September 2023
For companies who have a 31 December financial year end, the deadline for submitting your company’s financial statements for the financial year ended 31 December 2021 together with your September 2022 annual return in the Companies Registration Office (“CRO”) and holding your 2022 Annual General Meeting is fast approaching.
Now is the time to ensure that financial statements have been finalised, Annual General Meetings have been organised and that annual return documentation has been prepared and is in order.
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The Companies (Miscellaneous Provisions) (Covid-19) Act 2020 which was to initially apply for an interim period to 31 December 2020 has now been extended to 31 December 2022 following government approval.
The Act will continue to provide welcome assistance to companies holding virtual general meetings for the calendar year 2022.
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Following suspension of enforcement activities due to the COVID-19 pandemic, the CRO have indicated that they will recommence prosecution and involuntary strike off against companies that are late in filing annual returns. They have also advised that there is currently no plan to reopen the public office. Additional forms have been added to the mandatory e-filing list and with effect from 1 March 2022, a total of 18 Statutory Forms can no longer be filed in hardcopy form and must be filed electronically with the CRO. Amongst others, Statutory Forms G1, G2 and H15 must now be filed electronically.
The CRO has also published its Annual Report for 2021 and some key points to highlight include:-
Click here to read the CRO’s Annual Report in full.
The Registrar of Beneficial Ownership of Companies and Industrial and Provident Societies (“RBO”) recently brought its first prosecutions for failure to file on the RBO Central Register before Dublin Metropolitan District Court. Five entities were convicted, and each was fined €3,000. Four other entities pleaded guilty and the Probation Act was applied.
Recent experience shows an increase in clients receiving Discrepancy Notices in relation to RBO filings highlighting the importance of ensuring the beneficial ownership information filed with the RBO is accurate and up to date to avoid any delays or difficulties with financial institutions and service providers.
The RBO has also published its 2021 Annual Report. Some of the key observations contained in the report are summarised below:-
Click here to view the 2021 RBO Annual Report.
The Central Register of Beneficial Ownership of Trusts (“CRBOT”) was established in 2021 pursuant to The European Union (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2021. CRBOT contains details of relevant trust and their beneficial owners. There is an obligation on trustees to submit these details to Revenue, who manage CRBOT.
The scope of the Regulations is far and wide and extends to nominee arrangements, the most common being where an individual holds shares in a company for the benefit of another.
As an update, the Revenue have suspended the registration of UK trusts with CRBOT.
We are aware of UK trusts holding offshore bonds that are administrated in the Republic of Ireland by an Irish investment manager. Those trusts are considered to have a 'business relationship' in Ireland and are therefore required to register on CRBOT. This requirement applies to UK trusts even where they are registered with the UK Trust Registration Service.
CRBOT makes no exception for a trust already registered in the UK, as the UK is no longer part of EU. Therefore, CRBOT requires trustees of trusts which hold Irish land or real property or has a business relationship in Ireland to register.
Unless they use an agent to file, the difficulty for UK Trustees (and indeed any non-Irish Trustee) is that they have to be registered on ROS to be able to file and that involves obtaining a TAIN. Revenue are working on simplified ROS access and CRBOT registration for non-resident trustees during which time no penalties will be levied.
On 7 July 2022 the establishment of a new watchdog to crack down on corporate wrongdoing was announced by An Tanaiste. The Corporate Enforcement Authority (“CEA”) is the new statutory independent agency to investigate and prosecute breaches of company law.
Replacing the Office of the Director of Corporate Enforcement, it has been allocated additional staff and an increased budget. Some of its activities so far include arresting a man for company law offences (filing of fake annual returns with the CRO), directing criminal charges against 2 individuals for alleged breaches of a restriction and disqualification order respectively and issuing an information notice on rights of access to the Register of Members of a company (including their view of Data Protection concerns on such access).
During the last 12 months, the press has reported on the creation of fake firms using an individual’s details without their knowledge or consent and real addresses of genuine businesses that had no connection to the proposed firms. As a consequence of this and other issues, the CRO will introduce a measure to validate the identity of directors to improve the accuracy and integrity of company information held on the Register of Companies and reduce the risk of identity theft.
Section 35 of the Companies (Corporate Enforcement Authority) Act 2021 amended the Companies Act 2014 by inserting a new section 888A requiring directors to file details of their personal public service number with the CRO. It is expected that this requirement will be commenced in early 2023. Where a director does not have a personal public service number and is not required to have one, the Registrar of Companies is to set out the information to be provided concerning the identity of the director.
Salvador Nash and Ronan Rock of our Legal Services team explore the issues.
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The Economic Crime (Transparency and Enforcement) Act 2022 became law in the UK on 15 March 2022. This new legislation introduces a number of new obligations, some of which apply to Irish companies that own land in the UK.
The legislation creates a requirement for any “overseas entity” which owns a “qualifying estate” in the UK bought on or after 1 January 1999 to register with Companies House and provide beneficial ownership information. This requirement extends to all overseas entities (including trusts).
The Register of Overseas Entities was launched on 01 August 2022 and the service to register an overseas entity is now open.
The register is publicly accessible and there is an annual requirement for overseas entities to update their register every 12 months.
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The rules in relation to beneficial ownership and accounts disclosure continue to become increasingly complex and are now fundamental to the basis on which businesses must operate. In light of the broader geopolitical environment, Andrea Sherlock and Michael Moore of our Legal Services Team share some practical insights to ensure full compliance so that business critical transactions are not unnecessarily delayed.
Click here to listen to the podcast series.
The pace of change is challenging leaders like never before. To find out more about how KPMG perspectives and fresh thinking can help you focus on what’s next for your business or organisation, please get in touch with Aoife Kernan or Salvador Nash of our KPMG Law LLP team. We’d be delighted to hear from you.
