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Registry of Beneficial Ownership PUBLIC ACCESS – REMAINS DENIED

Posted in Category(ies): Beneficial Ownership

In November 2022 the Court of Justice of the European Union (CJEU) ruled that the rights of the public to access information on the beneficial ownership of companies was “a serious interference with the fundamental rights to respect private life, and to the protection of personal data”.

Whilst the provision of beneficial ownership originated from an EU Directive on Anti-Money Laundering the right of public access to that information impacts in so many different areas.

This is an EU wide problem as the bulk of Member States in the EU have established their own Registries of Beneficial Ownership.

Buying, selling, merging companies all include basic searches in the Companies Registration Office and Central Register of Beneficial Ownership. These searches are intended to support the information provided by the buyer, selling, merging entities and give comfort to all involved.

Would you be willing to consider buying or selling or merging with a company when you cannot verify details of beneficial ownership filed in the relevant EU Registry?

Despite immediate and widespread reaction against the ruling the reality means that for many companies throughout Europe their rights to access beneficial ownership details continue to be denied.

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Posted on by | Kathryn-Maybury

CROSS-BORDER MERGERS – changes are coming

Posted in Category(ies): Latest News

 

Directive 2019/2121 (Cross-border Mobility) became EU law on 31.01.2023 although Ireland has yet to transpose it into Irish law.

 

The Directive itself does not provide for transitional arrangements for Cross-Border Mergers commenced under the current Cross-border Merger Regulations (SI 157 of 2008) to complete under the current regime, following the 31.01.2023 transposition deadline.  

 

It is up to individual Member States to determine its own Regulations on how to manage the transition from 31.01.2023 to whenever those Regulations come into effect.

 

Ireland has proposed to provide two options for a company currently planning a Cross-Border Merger.

 

  1. An Irish company currently planning to engage in a cross-border merger and seeking to rely on the current legislative regime can publish the common draft terms in advance of the new Regulations. The company will then have a six month period within which to hold its general meeting to approve draft terms and complete the transaction under the current regime. 

     

  2. Companies may wait until the new Regulations are in place.

 

The Department of Enterprise, Trade and Employment is in the process of drafting the Regulations which will be introduced by way of Statutory Instrument.

 

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Posted on by | Kathryn-Maybury

Virtual Annual General Meetings still allowed in 2023

Posted in Category(ies): Meetings

 

The Companies (Miscellaneous Provisions) (Covid-19) Act came into being during the Pandemic when restrictions on travel within Ireland, flights into Ireland and inability to attend public gatherings led to fairly substantial practical problems for many companies. The implementation of the Act resolved some of those problems not least being the ability for a company to convene its Annual General Meeting virtually.

In December 2022 the Government announced the extension of some parts of the Act to the end of this year (31.12.2023). In particular, certain company meetings (including Annual General Meetings) can still be held virtually. This will be welcome news to many companies who prefer this format although there is nothing to stop a company holding a physical meeting if they wish to do so.

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Posted on by | Kathryn-Maybury

The Charities (Amendment) Bill 2022

Posted in Category(ies): Charities

The Charities (Amendment) Bill 2022 was published by The Minister for Rural and Community Development, Heather Humphries on 29 April 2022. The purpose of the Bill is “to provide for a number of amendments to the Charities Act 2009. The proposed amendments aim to improve the ability of the Charities Regulator to conduct its statutory functions, ensuring more proportionate regulation leading to greater public trust and confidence in the charities sector.” The Bill is expected to be enacted later this year.

Some of the provisions include the following;

  • Establish the promotion of human rights as a charitable purpose.

  • Increase the threshold for filing of a full set of Financial Statements from a maximum gross income or expenditure of €100,000 to €250,000 (aligning with the Companies Act 2014).

  • The accounting standard “Charities Statement of Recommended Practices (SORP)” will be compulsory. An exemption will be permitted for charities with a turnover of less than €250,000.

  • Definition of charities trustee to be amended to exclude Company Secretaries (who hold no other office in the charity).

  • Introduction of new statutory fiduciary duties for trustees to act in good faith, avoid conflicts of interest and exercise an objective standard of care, skill and diligence when advancing the charitable purpose of the charity, mirroring similar duties of Directors under the Companies Act 2014.

  • New Definition of the term “Member”. This change extends the requirement to maintain a Register of Members to unincorporated associations.

 

Click here for full text of the Charities (Amendment) Bill 2022

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Posted on by | Van-Geraghty

Director Fiduciary Duties – common sense?

Posted in Category(ies): Directors

 

The phrase “Fiduciary Duties of a Director” is used so often but I still meet some Directors who feel inhibited to ask just what does the phrase mean.  

Fiduciary Duties are set out in the Companies Act 2014 and are intended to help a Director comply with his/her duties as a Director.

  • Duty to disclose any interest Director may have in contracts made by the company.

  • Act in good faith in interests of the company.

  • Act in accordance with the Company’s Constitution.  Although not stated in the Companies Act 2014 a Director would also have to act in accordance with Shareholder’s Agreement if applicable.

  • Only act in accordance with the law.

  • Do not use the company’s property, information or opportunities for his/her own benefit or that of anyone else without specific approval as set out in the Act.

  • Cannot restrict a Director’s power to exercise his/her independent judgement without specific approval or permission as set out in the Act.

  • Avoid conflict between the Director’s duties to the company and his/her own personal interests.

  • Exercise care, skill and diligence. 

  • Have regard for the interests of its employees in general and the interests of the members. 

Fiduciary Duties may sound onerous but, they are a key resource in helping us as Directors to focus on our duties and responsibilities to act in the best interests of the company, its members and employees. For me, Fiduciary Duties are just common sense and should help all Directors to manage an effective and progressive company.

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Posted on by | Kathryn-Maybury

Annual Return time is around the corner..

Posted in Category(ies): Annual Returns

 

  • Check status of your company’s filing in the Companies Registration Office is correct
  • Check if any of the directors have changed their personal details. The two most common changes are where directors have changed home address or their list of directorships are not current.
  • When a director moves home address a statutory form must be filed noting the new address and effective date of change.
  • The list of directorships should include all directorships held worldwide, past and present, within past 5 years.
  • Have the Financial Statements ready for filing.
  • Confirm the designated signatories for the Annual Return will be available to sign when required, i.e. a specific named Director and the Company Secretary.
  • The Annual Return should include the PPSN of each Director.
  • Where a Director does not have a PPSN, they must instead provide a VIN (Verified Identity Number).
  • A VIN can be applied by submitting a notorised VIF Form in advance with the Companies Registration Office. The turnaround for registering notorised VIF Forms is approximately one week.  
  • Annual Returns without either a PPSN or VIN number will be rejected.
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Posted on by | Kathryn-Maybury

know your numbers

Posted in Category(ies): Companies Registration Office

KNOW YOUR NUMBERS – PPS / VIF number – New filing requirements imminent…..

 

Reality – imminently (due to commence on the 23rd of April but a temporary postponement was put in place by the CRO) … all directors of any company incorporated in Ireland must provide his or her Personal Public Service (PPS) number or Verification of Identity (VIF) number when filing certain documents in the Companies Registration Office.

What is difference between PPS and VIF number – PPS number is available to any individual tax resident in Ireland. VIF number is established where an individual is not tax resident in Ireland.

Scam Awareness – this is new filing requirement has already generated publicity and offers a unique opportunity to scammers. Be very careful how you engage with anyone asking for your PPS number.

Why now – the requirement to provide a PPS number is contained in the Companies (Corporate Enforcement Authority) Act 2021 but, it has taken time for the technology and verification processes to be designed and tested.

Why is it required – the purpose is to add an additional layer to verify the identity of a director when filing documentation in the Companies Registration Office.

Is compliance really necessary – providing the PPS number is a mandatory requirement which means failure to comply is a Category Offence. It also means any statutory filings will be rejected which would have knock-on effects in terms of dealing with banks, losing audit exemption, etc.

Who sees PPS/VIF number – the person preparing the statutory form for filing will enter the PPS/VIF number. When filed electronically the PPS/VIF number will never be visible to any staff in the Companies Registration Office or members of the public.

What now – where the PPS or VIF number is not already on record KomSec will contact its clients directly.   Additional blogs will be issued as the process gets up and running.

 

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Posted on by | Kathryn-Maybury

The public can no longer access beneficial ownership information

Posted in Category(ies): Beneficial Ownership

 

One of the biggest talking points at the time the Beneficial Ownership Register was put in place was the fact that the public could access it. This meant the public could see the names of the beneficial owners, what percentage shareholding they might hold and even their dates of birth and home addresses!

All that has now changed further to an unexpected European Court Judgment last week. Its ruling means that from now on only ‘Designated Persons’ can search the Register and obtain beneficial ownership details.

From a practical point of view, the ruling will not affect the vast majority of companies. They are still obliged to ensure both their internal and external Beneficial Ownership Registers are completed in full and kept up to date. The banks as a ‘Designated Person’ will continue to be able to search the Register and (in our experience) refuse to/delay providing credit facilities to companies if they have queries over the information lodged.

In summary, even if Joe Public can no longer have a peep, there is still no excuse not to register your Beneficial Ownership information and keep it updated!

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Posted on by | Kathryn-Maybury

New Charities Classification System

Posted in Category(ies): Charities

Charities Classification System

The Charities Regulatory Authority launched a Classification System on 14th November 2022 (as part of Charities Week) which broadly mirrors classification systems in other jurisdictions.

The purpose of the system is to improve functionality of the Charities Register, provide clarity on registered charities, improve data for research.

Charities to self-determine classification and rely on a “best fit” as it is not possible to achieve a perfect system. It is important to note that Classification will not put a limit on the types of activities a charity can carry out to further their charitable purpose.

 

How does it work?

In the example provided by the Charities Regulator, a museum for example would choose category “Arts and Culture” and can then select two secondary groups “History, heritage and culture” and “Museum or library”.

How to search charities using the classification System

A search facility will be introduced when the database is populated. This will be of benefit to funders, researchers and potential volunteers.

What should charities do now?

• Directors to agree on classification and record decision at a Board Meeting.

• Log into MyAccount to complete and submit form

• Once off process (unless charity wishes to amend it in future)

• Automatic registration of classification

• Immediate update to Register of Charities

 

 More Information

There’s a new Classification Section on their website with more information which includes:

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Posted on by | Van-Geraghty

CORPORATE ENFORCEMENT AUTHORITY – different name – no difference?

Posted in Category(ies): Latest News

 

The Corporate Enforcement Authority (established in July 2022) replaced the Office of Director of Corporate Enforcement (ODCE) which was no longer fit for purpose. With the creation of the CEA it would be easy to think same old, same old.

 

It seems to me that the CEA has seized the opportunity to morph into a much more dynamic, focused, and independent organisation which has hit the ground running. Personally, I think one of the most important developments for the CEA is its ability to control its own recruitment requirements so that it can source specialist staff capable of dealing with the intricacies of corporate crime.

 

White collar crime sounds quite bland but as far as I am concerned it is just as bad as any other crime. A corrupt director may not have physically knocked over an old lady to steal her handbag but stealing the old lady’s pension is worse.   I was never a great advocate of the “walk of shame” one saw for alleged corporate criminals in other jurisdictions but, have to admit I am beginning to think there is some merit in seeing the public arrest with HANDCUFFS of individuals accused of corporate crime.

According to the United Nations it is estimated that US$1 trillion is paid in bribes and US$2.6 trillion stolen through corruption. Combined these sums represent 5% of annual Global Gross Domestic Product.

This year the Irish Government gave one of the biggest Budgets in the history of the State with commentators saying it was made possible by income from Corporation Tax. Whatever one thinks of the Budget if Ireland does not maintain a reputation as a strong reputable country to do business in there will be no Corporation Tax to argue about. There are more than enough challenges for Irish companies dealing with the devasting war in Ukraine, energy costs, housing, climate, etc. Without a strong corporate reputation Ireland will no longer attract business and once a reputation is lost the way back is grindingly hard for everyone.

An effective CEA will be to the benefit of us all.

 

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Posted on by | Kathryn-Maybury