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Companies (Accounting) Act 2017 comes into operation printable version
08 Jun 2017 filed by editor - General, Business The new Companies (Accounting) Act 2017 which came into force today introduces a new category of company, the micro company, and aims to reduce the financial reporting obligations on those very small companies.
Announcing the coming into force of the Act Jobs, Enterprise and Innovation Minister Mary Mitchell O'ConnorI said it also increases the thresholds for the "small company" category so more companies will qualify as small in future and become eligible for cost saving provisions such as the audit exemption.
The Act also increases transparency by introducing new reporting requirements for companies that are active in extractive industries and by obliging some unlimited companies, funds and investment companies to file financial statements publicly.
Announcing the commencement of the Act, the Minister said "This Act marks a significant milestone in the development of Irish law on corporate transparency. It modernises the financial reporting obligations on companies and reduces the administrative burden on small and very small companies. At the same time, it does this is a way that is designed to take into account the interests of people who rely on financial statements as well as the interests of the companies that prepare those statements.
"I believe that this new Act will be seen as good regulation that strikes the right balance between proportionate disclosure obligations on the one hand, and the need for meaningful transparency on the other.
"Above all, the vast majority of Irish companies should see real benefits and savings in time, effort and cost."
Link to SI No 246 of 2017 Companies (Accounting) Act 2017 (Commencement) Order 2017 SI No 246 of 2017
The Companies (Accounting) Act 2017 was signed into law by the President on 17 May 2017. The Minister signed the Companies (Accounting) Act 2017 (Commencement) Order 2017 (S.I. 246 of 2017) on 2 June 2017. The Commencement Order provides that the Act comes into operation on Friday 9 June 2017 and applies to financial years beginning on or after 1 January 2017. Companies that wish to apply the provisions of the Act to earlier financial years, may be able to avail of section 14 of the Act, which allows application to financial years that began on or after 1 January 2015.
The Companies (Accounting) Act 2017 amends the Companies Act 2014, mainly in respect of the law on financial reporting by companies. It transposes the EU Accounting Directive into Irish law.
The Act reduces the financial reporting obligations on small and very small business, in particular it -
- Increases the thresholds for being classified as small, so some companies that are currently in the category of "medium company" will be reclassified and see a reduction in their obligations;
- Further reduces the current reporting obligations on small companies so that companies already within the "small" category will see benefits; and
- Introduces a new sub-category of "small", known as the micro company, and these will have greatly simplified financial reporting obligations.
- The Act also introduces some new financial reporting and filing requirements for specific types of companies. These are -
- Increased requirements for medium sized companies and groups to reflect the fact that the thresholds for the medium category are increasing and so many significant companies (in the Irish context) will be classified as "medium" rather than "large";
- New reporting requirements for companies that have operations in mining, quarrying and logging of primary forests. These are a new requirement of the Directive and are designed to improve transparency of companies that exploit natural resources;
- A requirement for companies that are registered as "unlimited" but have limited their liability in effect to file their financial statements publicly, as all other limited liability companies do.
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