish registered subsidiaries of a UK parent company will no longer be in a position to rely on this provision.
Year End Date
A company can change its financial year end date only once in every 5 years. This does not apply if the company is changing its financial year end date to align with a subsidiary or holding company of the company incorporated in another EEA member state. This exemption no longer applies to companies that are a subsidiary or a holding of a company incorporated in the UK.
UK Companies With Irish Registered Branches
UK registered companies that have a branch in Ireland will have different filing obligations with the CRO following the departure of the UK from the EEA. At present, a branch of an EEA-registered company is required to file certain company information with the CRO when setting up as a branch in Ireland, together with the accounting documents filed in the company’s home member state on an annual basis. The filing obligations for non-EEA companies operating as a branch in Ireland, do vary in some areas. For example, non-EEA companies are obliged to file a statement with the CRO indicating the amount of the called-up share capital of the company.
