Auditor Termination
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.