Auditor Appointment
Companies Act
Qualification of company as small or medium company
350. (1) In this section “qualifying conditions” means the conditions referred to in subsection (5) or (6), as appropriate.
(2) A company that is not excluded by subsection (11) qualifies as a small company or a medium company in relation to its first financial year if the qualifying conditions are satisfied in respect of that year.
(3) A company that is not excluded by subsection (11) qualifies as a small company in relation to a subsequent financial year—
(a) if the qualifying conditions are satisfied in respect of that year and the preceding financial year,
(b) if the qualifying conditions are satisfied in respect of that year and the company qualified as a small company in relation to the preceding financial year,
(c) if the qualifying conditions were satisfied in the preceding financial year and the company qualified as a small company in relation to that year.
(4) A company that is not excluded by subsection (11) qualifies as a medium company in relation to a subsequent financial year—
(a) if the qualifying conditions are satisfied in respect of that year and the preceding financial year,
(b) if the qualifying conditions are satisfied in respect of that year and the company qualified as a medium company in relation to the preceding financial year,
(c) if the qualifying conditions were satisfied in the preceding financial year and the company qualified as a medium company in relation to that year.
(5) The qualifying conditions for a small company are satisfied by a company in relation to a financial year in which it fulfils 2 or more of the following requirements:
(a) the amount of the turnover of the company does not exceed €8.8 million;
(b) the balance sheet total of the company does not exceed €4.4 million;
(c) the average number of employees of the company does not exceed 50.
(6) The qualifying conditions for a medium company are satisfied by a company in relation to a financial year in which it fulfils 2 or more of the following requirements:
(a) the amount of the turnover of the company does not exceed €20 million;
(b) the balance sheet total of the company does not exceed €10 million;
(c) the average number of employees of the company does not exceed 250.
(7) In this section “amount of the turnover”, in relation to a company, means the amount of the turnover shown in the company’s profit and loss account.
(8) In the application of this section to any period which is a financial year but is not in fact a year, the amounts specified in subsections (5)(a) and (6)(a) shall be proportionately adjusted.
(9) In this section “balance sheet total”, in relation to a company, means the aggregate of the amounts shown as assets in the company’s balance sheet.
(10) For the purposes of subsections (5)(c) and (6)(c), the average number of employees of a company shall be determined by applying the method of calculation prescribed by section 317 for determining the number required by subsection (1)(a) of that section to be stated in a note to the financial statements of a company.
(11) This section shall not apply to a company if it is—
(a) a holding company that prepares group financial statements, or
(b) a company falling within any provision (in so far as applicable to a private company limited by shares) of Schedule 5 .
Audit exemption
Main conditions for audit exemption — non-group situation
358. (1) Subject to subsection (3) and the other provisions of this Chapter, section 360 (audit exemption) applies to a company in respect of its statutory financial statements for a particular financial year if the company qualifies as a small company in relation to that financial year.
(2) For the purposes of this section, whether a company qualifies as a small company shall be determined in accordance with section 350 (2), (3), (5), (7), (8), (9) and (10).
(3) Section 360 does not apply to a company in respect of its statutory financial statements for a particular financial year during any part of which the company was a group company (within the meaning of section 359 ) unless the group qualifies, under section 359 , as a small group in relation to that financial year (and the other relevant provisions of this Chapter are complied with).
(4) In subsection (3) “group”, in relation to a group company, shall be read in accordance with section 359 (1)(b).
(5) Nothing in this section prejudices the operation of Chapter 16 (special audit exemption for dormant companies).
Main conditions for audit exemption — group situation
359. (1) In this section—
(a) “group company” means a company that is a holding company or a subsidiary undertaking; and
(b) references to the group, in relation to a group company, are references to that company, together with all its associated undertakings, and for the purposes of this paragraph undertakings are associated if one is the subsidiary undertaking of the other or both are subsidiary undertakings of a third undertaking.
(2) Subject to this Chapter, section 360 (audit exemption) applies to any group company in respect of its statutory financial statements for a particular financial year if the group qualifies as a small group in relation to that financial year.
(3) The determination of whether a group so qualifies shall be made, as provided for in this section, by reference to whether the financial year in question is the first, or a subsequent, financial year of the holding company that heads the group.
(4) A group qualifies as small in relation to the holding company’s first financial year if the qualifying conditions are satisfied in respect of that year.
(5) A group qualifies as small in relation to a subsequent financial year of the holding company—
(a) if the qualifying conditions are satisfied in respect of that year and the preceding financial year;
(b) if the qualifying conditions are satisfied in respect of that year and the group qualified as small in relation to the preceding financial year;
(c) if the qualifying conditions were satisfied in respect of the preceding financial year and the group qualified as small in relation to that year.
(6) The qualifying conditions for a small group are satisfied by a group in relation to a financial year in which it fulfils 2 or more of the following requirements:
(a) the balance sheet total of the holding company and the other members of the group taken as a whole does not exceed €4.4 million,
(b) the amount of the turnover of holding company and the other members of the group taken as a whole does not exceed €8.8 million,
(c) the average number of persons employed by the holding company and the other members of the group taken as a whole does not exceed 50.
(7) For the purposes of subsection (6)(a)—
(a) “balance sheet total”, in relation to the holding company or another member of the group, means the aggregate of the amounts shown as assets in the company’s or other member’s entity balance sheet;
(b) there shall, in the operation of taking the balance sheet totals as a whole, be eliminated inter-group balances.
(8) For the purposes of subsection (6)(b)—
(a) “amount of the turnover”, in relation to the holding company or another member of the group, means the amount of the turnover shown in the company’s or other member’s entity profit and loss account;
(b) there shall, in the operation of taking the amounts of turnover as a whole, be eliminated inter-group sales.
(9) For the purpose of subsection (6)(c), the average number of persons employed by a company or another member of the group shall be determined by applying the method of calculation prescribed by section 317 for determining the number required by subsection (1) of that section to be stated in a note to the financial statements of a company.
(10) In the application of paragraph (b) of subsection (6) to any period which is a financial year but is not in fact a year, the amount specified in that paragraph shall be proportionally adjusted.
(11) Each occasion of an amendment of the kind referred to in subsection (12) being effected shall operate to enable the Minister to amend, by order, subsection (6)(a) and (b), by substituting for the total and the amount, respectively, specified in those provisions a greater total and amount (not being a total or an amount that is greater than the total or amount it replaces by 25 per cent).
(12) The amendment referred to in subsection (11) is an amendment of the amount and the total specified in paragraphs (a) and (b), respectively, of section 350 (5), being an amendment made for the purpose of giving effect to a Community act.
(13) Nothing in this section nor in any subsequent provision of this Chapter prejudices the operation of Chapter 16 (special audit exemption for dormant companies).
Audit exemption
360. (1) The following provisions (the “audit exemption”) have effect where, by virtue of section 358 or 359 , as appropriate, this section applies in respect of the statutory financial statements of a company or a group for a particular financial year—
(a) without prejudice to section 384 (2), section 333 (obligation to have statutory financial statements audited) shall not apply to the company or group in respect of that financial year, and
(b) unless and until circumstances (if any) arise by reason of which the company or group is not entitled to the audit exemption in respect of that financial year, the provisions specified in subsection (2) shall not apply to the company or group in respect of that year.
(2) The provisions mentioned in subsection (1) are those provisions of this Act, being provisions that—
(a) confer any powers on statutory auditors or require anything to be done by or to or as respects statutory auditors, or
(b) make provision on the basis of a report of statutory auditors having been prepared in relation to the statutory financial statements of a company in a financial year,
and, without prejudice to the generality of the foregoing, include the provisions specified in the Table to this section in so far, and only in so far, as they make provision of the foregoing kind.
Table
Section 121 (3) and (4) (report of statutory auditors on statutory financial statements for purposes of distribution);
Section 306 (4) (statement of particulars of non-compliance with section 305 or 306 );
Section 322 (disclosure of remuneration for audit, audit-related work and non-audit work);
Section 330 (statement on relevant audit information);
Section 336 (form of statutory auditors’ report);
Section 337 (signature of statutory auditor’s report);
Section 338 (circulation of statutory financial statements);
Section 339 (right of members to demand copies of financial statements and reports);
Section 340 (requirements in relation to publication of financial statements);
Section 341 (financial statements and reports to be laid before company in general meeting);
Section 347 (documents to be annexed to annual return);
Section 356 (special report on abridged financial statements);
Section 380 and sections 382 to 385 (dealing with appointment of statutory auditors);
Sections 390 to 393 (obligations of statutory auditors).
Audit exemption not available where notice under section 334 served
361. (1) Notwithstanding that section 358 is complied with, a company is not entitled to the audit exemption referred to in that section in a financial year if a notice, with respect to that year, is served, under and in accordance with section 334 (1) and (2), on the company.
(2) Notwithstanding that section 359 is complied with—
(a) a holding company and the other members of the group are not entitled to the audit exemption referred to in that section in a financial year if a notice, with respect to that year, is served, under and in accordance with section 334 (1) and (2), on the holding company (irrespective of whether such a notice is served under and in accordance with those provisions on one or more of the other members of the group),
(b) where no such notice has been served, under and in accordance with those provisions, on the holding company but one has been so served on another member of the group, then that member is not entitled to the audit exemption in the year concerned irrespective of whether its holding company and any other members of the group avail themselves of the audit exemption in that year (but this paragraph is not to be read as diminishing the extent of the audit exemption, so far as it relates to the holding company’s group financial statements, that is availed of by the holding company).
Audit exemption not available where company or subsidiary undertaking falls within a certain category
362. (1) Notwithstanding that section 358 is complied with, a company is not entitled to the audit exemption referred to in that section if the company is a company falling within any provision (in so far as applicable to a private company limited by shares) of Schedule 5 , other than a company referred to in paragraph 5 or 16 of that Schedule, or if it is a relevant securitisation company.
(2) Notwithstanding that section 359 is complied with, a holding company and the other members of the group are not entitled to the audit exemption referred to in that section if—
(a) the holding company is a company falling within any provision (in so far as applicable to a private company limited by shares) of Schedule 5 , other than a company referred to in paragraph 5 or 16 of that Schedule, or if it is a relevant securitisation company, or
(b) any of those other members is—
(i) a credit institution,
(ii) an insurance undertaking,
(iii) a company falling within any provision of Schedule 5 , other than a company referred to in paragraph 5 or 16 of that Schedule,
(iv) a relevant securitisation company, or
(v) a body any of the securities of which are admitted to trading on a regulated market.
(3) In this section “relevant securitisation company” means—
(a) a qualifying company within the meaning of section 110 of the Taxes Consolidation Act 1997 ; or
(b) a financial vehicle corporation (“FVC”) within the meaning of—
(i) in the period before 1 January 2015, Article 1(1) of Regulation (EC) No. 24/2009 of the European Central Bank of 19 December 2008 concerning statistics on the assets and liabilities of financial vehicle corporations engaged in securitisation transactions; or
(ii) subject to subsection (4), in the period on or after 1 January 2015, Article 1(1) of Regulation (EU) No. 1075/2013 of the European Central Bank of 18 October 2013 concerning statistics on the assets and liabilities of financial vehicle corporations engaged in securitisation transactions (recast).
(4) If a Regulation is made by the European Central Bank concerning statistics on the assets and liabilities of financial vehicle corporations engaged in securitisation transactions that—
(a) contains a different definition of financial vehicle corporation (“FVC”) from that referred to in subparagraph (ii) of subsection (3)(b), the reference in that provision to that definition shall be read as a reference to the definition contained in the Regulation so made, or
(b) amends the definition so referred to, the reference in that provision to that definition shall be read as a reference to that definition as it stands so amended.
Audit exemption (non-group situation) not available unless annual return filed in time
363. (1) Notwithstanding that section 358 is complied with, a company is not entitled to the audit exemption referred to in that section in a financial year unless—
(a) there is delivered to the Registrar, in compliance with section 343 , the company’s annual return to which the statutory financial statements or (as appropriate) abridged financial statements for that financial year are annexed, and
(b) if the annual return referred to in paragraph (a) is not the company’s first annual return, there has been delivered to the Registrar, in compliance with section 343 , its annual return to which the statutory financial statements or (as appropriate) abridged financial statements for its preceding financial year were annexed.
(2) Where the annual return referred to in paragraph (a) or (b) of subsection (1) is the company’s first annual return, that paragraph shall have effect as if the reference to statutory financial statements or abridged financial statements being annexed to that return were omitted.
Audit exemption (group situation) not available unless annual return filed in time
364. (1) In this section—
(a) a reference to each of the relevant bodies is a reference to each of the holding company and the other members of the group (but this paragraph is subject to subsection (6)),
(b) “preceding financial year” means the financial year preceding the financial year referred to in subsection (2).
(2) Notwithstanding that section 359 is complied with, a holding company and the other members of the group are not entitled to the audit exemption referred to in that section in a financial year unless—
(a) there is delivered to the Registrar, in compliance with section 343 , the annual return of each of the relevant bodies to which the particular relevant body’s statutory financial statements or (as appropriate) abridged financial statements for that financial year are annexed, and
(b) if the annual return referred to in paragraph (a) is not the first annual return of each of the relevant bodies, the condition specified in subsection (3) or (4), as the case may be, is satisfied.
(3) If the annual return referred to in paragraph (a) of subsection (2) is not the first annual return of any of the relevant bodies, the condition referred to in paragraph (b) of that subsection is that there has been delivered to the Registrar, in compliance with section 343 , the annual return of each of the relevant bodies to which the particular relevant body’s statutory financial statements or (as appropriate) abridged financial statements for the preceding financial year were annexed.
(4) If the annual return referred to in paragraph (a) of subsection (2) is the first annual return of one or more, but not all, of the relevant bodies, the condition referred to in paragraph (b) of that subsection is that there has been delivered to the Registrar, in compliance with section 343 , the annual return of each of the relevant bodies (excluding any of them the annual return of which is its first annual return) to which the particular relevant body’s statutory financial statements or (as appropriate) abridged financial statements for the preceding financial year were annexed.
(5) In the case of—
(a) the annual return thirdly mentioned in subsection (2)(a), if that return is the company’s or other member’s first annual return, subsection (2)(a) shall have effect (in relation to the company or other member) as if the reference to statutory financial statements or abridged financial statements being annexed to that return were omitted,
(b) the annual return to which the condition referred to in subsection (3) or (4) applies (namely the annual return to which statutory financial statements or abridged financial statements for the preceding financial year are to be annexed) if that annual return is the relevant body’s first annual return, subsection (3) or (4), as the case may be, shall have effect (in relation to the relevant body) as if the reference to statutory financial statements or abridged financial statements being annexed to that return were omitted.
(6) There shall not be reckoned as another member of the group for the purposes of this section (other than for the purposes of the expression “other members of the group” in subsection (2)) a subsidiary undertaking that is not a company registered under this Act or an existing company and the construction provided for by subsection (1)(a) (of references to each of the relevant bodies) shall be read accordingly.
Special audit exemption for dormant companies
Dormant company audit exemption
365. (1) Subject to subsection (5), subsection (3) applies to a company in respect of its statutory financial statements for a financial year if the directors of the company are of the opinion that the company will satisfy the condition specified in subsection (2) in respect of that year and decide that the company should avail itself of subsection (3) in that year (and that decision is recorded by the directors in the minutes of the meeting concerned).
(2) The condition mentioned in subsection (1) is that in respect of the year concerned the company is dormant that is to say, during that year—
(a) it has no significant accounting transaction, and
(b) its assets and liabilities comprise only permitted assets and liabilities.
(3) The following provisions (the “dormant company audit exemption”) have effect where, by virtue of the preceding subsections, this subsection applies in respect of the statutory financial statements of a company for a particular financial year—
(a) without prejudice to section 384 (2), section 333 (obligation to have statutory financial statements audited) shall not apply to the company in respect of that financial year, and
(b) unless and until circumstances, if any, arise in that financial year by reason of which the company is not entitled to that audit exemption in respect of that financial year, the provisions specified in subsection (4) shall not apply to the company in respect of that year.
(4) The provisions mentioned in subsection (3) are those provisions of this Act, being provisions that—
(a) confer any powers on statutory auditors or require anything to be done by or to or as respects statutory auditors, or
(b) make provision on the basis of a report of statutory auditors having been prepared in relation to the statutory financial statements of a company in a financial year,
and, without prejudice to the generality of the foregoing, include the provisions specified in the Table to section 360 in so far, and only in so far, as they make provision of the foregoing kind.
(5) Section 363 shall apply for the purposes of this section as it applies for the purpose of section 358 with the substitution in subsection (1)—
(a) for the reference to section 358 being complied with of a reference to the condition specified in subsection (2) of this section being satisfied, and
(b) for the reference to the audit exemption referred to in section 358 of a reference to the dormant company audit exemption.
(6) Section 335 shall apply for the purposes of this section as it applies for the purpose of section 358 with—
(a) the substitution, in subsection (1), of the following paragraphs for paragraphs (a) and (b):
“(a) the company is availing itself of the audit exemption (and the exemption shall be expressed to be ‘the exemption provided for by Chapter 16 of Part 6 of the Companies Act 2014’);
(b) the company is availing itself of the exemption on the grounds that the condition specified in section 365 (2) is satisfied;”,
and
(b) the omission of subsections (1)(c) and (7).
(7) In this section—
“permitted assets and liabilities” are investments in shares of, and amounts due to or from, other group undertakings;
“significant accounting transaction” means a transaction that is required by sections 281 and 282 to be entered in the company’s accounting records.
(8) In determining whether or when a company is dormant for the purposes of this section, there shall be disregarded—
(a) any transaction arising from the taking of shares in the company by a subscriber to the constitution as a result of an undertaking of his or her in connection with the formation of the company,
(b) any transaction consisting of the payment of—
(i) a fee to the Registrar on a change of the company’s name,
(ii) a fee to the Registrar on the re-registration of the company, or
(iii) a fee to the Registrar for the registration of an annual return (including any fee of an increased amount by virtue of regulations under section 889 (6)).
The text in italics on this page is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.
S.I. No. 367/2018 –
European Union (Third-Country Auditors and Third-Country Audit Entities Equivalence, Transitional Period and Fees) Regulations 2018
“Iris Oifigiúil” of 21st September, 2018.
I, HEATHER HUMPHREYS, Minister for Business, Enterprise and Innovation, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving effect to Commission Decision 2011/30/EU of 19 January 20111 on the equivalence of certain third country public oversight, quality assurance, investigation and penalty systems for auditors and audit entities and a transitional period for audit activities of certain third country auditors and audit entities in the European Union, Commission Implementing Decision 2016/1155/EU of 14 July 20162 on the equivalence of the public oversight, quality assurance, investigation and penalty systems for auditors and audit entities of the United States of America pursuant to Directive 2006/43/EC of the European Parliament and of the Council and Commission Implementing Decision (EU) 2016/1223 of 25 July 20163 amending Commission Decision 2011/30/EU on the equivalence of certain third country public oversight, quality assurance, investigation and penalty systems for auditors and audit entities and a transitional period for audit activities of certain third country auditors and audit entities in the European Union, hereby make the following regulations:
1. (1) These Regulations may be cited as the European Union (Third-Country Auditors and Third-Country Audit Entities Equivalence, Transitional Period and Fees) Regulations 2018.
(2) These Regulations shall come into operation on 21 September 2018.
2. (1) In these Regulations—
“Act of 2014” means the Companies Act 2014 (No. 38 of 2014);
“Commission Decision” means Commission Decision 2011/30/EU of 19 January 2011 as amended by Commission Implementing Decision 2013/288/EU of 13 June 20134 amending Decision 2011/30/EU on the equivalence of certain third country public oversight, quality assurance, investigation and penalty systems for auditors and audit entities and a transitional period for audit activities of certain third country auditors and audit entities in the European Union and Commission Implementing Decision (EU) 2016/1223 of 25 July 2016;
“Commission Implementing Decision 2013” means Commission Implementing Decision 2013/280/EU of 11 June 20135 on the adequacy of the competent authorities of the United States of America pursuant to Directive 2006/43/EC of the European Parliament and of the Council;
“Commission Implementing Decision 2016” means Commission Implementing Decision 2016/1155/EU of 14 July 2016;
“relevant Articles” means Articles 29, 30 and 32 of the Audit Directive;
“Supervisory Authority” has the meaning given to it by section 900(1) of the Act of 2014;
“third-country auditor” means an individual who carries out audits of accounts or consolidated accounts of a company incorporated in a third country, other than an individual who is registered as a statutory auditor in any Member State as a consequence of approval in accordance with Articles 3 and 44 of the Audit Directive;
“third-country audit entity” means an entity, regardless of its legal form, which carries out audits of the accounts or consolidated accounts of a company incorporated in a third country, other than an entity which is registered as an audit firm in any Member State as a consequence of approval in accordance with Article 3 of the Audit Directive.
(2) A word or expression which is used in these Regulations and which is also used in the Commission Decision, Commission Implementing Decision 2013 or Commission Implementing Decision 2016 has, unless the contrary intention appears, the same meaning in these Regulations as it has in the Commission Decision, Commission Implementing Decision 2013 or Commission Implementing Decision 2016, as the case may be.
(3) Section 1461 of the Act of 2014 shall apply to the interpretation of these Regulations as that section applies to the interpretation of Part 27 of that Act.
3. (1) Subject to paragraph (2), in accordance with the first paragraph of Article 1 of the Commission Decision and for the purpose of Article 46(1) of the Audit Directive, the public oversight, quality assurance, investigation and penalty systems for third-country auditors and third-country audit entities of—
(a) Australia,
(b) Canada,
(c) China,
(d) Croatia,
(e) Japan,
(f) Singapore,
(g) South Africa,
(h) South Korea,
(i) Switzerland, and
(j) the United States of America,
meet requirements which shall be considered equivalent to those of the relevant Articles in relation to audit activities concerning the accounts or consolidated accounts for financial years starting from 2 July 2010.
(2) In accordance with Article 4 of the Commission Decision, paragraph (1) ceased to apply to the third country specified in paragraph (1)(j) on 31 July 2013.
(3) In accordance with the second paragraph of Article 1 of the Commission Decision and for the purpose of Article 46(1) of the Audit Directive, the public oversight, quality assurance, investigation and penalty systems for third-country auditors and third-country audit entities of—
(a) Abu Dhabi,
(b) Brazil,
(c) Dubai International Financial Centre,
(d) Guernsey,
(e) Indonesia,
(f) Isle of Man,
(g) Jersey,
(h) Malaysia,
(i) Taiwan, and
(j) Thailand,
meet requirements which shall be considered equivalent to those of the relevant Articles in relation to audit activities concerning the accounts or consolidated accounts for financial years starting from 1 August 2012.
(4) Subject to paragraph (5), in accordance with Article 1 of Commission Implementing Decision 2013 and for the purpose of Article 46(1) of the Audit Directive, the public oversight, quality assurance, investigation and penalty systems for auditors and audit entities of the United States of America meet requirements which shall be considered equivalent to those of the relevant Articles in relation to audit activities concerning the accounts or consolidated accounts for financial years starting from 1 August 2012.
(5) In accordance with Article 3 of Commission Implementing Decision 2013, paragraph (3) applied from 1 August 2013 to 31 July 2016.
(6) In accordance with the third paragraph of Article 1 of the Commission Decision and for the purpose of Article 46(1) of the Audit Directive, the public oversight, quality assurance, investigation and penalty systems for third-country auditors and third-country audit entities of—
(a) Mauritius,
(b) New Zealand, and
(c) Turkey,
meet requirements which shall be considered equivalent to those of the relevant Articles in relation to audit activities concerning accounts or consolidated accounts for financial years starting from 1 August 2016.
(7) Subject to paragraph (8), in accordance with Article 1 of Commission Implementing Decision 2016 and for the purpose of Article 46(1) of the Audit Directive, the public oversight, quality assurance, investigation and penalty systems for auditors and audit entities of the Securities and Exchange Commission of the United States of America and the Public Company Accounting Oversight Board of the United States of America shall be considered to meet requirements that are equivalent to those of the relevant Articles.
(8) In accordance with Article 3 of Commission Implementing Decision 2016, paragraph (7) shall apply from 1 August 2016 to 31 July 2022.
4. For the purpose of section 1580(2)(a) of the Act of 2014, the Commission—
(a) has carried out—
(i) for the purpose of Article 46(1) of the Audit Directive, an assessment, in respect of the third countries specified in paragraphs (1), (3), (4), (6) and (7) of Regulation 3, of the systems referred to in section 1580(1) of the Act of 2014, and
(ii) each assessment in accordance with Article 46 of the Audit Directive, and
(b) has, in respect of the third countries specified in paragraphs (1), (3), (4), (6) and (7) of Regulation 3, assessed the systems referred to in paragraph (a) as meeting the requirements equivalent to those in the corresponding provisions of the Audit Directive.
5. (1) This Regulation applies to the provision by a third-country auditor or third-country audit entity of an audit report concerning the accounts or consolidated accounts for a company incorporated in a third country specified in Annex I to the Commission Decision for a financial year starting during the period from 2 July 2010 to 31 July 2012 and Annex II to the Commission Decision for 2 July 2010 to 31 July 2018 where the transferable securities of such company are admitted to trading on a regulated market of the State within the meaning of point 14 of Article 4(1) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 20046 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC.
(2) A third-country auditor or third-country audit entity shall—
(a) provide the Supervisory Authority with all of the information specified in subparagraphs (a) to (e) of Article 2(1) of the Commission Decision and subparagraphs (a) to (e) of Article 2(2) of the Commission Decision, and
(b) pay the fee specified in Regulation 8.
(3) The Supervisory Authority shall—
(a) record the information provided in accordance with paragraph (2), and
(b) inform the public—
(i) of the name and address of third-country auditors and third-country audit entities that provide audit reports concerning the accounts or consolidated accounts of companies incorporated in the third countries specified in Annex I or Annex II to the Commission Decision, and
(ii) that the public oversight, quality assurance, investigation and penalty systems of those countries are not yet recognised as equivalent under Article 46(2) of the Audit Directive.
6. (1) A person shall not disclose, except in accordance with law, information that—
(a) is obtained by the Supervisory Authority pursuant to Regulation 5(2)(a) in so far as it relates to information provided to it in respect of subparagraph (e) of Article 2(1) of the Commission Decision or subparagraph (e) of Article 2(2) of the Commission Decision, or
(b) is required, in accordance with subparagraph (e) of Article 2(1) of the Commission Decision or subparagraph (e) of Article 2(2) of the Commission Decision, to be treated on a confidential basis.
(2) Without limiting paragraph (1), the persons to whom that paragraph applies include the following:
(a) a member or director, or former member or former director, of the Supervisory Authority;
(b) an employee, or former employee, of the Supervisory Authority;
(c) a professional or other advisor, or former professional or other advisor, to the Supervisory Authority.
(3) A person who contravenes paragraph (1) shall be guilty of an offence and shall be liable, on summary conviction, to a Class A fine.
(4) Proceedings for a summary offence under this Regulation may be brought and prosecuted by the Director of Corporate Enforcement.
7. (1) Article 2(2) of the Commission Decision is without prejudice to a cooperative arrangement on quality assurance reviews between the Supervisory Authority and the competent authority of a third country specified in Annex II to the Commission Decision if such cooperative arrangement—
(a) includes carrying out quality assurance reviews on the basis of equality of treatment,
(b) has been communicated in advance to the Commission, and
(c) does not pre-empt a Commission decision under Article 47 of the Audit Directive.
(2) Article 1 of Commission Implementing Decision 2013 shall be without prejudice to cooperative arrangements on individual quality assurance reviews between the Supervisory Authority and the competent authorities of the United States of America if such arrangement meets the criteria set out in Article 2 of Commission Implementing Decision 2013 and does not pre-empt any decision to be taken in accordance with Article 47(3) of the Audit Directive.
(3) Article 1 of Commission Implementing Decision 2016 shall be without prejudice to cooperative arrangements on individual quality assurance reviews between the Supervisory Authority and the competent authorities of the United States of America.
8. A third-country auditor or third-country audit entity referred to in Regulation 5(1) shall in each year pay a fee, for the purposes of administrative expenses incurred pursuant to these Regulations, of €2,000 to the Supervisory Authority.
9. The following Regulations are revoked:
(a) the European Union (Third Country Auditors and Audit Entities Equivalence, Transitional Period Measures and Fees) Regulations 2012 ( S.I. No. 312 of 2012 );
(b) the European Union (Third Country Auditors and Audit Entities Equivalence, Transitional Period and Fees) (Amendment) Regulations 2014 ( S.I. No. 555 of 2014 );
(c) the European Union (Third Country Auditors and Audit Entities Equivalence, Transitional Period and Fees) (Amendment) Regulations 2017 ( S.I. No. 67 of 2017 ).
/images/ls
GIVEN under my Official Seal,
19 September 2018.
HEATHER HUMPHREYS,
Minister for Business, Enterprise and Innovation.
EXPLANATORY NOTE
(This note is not part of the Instrument and does not purport to be a legal interpretation)
These Regulations consolidate three existing statutory instruments ( S.I. No. 312 of 2012 , S.I. No. 555 of 2014 and S.I. No. 67 of 2017 ) which transpose Commission Decisions and Commission Implementing Decisions.
These Decisions relate to the equivalence of certain third country public oversight, quality assurance, investigation and penalty systems for auditors and audit entities and a transitional period for audit activities of certain third country auditors and audit entities in the European Union, as provided for in Article 46 of the EU Audit Directive 2006/43/EC (as amended by Directive 2014/56/EU).
The following Regulations are revoked:
(a) the European Union (Third Country Auditors and Audit Entities Equivalence, Transitional Period Measures and Fees) Regulations 2012 ( S.I. No. 312 of 2012 );
(b) the European Union (Third Country Auditors and Audit Entities Equivalence, Transitional Period and Fees) (Amendment) Regulations 2014 ( S.I. No. 555 of 2014 );
(c) the European Union (Third Country Auditors and Audit Entities Equivalence, Transitional Period and Fees) (Amendment) Regulations 2017 ( S.I. No. 67 of 2017 ).
The Irish Auditing and Accounting Supervisory Authority (IAASA) is the competent authority in Ireland for the purposes of these Commission Decisions, Commission Implementing Decisions and these Regulations.
1 OJ L15, 20.1.2011, p. 12
2 OJ L190, 15.7.2016, p. 80
3 OJ L201, 27.7.2016, p. 23
4 OJ L163, 15.6.2013, p. 26
5 OJ L161, 13.6.2013, p. 4
6 OJ L145, 30.4.2004, p. 1
S.I. No. 597/2019 –
European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019
“Iris Oifigiúil” of 6th December, 2019.
I, HEATHER HUMPHREYS, Minister for Business, Enterprise and Innovation, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving further effect to Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC1 , hereby make the following regulations:
PART 1
PRELIMINARY AND GENERAL
Citation, commencement, application and construction
1. (1) These Regulations may be cited as the European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019.
(2) Subject to Regulation 2, these Regulations shall come into operation on 1 January 2020.
(3) Save where otherwise provided, these Regulations shall apply –
(a) in so far as they relate to a qualifying partnership, to the qualifying partnership’s financial years commencing on or after 1 January 2020, and
(b) in so far as they relate to an auditor of a qualifying partnership, to an auditor appointed in respect of financial years commencing on or after 1 January 2020.
(4) These Regulations shall be read as one with the Principal Act.
Revocation and transitional provisions
2. (1) Subject to paragraph (2), the Regulations of 1993 are revoked.
(2) The Regulations of 1993, to the extent that they are in force immediately before 1 January 2020, and in so far as they related to a qualifying partnership’s financial years commencing before that date, shall continue to apply to qualifying partnerships in respect of those financial years.
Interpretation
3. (1) In these Regulations –
“debenture”, in relation to a qualifying partnership, includes debenture stock, bonds and any other securities of the partnership whether constituting a charge on the assets of the partnership or not;
“designated ULC” means an unlimited company that is a designated ULC in accordance with section 1274 of the Principal Act;
“financial year”, in relation to a qualifying partnership, means any period of not more than 18 months in respect of which a profit and loss account of the partnership is required to be made up by or in accordance with any agreement governing the operation of the qualifying partnership or, where any agreement governing the operation of the qualifying partnership does not contain such a requirement, each period of 12 months beginning on 1 January of a given year;
“general partner” has the same meaning as it has in the Limited Partnerships Act 1907 (7 Edw. 7) c. 24;
“limited partnership” means a partnership registered in accordance with the Limited Partnerships Act 1907 ;
“partnership” has the same meaning as it has in the Partnership Act 1890 (53 & 54 Vict.) c. 39;
“Principal Act” means the Companies Act 2014 (No. 38 of 2014);
“qualifying partnership” has the meaning assigned to it by Regulation 5;
“regulated market” has the same meaning as it has in Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast)2 ;
“Regulations of 1993” means the European Communities (Accounts) Regulations 1993 ( S.I. No. 396 of 1993 );
“Regulations of 2017” means the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 (S.I. No. 360 of 2017).
(2) A word or expression which is used in these Regulations and is also used in –
(a) the Principal Act, or
(b) Directive 2013/34/EU of the European Parliament and of the Council on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC1
has, unless the context otherwise requires, the same meaning in these Regulations as it has in the Principal Act or in that Directive, as the case may be.
PART 2
AMENDMENT OF PRINCIPAL ACT
Amendment of Principal Act
4. The Principal Act is amended –
(a) in section 9(3), by the substitution of “the European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019” for “the European Communities (Accounts) Regulations 1993 ( S.I. No. 396 of 1993 ), as amended,”,
(b) in section 900(1) –
(i) by the deletion of the definition of “1993 Accounts Regulations”, and
(ii) by the insertion of the following definition:
“ ‘2019 Qualifying Partnerships Regulations’ means the European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019;”,
and
(c) in section 904(1)(c), by the substitution of “the 2019 Qualifying Partnerships Regulations” for “the 1993 Accounts Regulations”.
PART 3
QUALIFYING PARTNERSHIPS
Qualifying partnership
5. (1) In these Regulations, “qualifying partnership” means –
(a) a partnership, all of the members of which are –
(i) limited companies,
(ii) designated ULCs,
(iii) partnerships other than limited partnerships, all of the members of which are limited companies or designated ULCs,
(iv) limited partnerships, all of the general partners of which are limited companies or designated ULCs, or
(v) partnerships, including limited partnerships, the direct or indirect members of which include any combination of undertakings referred to in clauses (i) to (iv), such that the ultimate beneficial owners of the partnership enjoy the protection of limited liability,
or
(b) a limited partnership, all of the general partners of which are –
(i) limited companies,
(ii) designated ULCs,
(iii) partnerships other than limited partnerships, all of the members of which are limited companies or designated ULCs,
(iv) limited partnerships, all of the general partners of which are limited companies or designated ULCs, or
(v) partnerships, including limited partnerships, the direct or indirect members of which include any combination of undertakings referred to in clauses (i) to (iv), such that the ultimate beneficial owners of the partnership enjoy the protection of limited liability.
(2) References in paragraph (1) to a limited company, a designated ULC, a partnership or a limited partnership include references to any undertaking, whether governed by the law of the State or of another country or territory, that is comparable to such a limited company, designated ULC, partnership or limited partnership.
(3) Without prejudice to the generality of paragraph (2), for the purpose of this Regulation –
(a) an undertaking that is not governed by the law of the State shall be considered to be comparable to a limited partnership if –
(i) it is a partnership, or an undertaking comparable to a partnership,
(ii) it has at least one member with limited liability, and
(iii) it has at least one member without limited liability,
(b) in relation to an undertaking that is not governed by the law of the State and that is comparable to a limited partnership for the purpose of this Regulation, the reference in clauses (1)(a)(iv) and (1)(b)(iv) to general partners shall be construed as a reference to the members of the undertaking without limited liability.
(c) an undertaking –
(i) that is not governed by the law of the State, and
(ii) all of the members of which have limited liability,
shall be considered to be comparable to a limited company.
(4) These Regulations shall apply notwithstanding any change in the –
(a) partners,
(b) members, or
(c) direct or indirect members,
of a qualifying partnership that does not result in it ceasing to be a qualifying partnership.
(5) In this Regulation, in relation to a partnership or any other undertaking, the “ultimate beneficial owner” means the natural person or persons who ultimately own or control, directly or indirectly, the partnership or undertaking.
(6) For the purpose of this Regulation, in assessing whether an undertaking is comparable to a limited company, designated ULC, partnership or limited partnership, regard shall be had to whether the liability of persons holding shares (within the meaning of section 275(3) of the Principal Act) in the undertaking is limited.
References to members of qualifying partnership
6. (1) In these Regulations, a reference to the members of a qualifying partnership shall be construed in accordance with this Regulation.
(2) (a) In relation to a qualifying partnership that –
(i) is not a limited partnership, and
(ii) has at least one member that is a partnership other than a limited partnership,
the members of that qualifying partnership include any limited companies or designated ULCs that are members of the partnership or partnerships referred to in clause (ii).
(b) In relation to a qualifying partnership that –
(i) is not a limited partnership, and
(ii) has at least one member that is a limited partnership,
the members of that qualifying partnership include any limited companies or designated ULCs that are general partners in the limited partnership or limited partnerships referred to in clause (ii).
(3) (a) Where a qualifying partnership –
(i) is a limited partnership, and
(ii) has at least one member that is a partnership other than a limited partnership,
the members of that qualifying partnership include any limited companies or designated ULCs that are members of the partnership or partnerships referred to in clause (ii).
(b) Where a qualifying partnership –
(i) is a limited partnership, and
(ii) has at least one member that is a limited partnership,
the members of the qualifying partnership include any limited companies or designated ULCs that are general partners in the limited partnership or limited partnerships referred to in clause (ii).
(4) (a) In this Regulation, other than a reference to a qualifying partnership, a reference to –
(i) a partnership other than a limited partnership, or
(ii) a limited partnership,
includes a reference to any comparable undertaking whether governed by the laws of the State or of another country or territory.
(b) In this Regulation, a reference to –
(i) a limited company, or
(ii) a designated ULC
includes a reference to any comparable undertaking whether governed by the laws of the State or of another country or territory.
(5) For the purpose of this Regulation, in assessing whether an undertaking is comparable to a limited company, designated ULC, partnership or limited partnership, regard shall be had to whether the liability of persons holding shares (within the meaning of section 275(3) of the Principal Act) in the undertaking is limited.
(6) In these Regulations, unless otherwise specified, a reference to the members of a qualifying partnership that is a limited partnership shall be construed as a reference to its general partner or general partners, as the case may be.
PART 4
APPLICATION OF PART 6 OF PRINCIPAL ACT
Application of Part 6 of Principal Act
7. Subject to these Regulations, Part 6 of the Principal Act shall apply to a qualifying partnership as if it were a company formed and registered under the Principal Act subject to any modifications necessary to take account of the fact that the qualifying partnership is unincorporated.
Interpretation of terms in Part 6 of Principal Act
8. (1) A reference in Part 6 of the Principal Act to the directors or to the secretary of a company shall, in relation to a qualifying partnership, be construed as a reference to the members of the qualifying partnership and –
(a) any duties, obligations or discretion imposed on, or granted to, such directors or secretary under the Principal Act shall be deemed to be imposed on, or granted to, such members, and
(b) any duties, obligations or discretion jointly imposed on or jointly granted to both a director and the secretary of a company together under the Principal Act shall be construed as being imposed on or granted to –
(i) where a qualifying partnership is not a limited partnership, 2 members of the qualifying partnership, and
(ii) where the qualifying partnership is a limited partnership –
(I) if there is only one general partner, that partner, or
(II) if there is more than one general partner, 2 of their number.
(2) A reference in Part 6 of the Principal Act to the officers of a company shall, in relation to a qualifying partnership, be construed as a reference to the members of the qualifying partnership, and any duties, obligations or discretion imposed on, or granted to, such officers under the Principal Act shall be deemed to be imposed on, or granted to, such members.
(3) Save where otherwise provided, a reference in Part 6 of the Principal Act to a directors’ report shall, in relation to a qualifying partnership, be construed as a reference to the partners’ report prepared under Regulation 18.
(4) A reference in Part 6 of the Principal Act to the date of a company’s incorporation shall, in relation to a qualifying partnership, be construed as a reference to the date on which the qualifying partnership was formed.
(5) A reference in Part 6 of the Principal Act to an action that is to be or may be carried out at a general meeting of a company shall, in relation to a qualifying partnership, be construed as a reference to an action that is to be or may be carried out at a meeting of the partners, or as otherwise determined in accordance with the requirements of any agreement governing the operation of the partnership.
(6) A reference in Part 6 and Schedules 3, 3A, 3B, 4 and 4A of the Principal Act to shares or share capital shall, in relation to a qualifying partnership, be construed in accordance with section 275(3) of the Principal Act.
(7) Save where otherwise provided, in relation to a limited partnership, nothing in these Regulations shall be construed as conferring any duty, obligation or discretion on a limited partner in a manner that is inconsistent with the Limited Partnerships Act 1907 .
Non-application of Part 6 to qualifying partnerships that are credit institutions or insurance undertakings
9. (1) Part 6 of the Principal Act shall not apply to a qualifying partnership that is –
(a) a credit institution, or
(b) an insurance undertaking
to the extent provided for –
(i) by regulations made under section 3 of the European Communities Act 1972 to give effect to Community acts, or
(ii) by or under any other enactment,
relating to accounts of credit institutions and insurance undertakings.
(2) In paragraph (1) –
(i) credit institution, and
(ii) insurance undertaking
have the same meanings respectively as they have in section 275(1) of the Principal Act.
Application of definition of subsidiary undertaking
10. For the purposes of applying the definition of subsidiary undertaking in Part 6 of the Principal Act to a partnership –
(a) references to voting rights attaching to shares in a company shall be construed as references to votes or other rights exercisable by the partners in a partnership giving those partners the potential to exercise control or dominant influence over the activities of the partnership, and
(b) references to a company’s constitution shall be construed as references to any agreement governing the operation of the partnership.
Application of section 291 of Principal Act
11. Section 291 of the Principal Act shall apply to a qualifying partnership as if –
(a) subsections (3)(b), (6A)(b), (7) and (8) were omitted,
(b) subsection (3A) read:
“(3A) Companies Act entity financial statements shall state the following:
(a) the firm name of the qualifying partnership;
(b) in the case of a limited partnership, the place of registration and the number under which it is registered;
(c) the address of the qualifying partnership’s principal place of business;
(d) where the qualifying partnership is being wound up under the Principal Act, the information required by section 595.”,
(c) in subsection (4), the reference to “applicable accounting standards” were omitted, and
(d) in subsection (9), “subsections (2) to (6)” were substituted for “subsections (2) to (7)”.
Application of section 292 of Principal Act
12. Section 292 of the Principal Act shall apply to a qualifying partnership as if subsection (2A) read –
“(2A) IFRS entity financial statements shall state the following:
(a) the firm name of the qualifying partnership;
(b) in relation to a limited partnership, the place of registration and the number under which it is registered;
(c) the address of the qualifying partnership’s principal place of business;
(d) where the qualifying partnership is being wound up under the Principal Act, the information required by section 595.”.
Application of section 294 of Principal Act
13. Section 294 of the Principal Act shall apply to a qualifying partnership as if –
(a) in subsection (1), “in relation to a holding undertaking that is a qualifying partnership” were substituted for “in relation to a holding company”, and every subsequent reference to “the holding company” in that section were read accordingly,
(b) subsections (3)(b), (7) and (8) were omitted,
(c) subsection (3A) read:
“(3A) Companies Act group financial statements shall state the following:
(a) the firm name of the qualifying partnership that is a holding undertaking;
(b) in relation to a limited partnership, the place of registration and the number under which it is registered;
(c) the address of the qualifying partnership’s principal place of business;
(d) where the qualifying partnership is being wound up under the Principal Act, the information required by section 595.”,
(d) in subsection (4), the reference to “applicable accounting standards” were omitted, and
(e) in subsection (9), “subsections (2) to (6)” were substituted for “subsections (2) to (7)”.
Application of section 295 of Principal Act
14. Section 295 of the Principal Act shall apply to a qualifying partnership as if –
(a) “partners in a holding undertaking that is a qualifying partnership” were substituted for “directors of a holding company”, and every subsequent reference to “the holding company” in that section were read accordingly, and
(b) subsection (2A) read:
“(2A) IFRS group financial statements shall state the following:
(a) the firm name of the qualifying partnership that is a holding undertaking;
(b) in relation to a limited partnership, the place of registration and the number under which it is registered;
(c) the address of the qualifying partnership’s principal place of business;
(d) where the qualifying partnership is being wound up under the Principal Act, the information required by section 595.”.
Non-application of certain provisions of Principal Act
15. Sections 281 to 286, 305A, 312, 318, 319, 325(1)(c), (d) and (e), 326(1)(c) and (d) and (2)(d), 328, 338, 339, 341, 375, 381 to 385, 392, 396 to 398, 401 and 402 of the Principal Act shall not apply to a qualifying partnership.
Application of section 320 of Principal Act
16. Section 320 of the Principal Act shall apply to a qualifying partnership only in so far as that qualifying partnership holds shares in its holding undertaking or an interest in such shares.
Application of section 324 of Principal Act
17. Section 324 of the Principal Act shall apply to a qualifying partnership subject to the following modifications:
(a) where a qualifying partnership is not a limited partnership, the statutory financial statements shall be approved by the members and signed on their behalf by at least 2 of their number;
(b) where the qualifying partnership is a limited partnership –
(i) if there is only one general partner, the statutory financial statements shall be approved by that partner and shall bear the signature of that partner, or
(ii) if there is more than one general partner, the statutory financial statements shall be approved by the general partners and signed on their behalf by at least 2 of their number.
Application of section 325 of Principal Act
18. Subject to this Regulation and to Regulation 15, the members of a qualifying partnership shall prepare a report (in these Regulations referred to as a “partners’ report”) in accordance with the requirements of section 325 of the Principal Act as if –
(a) every reference to the company mentioned in subsection (1) of that section were a reference to the qualifying partnership,
(b) every reference to a director were a reference to the members of the qualifying partnership,
(c) paragraph (3)(a) read “the qualifying partnership is a holding undertaking, and”, and
(d) every reference to a “group directors’ report” were a reference to a “group partners’ report”.
Application of section 332 of Principal Act
19. Section 332 of the Principal Act shall apply to a qualifying partnership with the following modifications:
(a) where the qualifying partnership is not a limited partnership, the partners’ report shall be approved by the members and signed on their behalf by at least 2 of their number;
(b) where the qualifying partnership is a limited partnership –
(i) if there is only one general partner, the partners’ report shall be approved by that general partner and shall bear the signature of that partner, or
(ii) if there is more than one general partner, the partners’ report shall be approved by the general partners and signed on their behalf by at least 2 of their number.
Application of section 334 of Principal Act
20. A partner in a qualifying partnership, including a limited partner in a limited partnership, may serve the notice referred to in section 334(1) of the Principal Act on the qualifying partnership stating that the partner does not wish the audit exemption to be availed of by the qualifying partnership in the financial year specified in the notice.
Application of section 343 of Principal Act
21. Section 343(4) of the Principal Act shall apply to a qualifying partnership as if it read:
“(4) An annual return of a qualifying partnership shall –
(a) be in the form specified by the Minister, and
(b) be made up to a date that is not later than its annual return date, except that the first annual return falling to be made by a qualifying partnership after it is formed shall be made up to the date that is its first annual return date.”.
Application of section 347 of Principal Act
22. Section 347(1) of the Principal Act shall apply to a qualifying partnership as if it read:
“(1) Subject to the provisions of this Part, there shall be annexed to the annual return a copy of the following documents:
(a) the statutory financial statements of the qualifying partnership;
(b) the partners’ report, including any group partners’ report;
(c) the statutory auditors’ report on those financial statements and that partners’ report.”.
Application of section 352 of Principal Act
23. Section 352(4)(b) of the Principal Act shall apply to a qualifying partnership with the following modifications:
(a) where the qualifying partnership is not a limited partnership, the certificate shall be of at least 2 members of the qualifying partnership and shall bear the signature of those members;
(b) where the qualifying partnership is a limited partnership –
(i) if there is only one general partner, the certificate shall be of that partner and shall bear that partner’s signature, or
(ii) if there is more than one general partner, the certificate shall be of at least 2 general partners and shall bear the signature of those partners.
Application of section 353 of Principal Act
24. The references in section 353(2)(b) and (3)(b) of the Principal Act to sections 305 to 321 shall, in relation to a qualifying partnership –
(a) be read as excluding sections 305A, 318, 319 and, subject to paragraph (b), section 320 of the Principal Act, and
(b) notwithstanding paragraph (a), where the qualifying partnership concerned holds shares in its holding undertaking, or an interest in such shares, be read as including section 320 of the Principal Act.
Application of section 355 of Principal Act
25. Section 355 of the Principal Act shall apply to a qualifying partnership subject to the following modifications:
(a) where the qualifying partnership is not a limited partnership, the abridged financial statements referred to in subsection 355(1) of the Principal Act shall be approved by the members and signed on their behalf by at least 2 of their number;
(b) where the qualifying partnership is a limited partnership –
(i) if there is only one general partner, the abridged financial statements referred to in subsection 355(1) of the Principal Act shall be approved by that general partner and shall bear the signature of that partner, or
(ii) if there is more than one general partner, the abridged financial statements referred to in subsection 355(1) of the Principal Act shall be approved by the general partners and signed on their behalf by at least 2 of their number.
Application of section 357 of Principal Act
26. The reference in section 357(1)(a) of the Principal Act to every person who is a shareholder declaring his or her consent shall, in relation to a qualifying partnership, be construed as a reference to every person who is a partner, including a limited partner, declaring his or her consent.
Application of section 380 of Principal Act
27. Section 380 of the Principal Act shall apply to a qualifying partnership as if –
(a) subsection (1) read:
“(1) The partners in a qualifying partnership shall appoint one or more statutory auditors for each financial year of the partnership.”,
and
(b) subsection (5) were omitted.
Application of section 387 of Principal Act
28. Notwithstanding Regulation 8(2), the reference in section 387(4) of the Principal Act to “an officer, in relation to a company” shall, in relation to a qualifying partnership, be construed as including a reference to any employee of the partnership.
Application of section 389 of Principal Act
29. Notwithstanding Regulation 8(2), the reference in section 389(3) of the Principal Act to an officer, in relation to a company, shall, in relation to a qualifying partnership, be construed as including –
(a) a limited partner, and
(b) any employee of the partnership.
Application of section 391 of Principal Act
30. The reference in section 391 of the Principal Act to a report to the members shall, in relation to a qualifying partnership, be construed as a reference to a report to the partners.
Application of section 393 of Principal Act
31. Section 393 of the Principal Act shall apply to a qualifying partnership as if, in subsection (1), “an offence under Regulation 42(1), (7), (8), (10), (11) or (12) of the European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019” were substituted for “a category 1 or 2 offence”.
Application of section 394 of Principal Act
32. Section 394 of the Principal Act shall apply to a qualifying partnership as if it read:
“394. The partners in a qualifying partnership may remove a statutory auditor from office before the end of the auditor’s term of office and appoint, in his or her place, any other person or persons, being a person or persons who is or are qualified by virtue of Part 27 to be statutory auditors of the company, but this is subject to section 395.”.
Application of section 395 of Principal Act
33. Section 395 of the Principal Act shall apply to a qualifying partnership as if it read:
“395. (1) A statutory auditor of a qualifying partnership shall not be removed from office before the end of that auditor’s term of office unless there are good and substantial grounds for the removal related to the conduct of the auditor with regard to the performance of his or her duties as auditor of the qualifying partnership or otherwise.
(2) For the purpose of paragraph (1), diverging opinions on accounting treatments or audit procedures cannot constitute good and substantial grounds for the removal from office of a statutory auditor.”.
Application of section 399 of Principal Act
34. Section 399 of the Principal Act shall apply to a qualifying partnership as if subsections (3)(b), (4), (5) and (6) were omitted.
Application of section 400 of Principal Act
35. Section 400 of the Principal Act shall apply to a qualifying partnership as if subsections (4)(b), (5), (6), (7), (8)(b) and (9) were omitted.
Application of section 403 of Principal Act
36. Section 403 of the Principal Act shall apply to a qualifying partnership as if it read:
“403. (1) Where, for any reason, a statutory auditor of a qualifying partnership ceases to hold office before the end of the auditor’s term of office, the auditor shall –
(a) in such form and manner as the Supervisory Authority specifies, and
(b) within 30 days after the date of that cessation,
notify the Supervisory Authority that the auditor has ceased to hold office.
(2) The notification under paragraph (1) shall be accompanied by –
(a) in the case of resignation of the auditor, the notice served by the auditor under section 400(1), and
(b) a copy of any representations in writing made to the qualifying partnership by the outgoing auditor in relation to the auditor ceasing to hold office.
(3) Where –
(a) a statutory auditor ceases to hold office due to his or her resignation, and
(b) the notice served under section 400(1) states that there are no circumstances connected with the resignation to which it relates that the auditor concerned considers should be brought to the notice of partners in or creditors of the partnership,
the notice shall be accompanied by a statement of the reasons for the auditor’s resignation.”.
Application of section 404 of Principal Act
37. Section 404 of the Principal Act shall apply to a qualifying partnership as if it read:
“404. (1) Where, for any reason, a statutory auditor of a qualifying partnership ceases to hold office before the end of the auditor’s term of office, the partners in the qualifying partnership shall –
(a) in such form and manner as the Supervisory Authority specifies, and
(b) within 30 days after the date of that cessation,
notify the Supervisory Authority that the auditor has ceased to hold office.
(2) The notification under subsection (1) shall be accompanied by –
(a) a statement by the partners of the reasons for the auditor’s ceasing to hold office, and
(b) a copy of any representations in writing made to the qualifying partnership by the outgoing auditor in relation to the auditor ceasing to hold office.”.
PART 5
APPLICATION OF SECTION 1373 OF PRINCIPAL ACT
Application of section 1373 of Principal Act
38. (1) Subject to these Regulations, where a qualifying partnership has debentures admitted to trading on a regulated market in an EEA state, the members of the qualifying partnership at the end of a financial year shall apply section 1373 of the Principal Act to the qualifying partnership, as if the partnership were a company formed and registered under the Principal Act subject to the following modifications:
(a) a reference in section 1373 of the Principal Act to a traded company shall be read as a reference to a qualifying partnership that has debentures admitted to trading on a regulated market in an EEA state;
(b) any other modifications necessary to take account of the fact that the qualifying partnership is unincorporated.
(2) Where a qualifying partnership prepares a corporate governance statement in the form of a separate report, section 1373(4) of the Principal Act shall apply to the qualifying partnership subject to the following modifications:
(a) where the qualifying partnership is not a limited partnership, the separate corporate governance statement shall be approved by the members of the qualifying partnership and signed on their behalf by at least 2 of their number;
(b) where the qualifying partnership is a limited partnership –
(i) if there is only one general partner, the separate corporate governance statement shall be approved by that partner and shall bear the signature of that partner, or
(ii) if there is more than one general partner, the separate corporate governance statement shall be approved by the general partners and signed on their behalf by 2 of their number.
(3) A reference in section 1373 of the Principal Act to the directors or the secretary of a company shall, in relation to a qualifying partnership, be construed in the same manner as is provided for in Regulation 8(1).
PART 6
APPLICATION OF PART 26 OF PRINCIPAL ACT
Application of Part 26 of Principal Act – general
39. (1) Subject to these Regulations, the members of a qualifying partnership shall, at the end of the financial year of the qualifying partnership, apply Part 26 of the Principal Act to the qualifying partnership, as if the qualifying partnership were a company formed and registered under the Principal Act subject to any modifications necessary to take account of the fact that the qualifying partnership is unincorporated.
(2) A reference in Part 26 of the Principal Act to the directors or the secretary of a company shall, in relation to a qualifying partnership, be construed in the same manner as is provided for in Regulation 8(1).
(3) A reference in Part 26 of the Principal Act to the officers of a company shall, in relation to a qualifying partnership, be construed in the same manner as is provided for in Regulation 8(2).
Application of section 1458 of Principal Act
40. Section 1458 of the Principal Act shall apply to a qualifying partnership subject to the following modifications:
(a) where the qualifying partnership is not a limited partnership, the entity payment report or consolidated payment report shall be approved by the members and signed on their behalf by at least 2 of their number;
(b) where the qualifying partnership is a limited partnership –
(i) if there is only one general partner, the entity payment report or consolidated payment report shall be approved by that general partner and shall bear the signature of that partner, or
(ii) if there is more than one general partner, the entity payment report or consolidated payment report shall be approved by the general partners and signed on their behalf by 2 of their number.
PART 7
DISCLOSURE OF NON-FINANCIAL AND DIVERSITY INFORMATION
Disclosure of Non-Financial and Diversity Information
41. (1) Subject to these Regulations, the members of a qualifying partnership shall, at the end of the financial year of the partnership, apply the Regulations of 2017 to the qualifying partnership, as if the qualifying partnership were a company formed and registered under the Principal Act subject to any modifications necessary to take account of the fact that the qualifying partnership is unincorporated.
(2) A reference in the Regulations of 2017 to the directors of a company shall, in relation to a qualifying partnership, be construed in the same manner as is provided for in Regulation 8(1).
(3) A reference in the Regulations of 2017 to a directors’ report shall, in relation to a qualifying partnership, be construed in the same manner as is provided for in Regulation 8(3).
(4) A reference in the Regulations of 2017 to an action that is to be or may be carried out at a general meeting of a company shall, in relation to a qualifying partnership, be construed in the same manner as is provided for in Regulation 8(5).
(5) A reference in the Regulations of 2017 to shares or share capital shall, in relation to a qualifying partnership, be construed in the same manner as is provided for in Regulation 8(6).
(6) A reference in the Regulations of 2017 to a “holding company” shall, in relation to a qualifying partnership, be read as a reference to a holding undertaking.
PART 8
OFFENCES
Offences
42. (1) A qualifying partnership that fails to comply with any provision referred to in sections 291(9), 292(3), 294(9), 295(3), 324(6), 324(8), 355(7), 355(9), 356(5) or 1458(4) of the Principal Act as applied by these Regulations commits an offence.
(2) Where an offence under paragraph (1) is committed by a qualifying partnership and it is proved that the offence was committed with the consent or connivance, or was attributable to any wilful neglect, of a person who was –
(a) a member of the qualifying partnership,
(b) a director of such a member, or
(c) a person purporting to act in either such capacity,
that person shall, as well as the qualifying partnership, be guilty of an offence and may be proceeded against and punished as if he or she were guilty of the first-mentioned offence.
(3) A person who commits an offence under paragraphs (1) or (2) shall be liable –
(a) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months or both, or
(b) on conviction on indictment, to a fine not exceeding €50,000 or imprisonment for a term not exceeding 3 years or both.
(4) In any proceedings against a person in respect of an offence referred to in sections 291(9), 292(3), 294(9) or 295(3) of the Principal Act as applied by these Regulations it shall be a defence to prove that the person had reasonable grounds for believing and did believe that –
(a) a competent and reliable person was charged with the duty of ensuring that the relevant provisions were complied with, and
(b) the latter person was in a position to discharge that duty.
(5) (a) A qualifying partnership that fails to comply with any provision referred to in sections 316(3), 325(6), 332(4), 335(3), 335(6), 337(5), 340(7), 343(11), 347(5), 348(6), 374(4), 376(3), 377(7), 1459 or 1460 of the Principal Act as applied by these Regulations commits an offence.
(b) Where an offence under subparagraph (a) is committed by a qualifying partnership and it is proved that the offence was committed with the consent or connivance, or was attributable to any wilful neglect, of a person who was –
(i) a member of the qualifying partnership,
(ii) a director of such a member, or
(iii) a person purporting to act in either such capacity,
that person shall, as well as the qualifying partnership, be guilty of an offence and may be proceeded against and punished as if he or she were guilty of the first-mentioned offence.
(6) A person who commits an offence under paragraph (5) shall be liable, on summary conviction, to a class A fine or imprisonment for a term not exceeding 6 months or both.
(7) If any person who is a –
(a) partner in a qualifying partnership,
(b) employee of a qualifying partnership, or
(c) director of a member of a qualifying partnership,
fails to comply with a requirement referred to in section 387 of the Principal Act as applied by these Regulations, that person commits an offence and shall be liable –
(i) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months or both, or
(ii) on conviction on indictment, to a fine not exceeding €50,000 or imprisonment for a term not exceeding 3 years or both.
(8) If an undertaking, body or other person fails to comply with a requirement referred to in section 388 of the Principal Act as applied by these Regulations, that undertaking, body or other person, and any officer or employee of that undertaking, body or other person, shall be guilty of an offence and shall be liable –
(a) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months or both, or
(b) on conviction on indictment, to a fine not exceeding €50,000 or imprisonment for a term not exceeding 3 years or both.
(9) In any proceedings against a person in respect of an offence referred to in section 387 or 388 of the Principal Act as applied by these Regulations, it shall be a defence to prove –
(a) that it was not reasonably possible for the person to comply with the requirement to which the offence relates within the time specified in the relevant provision of the Principal Act, and
(b) that the person complied with the requirement to which the offence relates as soon as was reasonably possible after the expiration of such time.
(10) If a person who is a partner in, or employee of, a qualifying partnership makes a statement referred to in section 389 of the Principal Act as applied by these Regulations –
(a) knowing that it is misleading or false in a material particular, or
(b) being reckless as to whether it is misleading or false in a material particular,
that person commits an offence and shall be liable –
(i) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months or both, or
(ii) on conviction on indictment, to a fine not exceeding €50,000 or imprisonment for a term not exceeding 3 years or both.
(11) If a person who is subject to, or is deemed to be subject to, a disqualification order (within the meaning of Chapter 4 of Part 14 of the Principal Act) –
(a) gives directions or instructions in relation to the conduct of any part of the audit of the financial statements of a qualifying partnership, or
(b) works in any capacity in the conduct of an audit of the financial statements of a qualifying partnership,
he or she shall be guilty of an offence and shall be liable –
(i) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months or both, or
(ii) on conviction on indictment, to a fine not exceeding €50,000 or imprisonment for a term not exceeding 3 years or both.
(12) If a person in any return, statement, financial statement or other document required by or for the purposes of these Regulations intentionally makes a statement that is false in any material particular, knowing it to be so false, the person shall be guilty of an offence and shall be liable –
(a) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months or both, or
(b) on conviction on indictment, to a fine not exceeding €50,000 or imprisonment for a term not exceeding 3 years or both.
(13) If a person, being the statutory auditor of a qualifying partnership, fails to comply with a requirement referred to in section 393(6) or 400(8)(a) of the Principal Act as applied by these Regulations, that person shall be guilty of an offence and shall be liable on summary conviction to a class A fine or imprisonment for a term not exceeding 6 months or both.
(14) (a) A qualifying partnership that fails to comply with Regulations 5(1), 5(2), 5(3), 5(4), 5(6), 5(9), 5(10), 6(1), 6(2) or 6(3) of the Regulations of 2017 as applied by these Regulations commits an offence.
(b) Where an offence under subparagraph (a) is committed by a qualifying partnership and it is proved that the offence was committed with the consent or connivance, or was attributable to any wilful neglect, of a person who was –
(i) a member of the qualifying partnership,
(ii) a director of such a member, or
(iii) a person purporting to act in either such capacity,
that person shall, as well as the qualifying partnership, be guilty of an offence and may be proceeded against and punished as if he or she were guilty of the first-mentioned offence.
(c) A person who commits an offence under subparagraphs (a) or (b) shall be liable on summary conviction to a class A fine or to imprisonment for a term not exceeding 6 months, or to both.
(15) Summary proceedings in relation to an offence under these Regulations may be brought and prosecuted by the Director of Corporate Enforcement.
(16) Without prejudice to the generality of paragraph (15), summary proceedings in relation to an offence referred to in section 343(11), 1459 or 1460 of the Principal Act as applied by these Regulations may be brought and prosecuted by the Registrar of Companies.
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GIVEN under my Official Seal,
29 November, 2019.
HEATHER HUMPHREYS
Minister for Business, Enterprise and Innovation.
EXPLANATORY NOTE
(This note is not part of the Regulations and does not purport to be a legal interpretation)
The purpose of the Regulations is to give further effect to the transposed provisions of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings (the Accounting Directive) to partnerships and limited partnerships where Article 1(1)(b) of that Directive requires it. The Regulations revoke the European Communities (Accounts) Regulations 1993 (S.I. 396 of 1996).
The Regulations are in 8 Parts as follows:
PART 1 of the Regulations addresses preliminary matters, including definitions, and revokes the European Communities (Accounts) Regulations 1993 ( S.I. No. 396 of 1993 ).
PART 2 of the Regulations provides for amendments of the Companies Act 2014 , substituting references to the present Regulations for those that are to be revoked.
PART 3 of the Regulations provides a definition of “Qualifying Partnership” and also provides for how a reference to members of a qualifying partnership shall be construed.
PART 4 of the Regulations requires the members of a qualifying partnership to apply Part 6 of the Companies Act 2014 to the partnership. The Part also provides for the interpretation of terms such as “director”, “officer”, “shares” and “share Capital” in the context of a partnership.
PART 5 of the Regulations provides for the preparation of a corporate governance statement in the event that a qualifying partnership has debentures admitted to trading on a regulated market.
PART 6 of the Regulations applies Part 26 of the Companies Act 2014 to qualifying partnerships.
PART 7 of the Regulations provides for the application of the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 (S.I. No. 360 of 2017) in the event that a qualifying partnership falls within the scope.
PART 8 of the Regulations provides for offences and penalties.
The Regulations amend the Companies Act 2014 .
The Regulations revokes the European Communities (Accounts) Regulation 1993 (S.I. 396 of 1996).
1 OJ No. L 182, 29.6.13, p.19
2 OJ No. L 173, 12.6.2014, p. 349
1 OJ No. L 182, 29.6.13, p.19