2.
Company Secretarial Spring Briefing February 2011

3.
Course Outline <ul><li>New Company Law Legislation </li></ul><ul><li>10 things to do in 2011 in your Company Secretarial Department </li></ul>

4.
Company Law Legislation

5.
Company Law Legislation <ul><li>European Communities (Statutory Audits) Regulations 2010 </li></ul><ul><li>Corporate Governance Code for Credit Institutions & Insurance Undertakings </li></ul><ul><li>Criminal Justice (Money Laundering & Terrorist Financing) Act 2010 </li></ul><ul><li>Multi-Unit Development Bill 2010 </li></ul><ul><li>Companies Consolidation & Reform Bill </li></ul>

6.
European Communities (Statutory Audits) Regulations

7.
Statutory Audits Regulations <ul><li>Signed into law on 20 th May 2010 </li></ul><ul><li>Rules & obligations regarding statutory audits, statutory auditors & audit firms, the entities being audited and IAASA </li></ul><ul><li>Rules applicable to all firms & further obligations on “Public Interest Entities” </li></ul>

8.
Public Interest Entities <ul><li>(a) companies or other bodies corporate governed by the law of a Member State whose transferable securities are admitted to trading on a regulated market of any Member State within the meaning of point 14 of Article 4(1) of Directive 2004/39/EC, </li></ul><ul><li>(b) credit institutions as defined in point 1 of Article 1 of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions, and </li></ul><ul><li>(c) insurance undertakings within the meaning of Article 2(1) of Directive 91/674/EEC; </li></ul>

9.
Main Provisions <ul><li>Permitting Statutory Auditors to operate as body corporate; </li></ul><ul><li>- deletes Sec 187(2) CA, 1963 </li></ul><ul><li>- statutory auditors & audit firm can operate as limited companies </li></ul><ul><li>- Cannot be a company if firm audits credit unions, friendly or industrial and provident society </li></ul>

10.
Main Provisions <ul><li>Incoming Statutory Auditor afforded access to information </li></ul><ul><li>Requirements relating to signing of audit reports </li></ul><ul><li>- audit reports shall state individual name of auditor & be signed and dated </li></ul><ul><li>- financial years on or after 20 May 2010 </li></ul><ul><li>Transparency report of Public Interest Entities </li></ul><ul><li>- publish within 3 months of year end or auditor on website </li></ul><ul><li>- Provides details of the governance structure </li></ul>

11.
Main Provisions <ul><li>Removal of Auditor & Notification Obligations </li></ul><ul><li>- If Auditor resigns or is removed they must notify IAASA within 1 month </li></ul><ul><li>Public Register of Auditors </li></ul><ul><li>- Maintained by CRO </li></ul><ul><li>- auditors to notify their institute of any changes </li></ul>

12.
Main Provisions <ul><li>Independence Provisions for Auditors </li></ul><ul><li>- An auditor may not carry out an statutory audit if there is a relationship (direct or indirect financial, business, employment) between it & entity </li></ul><ul><li>- Auditor must have safeguards to mitigate threats to independence </li></ul>

13.
Main Provisions <ul><li>Audit Committees for Public Interest Entities </li></ul><ul><li>- 2 independent directors, 1 with competence in accounting & auditing </li></ul><ul><li>- Responsibilities for monitoring financial reporting process, monitoring the effectiveness of the company’s systems of control, internal audit and risk management & audit of annual accounts </li></ul>

14.
Main Provisions <ul><li>Disclosure of Auditors’ Remuneration of audit & non-audit work </li></ul><ul><li>- audit individual accounts, other assurance services, tax advisory services, other non- audit services </li></ul><ul><li>Statutory obligations regarding continuing education, professional ethics, independence and objectivity </li></ul>

15.
Corporate Governance Code for Credit Institutions & Insurance Undertakings

16.
Corporate Governance Code for Credit Institutions & Insurance Undertakings <ul><li>Central Bank issued new Corporate Governance Code on 8 th November 2010 </li></ul><ul><li>Applies to all credit institutions & insurance undertakings licensed or authorised by Central Bank (includes reinsurers) </li></ul><ul><li>Applicable from 1 st January 2011, & 31 December 2011 if changes req to board </li></ul>

17.
Main Provisions <ul><li>Boards must have a minimum of seven directors in major institutions and a minimum of five in all others; </li></ul><ul><li>Requirements on the role and number of independent non-executive directors; </li></ul><ul><li>Criteria for director independence and consideration of conflicts of interest; </li></ul>

18.
Main Provisions <ul><li>Limits on the number of directorships which directors may hold in financial and non financial companies to ensure they can comply with the expected demands of board membership of a credit institution or insurance company; </li></ul><ul><li>Clear separation of the roles of Chairman and CEO; </li></ul><ul><li>A prohibition on an individual who has been a CEO, director or senior manager during the previous five years from becoming Chairman of that institution; </li></ul>

19.
Main Provisions <ul><li>A requirement that board membership is reviewed at a minimum every three years </li></ul><ul><li>A requirement that boards set the risk appetite for the institution and monitor adherence to this on an ongoing basis; </li></ul><ul><li>Minimum requirements for board committees including audit and risk committees; </li></ul><ul><li>A requirement for an annual confirmation of compliance to be submitted to the Central Bank. </li></ul>

20.
Criminal Justice (Money Laundering & Terrorist Financing) Act 2010

21.
Main Provisions <ul><li>Passed on 15 th July 2010 - Transposes Third EU Money Laundering Directive </li></ul><ul><li>The Bill consolidates all of Ireland’s anti-money laundering legislation in a single statute </li></ul><ul><li>Increases obligations on credit & financial institutions, lawyers, accountants, estate agents, trust & company service providers, tax advisors & others </li></ul>

22.
Designated Person <ul><li>“ a credit or a financial institution unless specifically excepted, an auditor, external accountant or tax advisor, a relevant independent legal professional, a trust or company service provider, a property service provider, a casino, a person who directs a private members club at which gambling activities are carried out, a person trading in goods in respect of transactions involving the receipt of cash of at least €15,000” </li></ul>

23.
“ Trust & Corporate Service Providers” - TSCP <ul><li>any person whose business involves forming companies; acting as a director or secretary of a company under an arrangement with a person other than that company; arranging for another person to act as director or secretary of a company, as a partner of a partnership or trustee of a trust, acting or arranging for another person to act as a nominee shareholder for a person other than a listed company; or providing a registered office, business address, correspondence or administrative address or other related services </li></ul>“ Trust & Corporate Service Providers” - TSCP – any person whose business involves forming companies; acting as a director or secretary of a company under an arrangement with a person other that that company; arranging for another person to act as director or secretary of a company, as a partner of a partnership or trustee of a trust, acting or arranging for another person to act as a nominee shareholder for a person other than a listed company; or providing a registered office, business address, correspondence or administrative address or other related services

24.
Main Provisions <ul><li>The definition of money laundering has been widened to include the proceeds of any criminal conduct. </li></ul><ul><li>The terminology of ‘know your customer’ (KYC) has been replaced with ‘customer due diligence’ (CDD). </li></ul><ul><li>The level of CDD required will be determined using a risk-based approach. This can range from ‘simplified’ CDD, where there is a low risk, to ‘enhanced’ CDD, where there is a high risk of money laundering or terrorist financing. </li></ul>

25.
Main Provisions <ul><li>CCD requires the identification and verification of a business relationship with a customer. This relationship should be monitored for the suspicion of money laundering and terrorist financing on an ongoing basis. </li></ul><ul><li>There is an obligation to identify a ‘beneficial owner’. The designated person must ensure that they take adequate measures to understand the ownership and control structure of the client. </li></ul>

26.
Main Provisions <ul><li>There is a new requirement to identify politically exposed persons (PEP) as defined in the Act. </li></ul><ul><li>Designated persons are permitted to rely on third parties to meet the CDD requirements. </li></ul><ul><li>Those persons who meet the definition of ‘trust and company services provider’ will need to be authorised by the Minister for Justice and Law Reform. </li></ul><ul><li>Any person who directs a private members’ gaming club must register with the Minister. </li></ul>

27.
Main Provisions <ul><li>Designated persons are required to report suspicions of money laundering or terrorist financing to the Gardai Siochana and the Revenue Commissioners. </li></ul><ul><li>The Act provides that designated persons should have internal policies and procedures in place to provide training for staff on the legislation. They should also keep records of this for a period of five years. </li></ul><ul><li>The Minister will approve Guidance Notes to be used by designated persons and which can be used as a defence in Court by the designated person in determining if a that person took all appropriate measures </li></ul>

28.
Other Legislation <ul><li>Companies Consolidation & Reform Bill </li></ul><ul><li>- Due to be published in 2013 </li></ul><ul><li>- Enacted in 2014 </li></ul><ul><li>CLRG Work Programme </li></ul><ul><li>- Making charging orders over shares </li></ul><ul><li>- Provisions on the re-use of CRO info </li></ul><ul><li>- Review of Public Accounts Committee report on Loss of Taxes arising from abuse of limited liability </li></ul>

29.
Multi Unit Development Act 2010 <ul><li>Multi-Unit Development Act </li></ul><ul><li>- signed into law 24 January 2011 </li></ul><ul><li>- commencement orders due to be signed in next 4-6 weeks </li></ul><ul><li>- Developers will have 6 months to comply with Act </li></ul>

30.
MUD Act 2010 – Main Provisions <ul><li>a multi-unit development (“MUD”) as a development being land on which there stands erected a building or buildings comprising a unit or units and that as respects such units it is intended that amenities, facilities and services are to be shared </li></ul><ul><li>Establish a statutory framework to deal with the transfer of common areas to Owners Management Company (“OMC”) </li></ul>

31.
MUD Act 2010 – Main Provisions <ul><li>Requirement to establish an Owner Management Company (“OMC”) for all Multi-Unit Development (“MUD”) at the expense of the developer. </li></ul><ul><li>Strict conditions for the sale of units and obligation for developers to transfer ownership of common areas to OMC’s – The common areas must be transferred within 6 months of enactment of this Act </li></ul>

32.
MUD Act 2010 – Main Provisions <ul><li>New Regulations for Mixed Use Multi-Unit Developments </li></ul><ul><li>Automatic membership of the OMC </li></ul><ul><li>1 vote is attached to each residential unit </li></ul><ul><li>Requirement to hold annual meetings and prepare annual reports to members – The format of these annual reports are defined in the Act </li></ul>

33.
MUD Act 2010 – Main Provisions <ul><li>Establishment of a scheme of annual service charges & expenditure categories </li></ul><ul><li>Establishment of a sinking fund within 18 months of enactment of the Act </li></ul><ul><li>Making house rules </li></ul><ul><li>Dispute resolution, mediation & rehabilitation of multi-unit development </li></ul><ul><li>Restoration of struck off OMC’s to Register of Companies within 6 years of strike off </li></ul>

34.
Other Legislation <ul><li>Swift 3000 Code of Practice For Corporate Governance Assessment </li></ul><ul><li>- Corporate Governance Assessment for companies, organisations & state bodies </li></ul><ul><li>- Review of: i)Board composition; ii) Board processes and iii) Fulfilment of board responsibilities </li></ul><ul><li>- Approved assessors of companies </li></ul><ul><li>- Prospectus providing training for assessors </li></ul><ul><li>- document available on www.nsai.ie </li></ul>

35.
10 things to do in 2011 in your Company Secretarial Department

36.
10 Things To Do <ul><li>Electronically File All Returns – 40% still manually file & Use new PDF Accounts Facility </li></ul><ul><li>Strike Off companies that are dormant or non-trading – You can form for €249! </li></ul><ul><li>Group Structures – is money being loaned to connected companies </li></ul>

37.
10 Things To Do <ul><li>Non-Filing Accounts Structures – do your clients want to keep their accounts private </li></ul><ul><li>Shareholder Agreements – New Start Up’s & Trading Companies </li></ul><ul><li>Audit Exemption – have companies come under thresholds or de-construction groups as no longer needed. Do companies have to have an audit for bank, grants, public tendering </li></ul>

38.
10 Things To Do <ul><li>Company Restorations – Have companies been struck off in last 12 months, don’t risk going to High Court </li></ul><ul><li>Write to all clients reminding them of filing obligations despite difficult circumstances </li></ul><ul><li>Review all minutes & procedures – become efficient & compliant </li></ul><ul><li>Review all Annual Returns on CRO to make sure they are “Registered”. “Received” means issues </li></ul>

39.
Contact Details <ul><li>Conor Sweeney – csweeney@omnipro.ie </li></ul><ul><li>Amy Brennan – abrennan@omnipro.ie </li></ul><ul><li>[email_address] </li></ul><ul><li>059 9183888 </li></ul><ul><li>www.omnipro.ie </li></ul>

40.
OmniPro Services <ul><li>OmniPro Corporate Consultants </li></ul><ul><li>Company Formation Services </li></ul><ul><ul><ul><li>Standard Formations for €249.00 (incl VAT) </li></ul></ul></ul><ul><ul><ul><li>24 Hour Turn Around </li></ul></ul></ul><ul><ul><ul><li>Company Secretarial Services </li></ul></ul></ul><ul><ul><ul><li>Annual Compliance </li></ul></ul></ul><ul><ul><ul><li>All Company Secretarial Special Assignments </li></ul></ul></ul><ul><ul><ul><li>Company Secretarial Training </li></ul></ul></ul><ul><li>Next Door to the Companies Registration Office </li></ul>

41.
OmniPro Services <ul><li>OmniPro Practice Support </li></ul><ul><li>Strategic Planning & Implementation </li></ul><ul><ul><li>Practice Development </li></ul></ul><ul><ul><li>Practice Sale, Purchase & Merger </li></ul></ul><ul><ul><li>In House Training </li></ul></ul><ul><ul><li>File Review Services </li></ul></ul><ul><li>HWL OmniPro </li></ul><ul><ul><li>Product & Marketing Solutions to Build Business Advisory Fees </li></ul></ul><ul><ul><li>Practice Growth Solutions </li></ul></ul>

42.
OmniPro Services <ul><li>OmniPro Education & Training </li></ul><ul><ul><li>Professional CPD Seminars </li></ul></ul><ul><ul><ul><li>Technical CPD </li></ul></ul></ul><ul><ul><ul><li>Personal Development Training for Accountants </li></ul></ul></ul><ul><ul><ul><ul><li>Time management, business communication skills, Presentation skills, team leadership, management development </li></ul></ul></ul></ul><ul><ul><ul><li>In House Training </li></ul></ul></ul>

43.
OmniPro Contact Details <ul><li>Unit 3, South Court, Block D, </li></ul><ul><li>Wexford Road Iveagh Court, </li></ul><ul><li>Business Park, Harcourt Road </li></ul><ul><li>Carlow Dublin 2 </li></ul><ul><li>059 9183888 01 4110000 </li></ul><ul><li>[email_address] www.omnipro.ie </li></ul>