By Company Bureau, 6th January 2010.
On 4th January 2010, the Minister for Trade and Commerce, Mr Billy Kelleher T.D., announced the enactment of the Companies (Miscellaneous Provisions) Act, 2009.
Most of the provisions of this Act come into effect immediately. This Act introduces some important new provisions into the Companies Acts and includes a number of initiatives introduced as a response to new business opportunities recently identified by the financial services industry.
The Companies (Miscellaneous Provisions) Act 2009 amends existing company law in a range of areas. Firstly, it provides that parent companies incorporated in Ireland, many of whom already have a substantial presence in the State, can continue for a limited period to prepare their accounts in accordance with the US Generally Accepted Accounting Principles, known as “US GAAP” if they comply with specified criteria. The companies in question have moved, or are in the process of moving their parent
companies to Ireland and have a continuing obligation, because of their US listings to produce US GAAP accounts. There are logistical difficulties and financial implications involved with changing in a short time span either to Irish or International Financial Reporting Standards, which are those normally followed in Ireland. The Act provides for a transitional period to allow for this to take place in an orderly manner.
The period of which an availing company can apply these standards is set at a maximum of 4 years, and the date of termination of the proposal as the end of 2015. The Act also gives the Minister for Enterprise, Trade and Employment the power to prescribe other internationally recognised accounting standards for similar companies for a similar
limited period of time. The Act also introduces a mechanism whereby certain collective investment fund entities can migrate their registered office into and out of Ireland without firstly having to wind up in their current domiciled jurisdiction. This measure was introduced at the request of the Irish funds industry who reported that there is a window of opportunity for Ireland to attract investment funds business and companies looking to incorporate a company in Ireland if our laws were to allow such a mechanism.
The Act also provides for the recognition, by order of the Minister, of Stock Exchanges outside Ireland on which overseas market purchase of own shares can be made by companies. Currently, the Irish Stock Exchange is the only stock exchange recognised for market purchase of own shares. The Act creates a new type of purchase called an “overseas market purchase”. An overseas market purchase is similar to a market purchase but with a new obligation on the company to publicise its purchase of own shares on the company website for the purposes of informing the market. The power to recognise other exchanges is being provided to facilitate international groups that are relocating their parent undertaking to Ireland, that are not listed on the Irish Stock Exchange and that wish to make market purchases of their own shares. Finally, the Act will limit potential costs to the Exchequer of certain types of investigations into the affairs of a company. It will also provide for continuity of membership by directors of committees of enquiry established by the Irish Auditing and Accounting Supervisory Authority (IAASA).
These measures will help reinforce Ireland’s position as Europe’s premier jurisdiction for US and Asian Companies looking to expand into Europe. To take the next step, and set up a company in Ireland, please contact the Irish Company Registration experts Company Bureau today.
Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.