By Simon O’ Connor, 15th March 2016 (updated 11.08.2016)
The New Companies (Accounting) Bill 2016 was published on the 5 August 2016, introducing a new company size termed “the Micro Company”. The new Micro Company will have far fewer disclosure requirements than an ordinary small company. The Bill aims to relieve the burden on micro companies in preparing their financial statements.
How will a company qualify as a Micro Company?
The expected size thresholds are the maximum amounts provided for under Directive 2013/34/EU. A company must satisfy 2 out of 3 conditions below to qualify as a micro company:
- The turnover of the company does not exceed the amount of €700,000.
- The total of the balance sheet does not exceed €350,000.
- The average number of employees of the company does not exceed 10
Increased thresholds for other Company Sizes
The new Bill also proposes an increase to the thresholds for other company sizes. This includes the following:
- Small Company – a turnover of €12 million, 50 employees with a balance sheet of €6 million
- Medium Company – a turnover of €40 million, 250 employees with a balance sheet of €20 million
One of the key features of the Bill is that micro companies are not required to disclose the director’s remuneration in their financial statements. This is something that is going to appeal to many directors who wish to keep their remuneration private. However, this will remain to be a requirement for small companies who will be required to continue to have to disclose the directors’ remuneration in the financial statements.
Another alternative to keep the director’s remuneration private is to convert the company to an unlimited company and obtain the exemption from filing financial statements with the CRO.
Other changes to the Bill relate to the financial statements for micro companies, small and medium companies including:
- Directors of micro companies will not have to a file director’s report
- Micro companies will be exempt from a number of disclosures that are currently required by sections 305 to 312 of the Companies Act
- Abridged financial statements will no longer be acceptable from Medium sized companies
For more information on The New Companies (Accounting) Bill 2016 please do not hesitate to contact us +353(0) 1646 1625 or alternatively you can email us on email@example.com