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The   was commenced on 9 June 2017, mainly to incorporate the provisions of the (2013/34/EU) into the . The impact of the 2017 act on unlimited companies, particularly in relation to their obligations to file financial statements, is the subject of a separate note (above).

This note summarises the other material changes introduced by the 2017 act, primarily around audits and financial statements.

Concept of a ‘micro-company’

The act introduces the ‘micro-company’, a new concept in Irish company law, which is subject to relaxed financial reporting/disclosure requirements. The below table sets out the minimum size threshold for micro-companies, as well as the proposed increased thresholds for small and medium companies.

Key features of the micro-company include:

• Presumption that financial statements of micro-companies that comply with the ‘minimum requirements’ of the 2014 act have given a true and fair view, and new schedule added to 2014 act dealing with format/content of micro-company financial statements. Micro-companies are eligible for audit exemption.
• Micro-companies are exempt from preparing directors’ reports.
• Micro-companies are exempt from disclosing directors’ remuneration and arrangements, transactions with directors, or consideration paid to third parties for services of a director in financial statements.
• PLCs and unlimited companies cannot avail of the new micro-company regime.

Small and medium companies

• Significant increase in minimum size thresholds for small and medium companies (as per table above).
• Small and medium companies are now exempt from including a business review in the directors’ report.
• Exemption from the requirement to disclose the number of employees employed by category. Instead, companies can disclose average number employed in financial year.
• Medium companies will be required to prepare group financial statements, as the exemption relating to the size of the company will now only apply to micro and small companies.

Changes to the audit exemption

• New minimum size thresholds for micro-companies and small companies (as per table above) will replace the current audit exemption thresholds once the act enters into force. This will allow many more companies to avail of the audit exemption.
• A company that files its first annual return (six-month return) late can retain its audit exemption.

Other changes

• New disclosure requirements relating to directors’ remuneration and services, including a requirement for companies (other than micro-companies) to disclose payments made to third parties for services provided to a director and/or any remuneration waived by directors during a financial year,
• Amendment of the 2014 act to require auditors to report to the Director of Corporate Enforcement where there are reasonable grounds to believe that an indictable offence under 2014 act or offence contrary to , or Directives has been committed,
• Obligations for auditors of traded companies to provide opinion in the auditors’ report that the corporate governance statement is consistent with statutory financial statements, that it was prepared in accordance with the 2014 act, and to confirm certain related matters,
• A new part 26 to the 2014 act providing for preparation and public disclosure (via filing with CRO) of the annual report on payments made to governments by large companies, large groups, and public-interest entities active in the mining, extractive or logging industries,
• Amendment to definition of ‘credit institution’, as defined in the 2014 act, to make clear that only entitles lending to the public will be considered a credit institution, with the related requirement to be incorporated as a DAC company.