The Companies Act 2014 (Commencement) Order 2015 (S.I. 169 of 2015) was signed by the Minister for Jobs, Enterprise and Innovation, Richard Bruton TD, on 1 May 2015 and is available online on the Irish Statute Book website. As expected, the Commencement Order provides that most of the provisions of the Companies Act 2014 will come into operation on 1 June 2015. A small number of provisions will not come into force on that date.
Provisions not commenced by the Order
The provisions of the Act that are not commenced by the Commencement Order on 1 June 2015 are:
- the repeal of Part V of the Companies Act, 1990, which relates to insider dealing in securities admitted to a recognised stock exchange;
- the repeal of certain provisions relating to reporting and notice requirements in relation to cross-border mergers;
- the repeal of certain statutes, instruments or charters in relation to unregistered companies (including the Bank of Ireland Act Acts 1781-1935 and the Charter of the Governor and Company of the Bank of Ireland, the repeal of which is deferred until Bank of Ireland is re-registered as a company governed by the Act); and
- certain provisions relating to audit committees and financial statements (see below).
The position of certain provisions of the Act relating to audit committees and financial statements
The Commencement Order provides that certain provisions of the Act relating to audit committees and financial statements shall not apply to a company until the first day of the company's first financial year beginning on or after 1 June 2015. Those provisions are:
- the obligation of the directors of a large company to establish an audit committee or to explain in their directors' report their reasons for not doing so;
- the obligation of the directors of certain companies to include a compliance statement in their directors' report;
- the requirement that the notes to the statutory financial statements of a company disclose the aggregate amount of the gains by the directors and persons connected with each of the directors on the exercise of share options;
- the requirement that the names of directors who held office at any time during the financial year are stated in the directors' report; and
- the requirement of every director of a company to confirm in the directors' report that all 'relevant audit information' (defined as information needed by the company's statutory auditors in connection with preparing their report) has been provided to the company's statutory auditors.
Although the commencement of these provisions is deferred, we would recommend that companies take steps before the start of their next financial year to make sure that they are ready to comply with these provisions when they come into operation.
Until these provisions come into operation, the similar provisions contained in the Companies Acts 1963 to 2013 will continue to apply. All other provisions of the Act relating to financial statements, including those relating to the preparation and auditing of financial statements and the extension of audit exemption to additional company types, come into force on 1 June 2015. The Act will apply to all financial statements that are signed by the directors on or after 1 June 2015.
Transition period for re-registration
As expected, the 18-month transition period during which an existing private company limited by shares must decide upon the form of company regulated by the Act to which it will convert commences on 1 June 2015.
We at Ronan Daly Jermyn would be happy to provide advice and support to our clients in assessing the most appropriate form of company under the Act to suit their business needs. Please do not hesitate to contact any member of our Corporate and Commercial team with any queries that you may have in relation to choosing the appropriate type of company or if you have any other queries in relation to the Act.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.