Filing Exemption Disappears for Certain Unlimited Companies


A significant legislative change made five years ago will only impact affected companies this year. The amendment made by the Companies (Accounting) Act 2017 amended section 1274 dealing with unlimited companies (known as a ULCs).

‘Designated ULCs’ lose accounts filing exemption

Among other changes, certain types of ULC (known as ‘designated ULCs’) are required to file their accounts with the CRO (including group accounts where applicable) for the first time. While most changes in the law came into effect from 1 January 2017, this one was delayed until accounting periods commencing 1 January 2022.

The amended Section 1274 Companies Act, 2014 broadly states that for accounting periods commencing on or after 1 January 2022, a ULC that has been a holding company of an undertaking which was at that time limited must file financial statements along with their annual return for accounting periods commencing on or after 1 January 2022.

This applies across the board regardless of the size of the group as section 1274 does not have any exclusion clause that says the section disapplies sections 347/348 making the filing of annual returns/accounts compulsory.

ULCs may qualify for audit exemption

In a related point Section 1230 Companies Act, 2014 allows such designated groups, where they are private ULCs (provided they satisfy the ‘small’ company criteria) to claim audit exemption (assuming all the other criteria are satisfied – annual returns filed on time, no 10% shareholder objections etc., their constitution permits audit exemption etc. ) because the Table disapplying certain sections of the Companies Act, 2014 for ULCs does not disapply the audit exemption and ‘small’ company criteria for ULCs contained in Parts 1-14 of the Companies Act, 2014.

 

Filing Exemption Remains for non-designated ULCs

So-called ‘non designated’ ULCs under Section 1274, that do not have any limited liability subsidiaries and whose direct and indirect shareholders do not comprise solely of limited liability undertakings will continue to be exempt from the requirement to file their financial statements.

In other words where a company is a ‘pure’ unlimited company (i.e. there is no ultimate protection of limited liability in the group structure), it will still be possible to avail of an exemption from filing financial statements.

However, they will need to file an auditor’s report attached to the Annual Return which confirms that the auditors have audited the financial statements of the company for the relevant financial year in accordance with sections 336 and 391.

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