Exclusions, Exemptions and Special Arrangements with regard to public disclosure of financial information.

Under the Act, the threshold for what constitutes a small company remains the same as it was previously however the threshold for medium sized companies has increased thereby enabling additional companies to avail of the reduced disclosure and filing obligations. In addition, the definition of what can qualify as a small or medium company has been expanded under the Act. A small or medium company, for the purposes of the Companies Act 2014 now includes:

  • A private limited company (i.e. a ‘LTD’ or a ‘DAC’);
  • A company limited by guarantee (‘CLG’);
  • A private designated unlimited company (‘ULC’)

Small and medium companies

The thresholds for a company to qualify as small or medium under the Act are as follows:

Must meet 2 of 3 Small-sized company Medium-sized company*
Turnover (proportionately adjust if not 12 months) €8,800,000 €20,000,000
Balance sheet total (fixed + current assets) €4,400,000 €10,000,000
Average no. of employees 50 250

*Previously the thresholds were €15.2m with respect to turnover and €7.6m with respect to the balance sheet total.

Small and medium sized companies, who satisfy the necessary conditions as laid out above, will be permitted to file abridged financial statements with the Registrar. As was previously the case, a company must satisfy the relevant criteria in the financial year in question plus in the preceding financial year. Where a company fails to meet the criteria for 2 consecutive periods, then it will no longer retain its status as a small or medium company.

Companies that cannot be classified as small or medium

The Act specifically disallows certain companies from being classified as ‘small’ or ‘medium’ regardless of size (Section 350(11)). These are:

  • A holding company that prepares group financial statements; and
  • A company within any provision of Schedule 5 (details of these companies are included in Appendix 4)

As well as those noted above, there are certain companies that are specifically prohibited from being classified as small or medium companies. A ‘traded company’, which is defined in Section 1372 of the Act, cannot file abridged financial statements (Section 1378). A ‘traded company’ is any public company (i.e a plc or public unlimited company). It also includes a DAC or CLG that has debentures admitted to trading on a regulated market in an EEA state.

Disclosure and other exemptions for small and medium companies

There are certain disclosure and other exemptions available to companies that qualify as small or medium. These are as follows (excluding exemptions available in the directors’ report for these types of companies which are outlined separately at Remuneration for Auditor):

  • Section 326(3) – companies that are small or medium do not have to give the information required by Section 326(3) in its directors report concerning the use of financial instruments during the period;
  • Section 327(3) – companies that are small or medium do not have to give the information required by section 327(3) concerning an analysis of key performance indicators during the period;
  • Section 322(5) – companies that are small or medium, or certain subsidiaries, do not need to disclose details of remuneration for audit, audit-related and non-audit work (refer to details at >insert link to previous point).

 

Furthermore, there are filing exemptions available to small and medium companies in that they are permitted to file abridged financial statements which enable less information to be made publicly available. Details are set out at insert link to next section and the one after).

CA 2014 summary of changes – public disclosure of information:

• Thresholds for what constitutes a ‘medium’ sized company have been expanded
• A company limited by guarantee can now qualify as ‘small’ company and therefore can prepare abridged financial statements