By Simon O’ Connor
The new Companies Act which commenced on the 1st of June 2015, has made changes to specific company types which under the previous legislation did not qualify for audit exemption.
Under the new Act, Companies Limited by Guarantee (CLG) will be able to qualify for audit exemption; however Registered Charities will still be obliged to carry out audits. Previously, an audit exemption was unavailable for a parent or subsidiary company but under the new legislation is now available if the company if the meet the required criteria. To claim audit exemption and qualify as a small company all companies must meet 2 out of the 3 size criteria’s. Previously a company was required to meet all 3 conditions to qualify for exemption.
If an annual return is filed late a company will not be able to qualify for audit exemption for a period of two years. However, if it is the company’s first annual return which has been filed late, the company will still be able to qualify for audit exemption but will incur a late penalty fee. A company may also apply to their local District Court for an extension of time for filling their annual returns. Only one extension can be granted in any financial period. A company will not receive a late filing penalty if the annual return is filed within the extended period that has been granted by the District Court.
Which companies can avail of audit exemption?
• Private Company Limited by Shares (LTD)
• Designated Activity Company (DAC)
• Company Limited by Guarantee (CLG)
• Non-designated Private Unlimited Company (ULC)
• Small Groups
Audit exemption checklist:
• Is your limited company listed above?
• Has the appointment of the auditor been terminated?
• Has the auditor served the 21 days’ notice on the company?
• Has the notice been filed in the CRO?
• Has the statements been included in the balance sheet?
• Are you required to have an audit by other mean? E.g. Bank Funding, Enterprise Ireland etc.
• Are you under the 2 out of 3 conditions for current year for a single company?
• Are you under the 2 out of 3 conditions for current and proceedings financial year for a group?
• Have you filed this year’s and last year’s annual return on time?
• If this is your first financial year, have you filed your first annual return on time?
• Have the directors chosen to avail of audit exemption and recorded this decision on the minutes?
For more information on the new Companies Act 2014, please do not hesitate to contact us on +353 16874519 or you can fill out on enquiry form here and representatives will contact you with the required information as soon as possible.