We are delighted to present this issue of Connect which deals with 2023 annual company law compliance and related matters. In addition to annual reminders, read about the latest developments and insights on practical company law matters. Enjoy!
For companies who have a 31 December financial year end, the deadline for filing your company’s 2023 annual return and financial statements for the financial year ended 31 December 2022 in the Companies Registration Office (“CRO”) and holding your 2023 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. In addition, due to possible delays with the new CRO requirement for filing directors’ PPSNs with annual returns (see later article), companies should attend to filings sooner rather than later.
Two measures contained in the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 (the “Miscellaneous Provisions Act”) have been further extended to 31 December 2023.
The Miscellaneous Provisions Act will continue to make temporary provisions for increasing the threshold at which a company is deemed unable to pay its debts to €50,000 and allow companies, to hold their annual general meetings (AGMs) and general meetings by electronic means until 31 December 2023.
In response to the Covid-19 Pandemic, the CRO granted a temporary amnesty to Irish companies who had difficulty meeting their statutory annual company law compliance filing obligations, by placing a moratorium on involuntary strike off’s.
The CRO have recently recommenced enforcement and have now started to issue 10-week warning letters to those companies who are most out of date with their annual returns and financial statements filing obligations. Companies out of date with their annual return and financial statements filing obligations should seek to prepare the necessary documentation and make the appropriate CRO filings as soon as possible to prevent enforcement action.
If your company is out of date with its annual return and financial statements filing obligations and is at risk of involuntarily strike off, or if your company has been struck off the CRO register and needs to be restored, please contact us for advice and assistance.
The CRO has published its Annual Report for 2022 and some key points to highlight include:-
On 22 November 2022, a ruling by the Court of Justice of the European Union overturned the provisions of Directive (EU) 2015/849 as amended by Directive (EU) 2018/843 providing public access to beneficial ownership information. Accordingly, access to the Central Register of Beneficial Ownership (“CRBO”) by designated bodies and the general public was suspended on 28 November 2022, with access to designated bodies restored on a restricted basis on the 22 December 2022.
The Minister for Finance signed a new Statutory Instrument S.I No 308 of 2023 on 13 June 2023, amending the European Union (“EU”) (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (the “Principal Regulations”).
The amendments to the Principal Regulations include that access to restricted information on the CRBO previously afforded to the public is now revoked and limited only to persons who can demonstrate that they have a legitimate interest in accessing that information.
Although it is acknowledged, an amendment to the Principal Regulations was required following the ECJ ruling (on the basis that public access was considered in breach of the right to privacy and protection of personal data under the EU Charter and was disproportionate to the objectives of AMLD4 and AMLD5), challenges will now be faced both by those seeking access to the CRBO and by the Registrar in considering and responding to requests on a timely basis. AMLD5 was influenced by the terrorist attacks in 2015/2016 in Paris and Brussels and the leaks from the Panama Papers. Its intention was to improve transparency in financial transactions to include public access to the identity of beneficial owners of corporates. Consequently, it is difficult to see how those aims can be met in light of these changes.
The Register of Beneficial Ownership (“RBO”) began prosecuting non-compliant entities for failure to file beneficial ownership information before the Dublin Metropolitan District Court in the second quarter of 2022. A total of five entities were convicted and fined €3,000, one entity was convicted and fined €1,000 and a further five entities pleaded guilty and the Probation Act was applied.
The number of Discrepancy Notices received by the RBO in 2022 also increased significantly when compared with the same period last year. A total of 3,426 discrepancy notices were received in 2022 compared to 714 in 2021. Furthermore, the number of non-compliance notices also increased sharply from 1,204 in 2021 to 2,387 in 2022.
The RBO has attributed these increases to the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 Act which requires designated persons such as banks, financial institutions and other service providers to inspect the RBO as part of their customer due diligence before establishing a business relationship with a customer, and to report any discrepancies and non-compliance to the Registrar.
Accordingly, it has never been more important for companies to ensure that the beneficial ownership information on file with the RBO is accurate and up to date, in order to avoid any delays or difficulties which may arise as a result of financial institutions and service providers carrying out due diligence checks.
The RBO has published its 2022 Annual Report. Some of the key observations contained in the report are summarised below:-
The Companies (Corporate Enforcement Authority) Act 2021 amended the Companies Act 2014 and amongst other things has introduced a new requirement 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. The changes aim to increase the reliability of the data that identifies the directors of a company.
With effect from 11 June 2023, all directors of Irish registered companies are required to file the details of their personal public service number (“PPSN”) or RBO Transaction Number with the CRO when;
In cases where a director does not have a PPSN or an RBO Transaction Number (under the beneficial ownership legislation), it will be necessary to apply to the CRO for an Identified Persons Number by completing and filing a Verification of Identity Form.
We recommend that companies start the process of compiling details of their directors’ PPSN’s/ RBO Transaction Numbers and conduct a thorough review of director information currently held on CRO records to identify any cases of inconsistencies between the information held on CRO records and the name and details under which the PPSN is registered.
Companies should also establish whether any of their directors do not hold a PPSN or RBO Transaction Number and establish if they need to complete a Verification of Identity Form in order to obtain an Identified Persons Number.
In July 2023, shortly after the media revealed a scheme for persons to become directors of companies they knew nothing about, the Corporate Enforcement Authority published guidance to the public on the considerations, risks and consequences of accepting corporate directorships.
The purpose of the note is to provide high-level guidance to members of the public that might be approached to become directors of companies about which they know little or nothing about.
We hope you found this issue of Connect informative and engaging. If you have any questions or would like to know more about any topic, please feel free to contact our team below. We look forward to hearing from you.