Readers will be aware that the Investment Funds, Companies and Miscellaneous Provisions Act 2006 was signed into law on 24 December and a number of the provisions came into effect on 24 December 2006 and 29 January 2007.

The Act has the effect of changing the citation of the Companies Acts to '1963 to 2006' and so all memoranda and articles of association filed with the Companies Office should be cited accordingly.

The Act has increased the threshold amounts applicable for companies wishing to avail of the audit exemption. Companies must have a turnover of no more than €7,300,000 and a balance sheet total of no more than €3,650,000. This is a substantial increase on the previous thresholds, which were €1,500,000 and €1,904,607 respectively and bring Ireland into line with the maximum EU limits. Members holding at least 10% of the total voting rights in a company have the option of formally notifying the company that they require an audit. The Act provides that written notice may be given by a member or members at any time during the prior financial year or at least one month before the end of the financial year to which the notice relates. The revised criteria apply to financial years beginning on or after 24 December 2006 and not earlier than 24 February 2007. It is important to note, however, that the other qualifying criteria for the audit exemption have not changed. The increase in turnover and balance sheet thresholds should result in more Irish companies availing of the audit exemption.

The Act also introduced new measures regarding the swearing of a statutory declaration for the purposes of the Companies Acts. A statutory declaration made in a place outside the State shall be regarded as having been validly made if it is sworn before (a) a solicitor entitled to practise in Ireland or (b) a person authorised to administer oaths in that place. Furthermore, where a statutory declaration is made in a place that is a party to the Hague Convention or the EC Convention, the provisions of that convention in relation to authentication shall also apply.

The definition of a private company has been amended (effective from 1 July 2005) to include an increase in the limit in the number of members a private company can have to 99. A private company, by its articles of association, prohibits any invitation or offer to the public to subscribe for shares or debentures in the company. Furthermore, any officer shall be guilty of an offence if the company offers or allots shares or debentures in the company to the public. A number of exceptions to this section apply, such as:

• an offer of debentures or allotment to a qualified investor
  
  
• an offer of debentures to fewer than 100 persons
  
  
• an offer of debentures where the minimum consideration payable is at least €50,000 for each separate offer
  
  
• an offer of debentures whose denomination per unit amounts to at least €50,000
  
  
• an offer of debentures which limits the amount of the total consideration for the offer to less than €100,000
  
  
• an offer of those classes of instruments which are normally dealt in on the money market having a maturity of less than 12 months, or
  
  
• an offer of shares to (i) qualified investors, or (ii) 99 or fewer persons or (iii) both qualified investors and 99 or fewer other persons.

In addition to the changes in the Act, amendments have been introduced by the European Communities (Companies) (Amendment) Regulations 2007 with regard to disclosure of company information on websites and electronic communications. With effect from 1 April 2007, all Irish registered limited liability companies are required to have the following information on all websites, electronic order forms and emails:

• name of the company and its legal form
  
  
• place of registration of the company, the company number and its registered office
  
  
• in the case of a company exempt from the obligation to use the word 'limited' or 'teoranta', the fact that it is a limited company
  
  
• in the case of a company being wound up, the fact that it is so
  
  
• if there is a reference to share capital of the company, the reference should be to paid-up share capital.

Where a company has a website, it must display this information in a prominent and easily accessible place on the site. Companies should ensure that they are compliant with the new disclosure requirements by 1 April of this year.

Spring 2007.

For further information please contact Alan Browning.