Section 137 of The Companies Act 2014 (section 43 under the old Act) states that if an Irish Company does not have at least one Director who is resident in the European Economic Area (EEA), a Bond must be taken out. The Section 137 Non-Resident Directors Bond exempts companies registered in the Republic of Ireland from the requirement to have a Director who is resident in the EEA (European Union plus Iceland, Norway and Liechtenstein)
The Bond insures the company for a sum of €25,000 and its purpose is to cover the following:
• Any fine imposed on the Company in respect of offences under the Companies Act 2014 e.g. failure to file Annual Returns and Audited Accounts on time.
• A fine for failure to supply certain information to the Revenue Commissioners – mainly information required on the Form CRO 11F.
• Any penalty which the company has been held liable to pay under S1071 or S1073 of the Taxes Consolidation Act 1997.
• Any expenses incurred in recovering the fines and penalties mentioned above
There shall become payable under the bond a sum of money for the purpose of same being applied in discharge of the whole or part of the company’s liability in respect of any such fine or penalty.
The bond must have a minimum period of validity of two years, commencing no earlier than the occurrence of the event giving rise to the requirement for the bond. The surety under the bond must be a member of a class specified in Schedule 2 of the Companies Act 2014 ( Bonding Order 2015) – that is, a bank, building society, insurance company or credit institution.
It is important to note that having the bond in place does not replace or act as a Director of the company – It merely exempts the requirement of at least one director being resident in the EU or EEA. If the company has not appointed a EU/EEA resident director by the time it lapses in 2 years then it has to be renewed for another 2 years and every two years thereafter. An exemption may be applied for should be company be creating significant employment after two years and a letter from the Revenue Commissioners confirming a significant economic link is required to avail of the exemption.
Company Bureau can arrange the Section 137 Revenue Bond for you. The total fee payable for the bond is €1957.50 and covers a period of two years. Please note once the Bond is issued it is non-refundable.
For more information or to proceed with the Bond please contact us and we will e-mail you a proposal form today.
NOTE: In certain circumstances, International Companies setting up in Ireland may want to employ the services of an Irish Resident Director in a non-executive capacity. To discuss this requirement in more detail please contact us.