In March 2024 the General Scheme of Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 (“General Scheme”) was published to make amendments to Companies Act 2014 (CA 2014).
Audit Exemption
A change on the loss of audit exemption for companies which fail to file their annual return on time is proposed so that if a small company fails to file its annual return with the CRO for a second or subsequent time within a period of 5 consecutive years then the company will lose its audit exemption. The current position is the exemption is lost after one failure to file which is regarded as an overly severe sanction.
Strike Off and Restoration
Three new grounds for involuntary strike off are proposed – failure to notify of a registered office change, no current company secretary appointed and failure to file beneficial ownership information. Theses grounds will not give rise to disqualification of the directors and the new proposals include the steps to be taken to avert continuation of the strike off.
Liquidation
An amendment is proposed to CA 2014 which imposes an obligation on a liquidator to apply to the Court for the restriction of a director or directors of an insolvent company. The liquidator may be relieved of this obligation by the Corporate Enforcement Authority (CEA). The proposed amendment is to make explicit that the obligation on liquidators endures all the way through to finalisation which includes all restriction orders appeals proceedings.
Electronic Meetings
There are proposals to put electronic participation in meetings on a permanent statutory footing and to include provisions for notices, quorum and proceedings and virtual voting at meetings.
Corporate Enforcement Authority
Currently Section 393 CA 2014 requires an auditor to notify the CEA if during the course of an audit the auditor comes into possession of information leading to the opinion that there are reasonable grounds to believe a category 1 or 2 offence under the Act has been committed. The proposed amendment requires the auditor to furnish the CEA with copy of the books and documents or extracts and a signed assurance from the audit partner that they are exact copies.