Company Law Update The Companies (Accounting) Act 2017

The Companies (Accounting) Act 2017 (‘2017 Act’), signed into law on 17 May 2017 and in force as of 9th June 2017, introduces yet more amendments to the Companies Act 2014 (‘2014 Act’). The 2017 Act has as its main purpose the transposition into Irish law of EU Directive 2013/34/EU on annual financial statements, consolidated financial statements and related reports of certain undertakings, while it also serves to address certain issues and anomalies that arise from the provisions in the 2014 Act and which require correction and/or clarification. We set out here a brief summary below of some of the main changes introduced by the 2017 Act.

1.     New category of ‘Micro’ Company

In addition to the ‘small’ ‘medium’ and ‘large’ categories of companies a new ‘micro’ company with a new simplified regime for preparing and filing financial statements (including shortened form financial statements, an exemption from disclosing directors’ remuneration and no obligation to file a directors’ report) has been introduced.  To qualify as a ‘micro’ company the entity must meet the criteria of a ‘small company’ (see below) and also meet at least two of the following three requirements:

(i) Turnover not exceeding €700,000

(ii) Balance sheet total not exceeding €350,000

(iii) Average number of employees not exceeding 10

Qualifying companies can opt into the micro-companies regime for financial years commencing on or after 1 January 2015.

Certain companies cannot qualify as ‘micro companies’ under the Act, these include holding companies that prepare group financial statements, subsidiaries included in the consolidated financial statements of higher holding undertakings, investment undertakings and financial holding undertakings.

2.     New thresholds and filing obligations for ‘Small’ and ‘Medium’ companies

The 2017 Act provides for new qualifying thresholds for both small and medium companies as follows

  • Small & small group companies
    - turnover ceiling of €12,000,000 (increased from €8,800,000);
    - balance sheet total of €6,000,000 (increased from €4,400,000).

  • Medium-sized companies
    - turnover ceiling of €40,000,000 (increased from €20,000,000);
    - balance sheet total of €20,000,000 (increased from €10,000,000). 

Pursuant to the 2017 Act however medium-sized companies are now obliged to file with the Companies Registration Office (‘CRO’), full (rather than abridged) financial statements, including turnover figures with only small and micro companies being permitted to file abridged financial statements.

3.     Financial Reporting

A company is now permitted to change its financial reporting framework once every five years even without the old requirement for there to have been a ‘relevant change of circumstances’. However, the 2017 Act introduces a new requirement whereby a company must explain in its financial statements the reason for, and any impact of, a change in the accounting policy.   

4.    Unlimited Company Name

The power granted to the Minister for Jobs, Enterprise and Innovation under the 2014 Act to exempt an unlimited company from the requirement for its name to end in “Unlimited Company” or “UC/U.C” (or the Irish language equivalent) has been repealed. However, exemptions granted under the 2014 Act are not affected.

5.     Non-Filing Structures

A significant change in the law is the curtailment of the ability for unlimited companies to avoid the requirement to publicly file accounts (by virtue of its ownership structure) while its ultimate owners maintain their limited liability status. The 2017 Act now obliges Irish registered unlimited companies which have a (direct or indirect) limited liability holding company to file accounts. In the absence of an official announcement it is expected that this rule change will come into effect for financial years commencing on or after 1 January 2017. Unlimited companies with limited liability subsidiaries will come within the filing regime for financial years commencing on or after 1 January 2022.

6.     LTD’s Ability to trade in debt securities

The 2017 Act expressly provides that the restrictions on private companies limited by shares (‘LTD’) from trading or listing debt securities only applies to debt securities issued or listed by such companies after the commencement of the 2014 Act  i.e. after 01 June 2015.

7.     Definition of ‘Credit Institutions’

The new definition of a ‘Credit Institution’ under the 2017 Act has the effect of removing uncertainly surrounding the reach of this definition in the 2014 Act whereby any company involved in any credit activity (including private intra group lending) had to be a ‘Designated Activity Company’ (‘DAC’). The new definition makes clear that only companies that lend to the public will need to be a DAC and therefore LTDs can lend inter group without falling within the definition of ‘credit institution’.

8.     Disclosure of payment for services of directors

A company (save for a micro company) must pursuant to the 2017 Act disclose payments made by it to third parties for services of any person as a director of the company (or subsidiary) or otherwise in connection with the management of the company’s affairs or of any of its subsidiaries.

9.     Acquisition of Own Shares

Pursuant to the 2017 Act companies will have to include in their directors’ reports the reason for any acquisition of its own shares during the financial year as well as the proportion of called-up share capital held at the beginning and end of the financial year.

10.     Consolidated Accounts – Parent Company Guarantee

With regard to the preparation and filing of Consolidated Accounts the 2017 Act extends the reach of the required parent company guarantee for its subsidiary from simply ‘liabilities’ of its subsidiary to all ‘commitments’ of the subsidiary for the relevant financial year.


The above are what we at AMOSS consider to be the most notable 10 changes introduced by the 2017 Act and that primarily relate to the preparation, content and form of financial statements and filing requirements, but there are many more. All companies and in particular those with non-filing structures should be aware of and consider the changes being introduced by this 2017 Act to determine whether any are relevant and will impact on and require action by their officers and auditors.

For further information please contact Bríd McCoy (Partner), Andrea de Courcey (Solicitor), or your usual AMOSS contact.