COMPANY LAW – NO DEAL BREXIT
It is hard to know how many people actively care or even believe anything one hears about Brexit at this stage. However, as the prospect of a No Deal Brexit edges ever closer to reality companies are left with no choice but to care.
Two things to consider in the event of a No Deal are outlined below.
Directors Residency
Companies incorporated in Ireland must have a minimum of one Director resident in the European Economic Area (EEA). The EEA is an International Agreement that extends the EU single market to
non-EU member parties including Liechtenstein, Iceland and Norway.
Currently, a number of companies rely on having a Director resident in the UK to fulfil the above requirement. Clearly, if or when a No Deal occurs than those companies will no longer have an EEA Director and must have an alternative plan in place. Companies are left with pretty much two choices as they can either:
(a) appoint a new Director who is resident within the EEA; or
(b) take out a Bond with appropriate Insurers.
External Companies
Companies incorporated in the UK and registered in Ireland as an “External Company” will also face changes in the event of a No Deal. Such companies would have registered as an External Company on the basis that they either trade or have a place of business in the State.
In the event of a No Deal then companies incorporated in the UK and registered in this State as an External Company will have to start filing Annual Returns in Ireland under non-EEA country legislation, refer to Sections 1304 to 1306 Companies Act 2014. Given the paucity of filing requirements on External Companies anyway one must assume that this will be a change easily overlooked.
The deadline for considering these issues appears now to be the 31st of December, 2020 so while not urgent you should ensure they are put on your ‘to do’ list for early Autumn.
As always, if you have any questions on this blog please contact myself or one of my colleagues.