Changes to the Corporate Law is on the Way for Irish Businesses

Corporate law in the Republic of Ireland is developing due to changing business practices and regulations. To help businesses adhere to all the upcoming legislation updates, in this article we will break down The Charities Amendment Act 2024, General Scheme of Companies (Corporate Governance, Enforcement, and Regulatory Provisions) Bill 2024, and General Scheme of the Registration of Limited Partnerships and Business Names Bill 2024.

Сhanges in Irish Company Law for Companies

The General Scheme of Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 (hereafter referred to as the Companies Bill) was officially published in March 2024, and it is anticipated to be enacted by the end of the current year. This legislation aims to amend the existing Companies Act 2014, which provides the regulatory framework for companies registered in Ireland. The introduction of the Companies Bill signifies an important development in corporate governance, addressing both contemporary challenges and modernising existing provisions.

Key Changes and Provisions of the Companies Bill: 

• The Companies Bill incorporates certain measures from the Companies (Miscellaneous Provisions) (Covid-19) Act 2020, which it will supersede. Under this legislation, companies are granted the flexibility to hold meetings virtually, allowing participants to join remotely without the need for a physical presence.
• The Companies Bill also facilitates the execution of documents under seal in counterpart, whereby these will be regarded as a single document. This provision, which was initially introduced as a temporary measure during the Covid-19 pandemic, will now be permanently established.
• The Corporate Enforcement Authority will be granted enhanced powers and a higher status, including expanded surveillance capabilities. These improvements are similar to the surveillance powers currently held by the Revenue Commissioners and An Garda Síochána.
• The Companies Bill streamlines the receivership process by requiring that a receiver’s fees and costs be disclosed to shareholders or creditors within seven days upon request. It also mandates additional details on Form E8 at the receiver’s appointment and reduces the time for delivering the final Form E9 to the Registrar to seven days, down from thirty days, after the receiver ceases to act. Receivers will also be granted the right to remuneration, aligning their rights with those of liquidators.
• Under the Companies Bill, a small company that fails to submit its annual return to the Companies Registration Office (CRO) more than once within five years will lose the right for audit exemption — a change from the current rule, where a single missed filing results in the loss of exemption.
• The Companies Bill specifies that for a merger involving multiple companies, at least one must be an LTD or a DAC, which expands the current requirement of just an LTD. Additionally, it will enable a single transaction merger for wholly-owned subsidiary groups, thereby simplifying the existing multi-transaction process.
• The Companies Bill also introduces a new system that allows Registered Office Agents to remove their address from a company’s records due to non-compliance or unpaid fees.
• Finally, the Companies Bill includes three additional grounds for involuntary strike-off:
• Not reporting a change in the registered office;
• Absence of a recorded company secretary; and
• Failing to submit beneficial ownership details to the central beneficial ownership register (RBO).

These provisions are designed to strengthen compliance and ensure that companies maintain accurate and up-to-date records as part of good governance practices.

Changes in Irish Company Law for Limited Partnerships & Business Names

The General Scheme of the Registration of Limited Partnerships and Business Names Bill 2024 (referred to as the Partnerships & Business Names Bill) has recently been published by the Department of Enterprise, Trade and Employment. This legislation marks a significant development in Irish corporate law, aiming to reform the Limited Partnerships Act 1907 and the Registration of Business Names Act 1963. Its implications will be felt in the management of partnerships and business names across Ireland.

The Partnerships & Business Names Bill introduces several key changes to the existing framework regarding Limited Partnerships (LPs):

1. Continuous Connection with Ireland. Currently, a limited partnership can establish its principal place of business outside of Ireland upon registration. However, the new Bill proposes that LPs must maintain a continuous connection with the country, either through an Irish registered office or a principal place of business located within the State.
2. Economic Activity Requirement. To register an LP, the partners will be required to engage in economic activity within Ireland. Additionally, at least one general partner must either reside in the European Economic Area (EEA) or maintain a principal place of business within the EEA for the entire duration of the LP. The Bill also mandates that detailed information concerning the LP’s principal activity must be provided, as opposed to the current requirement of merely stating the general nature of the business.
3. Corporate Entities as General Partners. The Partnerships & Business Names Bill formally recognises that a corporate entity can act as a general partner in an LP, aligning it with established business practices. The name of the LP must include a formal suffix — such as “Limited Partnership,” “LP,” or “L.P.” — or its Irish equivalent.
4. Clarification of Legal Status. Certificates issued by the Registrar will specify that an LP is a contractual arrangement, rather than an independent legal entity. The registration of an LP will be effective only from the date indicated on the registration certificate, with no retroactive effect.
5. Beneficial Ownership Disclosure. The Partnerships & Business Names Bill requires the submission of beneficial ownership details for partners that are managed outside the EEA. New LPs formed under this Bill must submit this information within six months, while LPs registered under the 1907 legislation will have a period of 12 months to comply.
6. Transition for Existing LPs. Upon the enactment of the Partnerships & Business Names Bill, current registrations of LPs will remain valid. The Registrar will have a period of 30 months to:

• Identify and deregister LPs registered under the 1907 legislation that are no longer operational.
• Notify existing LPs registered under the 1907 legislation of the necessary steps to either re-register or voluntarily deregister. LPs will have a 12-month period to re-register following the receipt of this notice; otherwise, the Registrar may proceed to remove them from the register.

The Partnerships & Business Names Bill introduces several important changes to current Irish corporate law regarding business names:

• A new requirement will mandate the inclusion of an individual’s Personal Public Service Number (PPSN) on statutory forms when registering business names. This PPSN or IPN obligation was implemented in Ireland in June 2023 for company directors, so it is expected that the registration of business names will follow suit.
• The Bill will empower the Companies Registration Office (CRO) to request evidence that the business name registrant will be operating from a ‘substantial place of business in the State’. Accordingly, PO box or letterbox addresses will not be deemed acceptable. The CRO will also have the authority to refuse applications for business names deemed to be ‘undesirable’.
• Category offences will be incorporated into this legislation, signalling that non-compliance with certain legal requirements may result in serious consequences. For instance, it will be classified as a category 3 offence if changes relating to a business name are not communicated to the CRO.
• The Bill specifies a standard format for headed business letters, mirroring the guidelines established in the Companies Act 2014.
• A renewal period of 5 years will be introduced to ensure that registered business names are actively used, thereby maintaining an orderly register. All business name holders will be required to reapply for their business name certificate every five years.
• A requirement will be established for the removal of business names within 3 months following the cessation of business operations.

To sum up, the upcoming changes in the Irish company law is about to enhance transparency, accountability, and professional standards in business operations, ultimately benefiting the country’s economic landscape.

If you need assistance with the registration and accounting support for your company in Ireland, Chern & Co is here to help! Don’t hesitate to contact us Our team of professionals will provide all the necessary support to ensure the successful management of your business.