Companies (Amendment) Act, 1986
Acts of the Oireachtas
Source: Acts of the Oireachtas

num: 1
paragraphs: —(1) In this Act, except where the context otherwise requires—
“the Act of 1983” means the Companies (Amendment) Act, 1983;
“company” does not include an unlimited company;
“private company” does not include an unlimited company;
“public company” means a company other than a private company;
“the Principal Act” means the Companies Act, 1963 .
(2) In this Act, except where the context otherwise requires, a reference to a balance sheet or profit and loss account shall include a reference to any notes to or documents annexed to the accounts in question giving information which is required by any provision of the Companies Acts, 1963 to 1986, and required or allowed by any such provision to be given in a note to or a document annexed to a company's accounts.
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paragraphs: —(1) This Act does not apply to—
(a) a company not trading for the acquisition of gain by the members,
(b) a company to which subsection (4) (c) of section 128 of the Principal Act applies,
(c) a company in respect of which there is in force an order under subsection (5) of that section.
(2) Sections 3 to 6 , 8 to 12 , 17 to 19 , and 24 of this Act do not apply in relation to—
(a) a company that is the holder of a licence under the Central Bank Act, 1971 ,
(b) a company that is a trustee savings bank certified under the Trustee Savings Banks Acts, 1863 to 1965,
(c) a company engaged solely in the making of hire-purchase agreements (within the meaning of the Hire-Purchase Act, 1946 ) and credit-sale agreements (within the meaning of that Act), in respect of goods owned by the company,
(d) a company engaged in the business of accepting deposits or other repayable funds or granting credit for its own account,
(e) Agricultural Credit Corporation, public limited company,
(f) FÃ³ir Teoranta, or
(g) Industrial Credit Corporation Public Limited Company.
(3) Sections 3 to 12 , 17 to 19 and 24 of this Act do not apply in relation to a company that is the holder of an authorisation under the European Communities (Non-Life Insurance) Regulations, 1976 (S.I. No. 115 of 1976), or an authorisation under the European Communities (Life Assurance) Regulations, 1984 (S.I. No. 57 of 1984).
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paragraphs: —(1) Subject to subsection (2) of this section, every balance sheet and profit and loss account of a company laid before an annual general meeting of the company, pursuant to section 148 of the Principal Act, shall comply with the following requirements and section 149 (other than subsection (5) and, in so far as it relates to the said subsection (5), subsection (7)) of that Act shall not apply to any such balance sheet or profit and loss account:
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paragraphs: —(1) Subject to the provisions of this section, every balance sheet of a company shall show the items listed in either of the balance sheet formats set out in the Schedule to this Act and every profit and loss account of a company shall show the items listed in any one of the profit and loss accounts formats so set out in either case in the order and under the headings and sub-headings given in the format adopted.
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paragraphs: —Subject to section 6 of this Act, the amounts to be included in the accounts of a company in respect of the items shown shall be determined in accordance with the following principles:
(a) the company shall be presumed to be carrying on business as a going concern,
(b) accounting policies shall be applied consistently from one financial year to the next,
(c) the amount of any item in the accounts shall be determined on a prudent basis and in particular—
(i) only profits realised at the balance sheet date shall be included in the profit and loss account, and
(ii) all liabilities and losses which have arisen or are likely to arise in respect of the financial year to which the accounts relate, or a previous financial year, shall be taken into account, including those liabilities and losses which only become apparent between the balance sheet date and the date on which the accounts are signed in pursuance of section 156 of the Principal Act,
(d) all income and charges relating to the financial year to which the accounts relate shall be taken into account without regard to the date of receipt or payment, and
(e) in determining the aggregate amount of any item the amount of each individual asset or liability that falls to be taken into account shall be determined separately.
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paragraphs: —If it appears to the directors of a company that there are special reasons for departing from any of the principles specified in section 5 of this Act, they may so depart, but particulars of the departure, the reasons for it and its effect on the balance sheet and profit and loss account of the company shall be stated in a note to the accounts, for the financial year concerned, of the company.
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paragraphs: —(1) Subject to the provisions of this Act, there shall be annexed to the annual return—
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paragraphs: —(1) Subject to section 9 of this Act—
(a) a private company shall qualify to be treated as a small company for the purposes of this Act in respect of any financial year of the company if, in respect of that year and the financial year of the company immediately preceding that year, the company satisfies at least two of the conditions specified in subsection (2) of this section, and
(b) a private company shall qualify to be treated as a medium-sized company for the purposes of this Act in respect of any financial year of the company if, in respect of that year and the financial year of the company immediately preceding that year, the company satisfies at least two of the conditions specified in subsection (3) of this section.
(2) The qualifying conditions for a company to be treated as a small company in respect of any financial year are as follows:
(a) its balance sheet total for that year shall not exceed £1,250,000,
(b) the amount of its turnover for that year shall not exceed £2,500,000, and
(c) the average number of persons employed by the company in that year shall not exceed 50.
(3) The qualifying conditions for a company to be treated as a medium-sized company in respect of any financial year are as follows:
(a) its balance sheet total for that year shall not exceed £5,000,000,
(b) the amount of its turnover for that year shall not exceed £10,000,000, and
(c) the average number of persons employed by the company in that year shall not exceed 250.
(4) In this section “balance sheet total”, in relation to any financial year of a company, means—
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paragraphs: —(1) Where a private company has qualified to be treated as a small company under subsection 8 of section 8 of this Act, it shall continue to be so qualified, unless, in the latest financial year of the company and the financial year of the company immediately preceding that year, it does not satisfy at least two of the conditions set out in subsection (2) of the said section 8 and if, during each of those two years, it does not satisfy at least two of those conditions, it shall, in respect of its latest financial year, cease to be so qualified.
(2) Where a private company has qualified to be treated as a medium-sized company under subsection (1) of section 8 of this Act, it shall continue to be so qualified unless, in the latest financial year of the company and the financial year of the company immediately preceding that year, it does not satisfy at least two of the conditions set out in subsection (3) of the said section 8 for treatment as a medium-sized company and, if during each of those two years, it does not satisfy at least two of those conditions, it shall, in respect of its latest financial year, cease to be so qualified.
(3) A company which qualified to be treated as a medium-sized company under subsection (2) of this section in the financial year immediately preceding its latest financial year shall qualify to be treated as a small company for the purposes of this Act in respect of its latest financial year if, in those two years, it satisfies at least two of the conditions set out in section 8 (2) of this Act.
(4) Where a private company ceases to be qualified as specified in subsection (1) or (2) of this section, section 8 of this Act shall apply in respect of the company as if it had never previously qualified to be treated as a small company or a medium-sized company under that section.
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paragraphs: —(1) Notwithstanding paragraph (a) of section 3 (1) of this Act, but subject to paragraph (b) of the said section 3 (1), the directors of a company treated as a small company pursuant to section 8 (1) of this Act may draw up an abridged balance sheet showing only those items preceded by letters or roman numerals in Formats 1 and 2 of the balance sheet formats set out in the Schedule to this Act:
Provided that the total amounts falling due within one year and after one year shall be shown separately for item B.II in Format 1 and items B.II under “Assets” and C under “Liabilities” in Format 2 of the balance sheet formats in relation to debtors and creditors.
(2) A company treated as a small company pursuant to section 8 (1) of this Act may, in lieu of complying with the requirements in that behalf in section 7 of this Act, annex to the annual return in relation to the company referred to in that section a copy of the balance sheet of the company drawn up in accordance with subsection (1) of this section in respect of the period to which the return refers and, notwithstanding the said section 7 , the company shall not be required to annex to the return a copy of the profit and loss account of the company or the report of the directors accompanying the balance sheet of the company.
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paragraphs: —(1) Notwithstanding paragraph (a) of section 3 (1) of this Act, but subject to paragraph (b) of the said section 3 (1), the directors of a company treated as a medium-sized company under this Act may combine as one item in its profit and loss account under the heading “gross profit or loss” the following items that is to say:
num: 12
paragraphs: —(1) The provisions of the Schedule to this Act (other than paragraphs 24, 26, 27, 33, 34 and 44) in relation to the information required to be given by way of a note to the accounts of a company shall not apply to the accounts annexed to the annual return of a company treated as a small company pursuant to section 8 (1) of this Act.
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paragraphs: —The report of the directors of a company under section 158 of the Principal Act shall contain, in addition to the information specified in that section, the following information:
(a) a fair review of the development of the business of the company and of its subsidiaries, if any, during the financial year ending with the relevant balance sheet date;
(b) particulars of any important events affecting the company or any of its subsidiaries, if any, which have occurred since the end of that year;
(c) an indication of likely future developments in the business of the company and of its subsidiaries, if any, and
(d) an indication of the activities, if any, of the company and its subsidiaries, if any, in the field of research and development.
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paragraphs: —Where, in any financial year of a company, shares in the company—
(a) are acquired by the company by forfeiture or surrender in lieu of forfeiture, or
(b) are acquired by the company in pursuance of section 41 of the Act of 1983, or
(c) are acquired by another person in the circumstances specified in paragraph (c) or (d) of section 43 (1) of that Act, or
(d) are made subject to a lien or other charge that is taken (whether expressly or otherwise) by the company and is permitted by paragraph (a), (c) or (d) of section 44 (2) of that Act,
the directors' report with respect to that financial year of the company shall state—
(i) the number and nominal value of any shares of the company acquired as aforesaid by the company, the number and nominal value of any shares of the company acquired as aforesaid by another person, and the number and nominal value of any shares charged as aforesaid, respectively,
(ii) the maximum number and nominal value of any shares which, having been acquired as aforesaid (whether or not during that year) by the company or by another person or charged as aforesaid (whether or not during that year) are held at any time by the company or that other person during that year,
(iii) the number and nominal value of any shares acquired as aforesaid (whether or not during that year) by the company or another person or charged as aforesaid (whether or not during that year) which are disposed of by the company or that other person or cancelled by the company during that year,
(iv) where the number and nominal value of the shares of any particular description are stated in pursuance of any of the preceding paragraphs, the percentage of the called-up share capital of the company which shares of that description represent,
(v) in the case of a charge as aforesaid, the amount of the charge in each case, and
(vi) in the case of a disposal as aforesaid for money or money's worth, the amount or value of the consideration in each case.
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paragraphs: —It shall be the duty of the auditors of a company, in preparing the report in relation to the company required by section 163 of the Principal Act, to consider whether the information given in the report of the directors of the company relating to the financial year concerned is consistent with the accounts prepared by the company for that year and they shall state in the report whether, in their opinion, such information is consistent with those accounts.
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paragraphs: —(1) Subject to the provisions of this section, where at the end of the financial year of a company, the company—
(a) has a subsidiary, or
(b) is beneficially entitled to more than 20 per cent. in nominal value of the shares carrying voting rights (other than voting rights which arise only in specified circumstances) in another body corporate that is not its subsidiary (in this section referred to as “an associated company”) or to more than 20 per cent. in nominal value of the allotted share capital of another body corporate that is not its subsidiary (in this section also referred to as “an associated company”),
a note shall be included in the accounts of the company for that year annexed to the annual return distinguishing between the subsidiaries and the associated companies and giving the following information in relation to them—
(i) the name and registered office of each subsidiary or associated company and the nature of the business carried on by it,
(ii) the identity of each class of shares held by the company in each subsidiary or associated company and the proportion of the nominal value of the allotted shares in the subsidiary or associated company of each such class represented by the shares of that class held by the company,
(iii) the aggregate amount of the capital and reserves of each subsidiary or associated company as at the end of the financial year of the subsidiary or associated company ending with or last before the end of the financial year of the company to which the accounts relate, and
(iv) the profit or loss of the subsidiary or associated company for the financial year thereof mentioned in paragraph (iii) of this subsection.
(2) Paragraphs (iii) and (iv) of subsection (1) of this section shall not apply—
(a) in respect of a subsidiary of a company, if the company is exempt from preparing group accounts by virtue of section 150 (2) (a) of the Principal Act or the company prepares group accounts and either—
(i) the accounts of the subsidiary are included in the group account, or
(ii) the investment of the company in the shares of the subsidiary is included in or in a note to the company's accounts by way of the equity method of valuation,
or
(b) in respect of an associated company of a company if the investment of the company in the shares of the associated company is included in or in a note to the company's accounts by way of the equity method of valuation,
or
(c) if—
(i) the subsidiary or the associated company is not required to publish its accounts, and
(ii) the shares held by the company in the subsidiary or the associated company do not amount to at least one-half in nominal value of the allotted share capital of the subsidiary or the associated company,
or
(d) if the information specified in subsection (1) of this section is not material.
(3) (a) Subject to paragraph (b) of this subsection, the information specified in subsection (1) of this section may, in lieu of Being stated in a note to the accounts of the company concerned for any particular financial year of the company, be given in a statement in writing signed by a director, and the secretary, of the company and annexed to the first annual return made by the company next after its accounts for that year are laid before the annual general meeting of the company if, in the opinion of the directors of the company, compliance with subsection (1) of this section would require a note to the accounts of the company of excessive length.
(b) Paragraph (a) of this subsection shall not apply in relation to information concerning a subsidiary or associated company of a company (referred to subsequently in this paragraph as the “second-mentioned company”) if the financial state of the subsidiary or associated company, as disclosed by its accounts, has, in the opinion of the directors of the second-mentioned company, a substantial effect on the profit or loss, or the amount of the assets, of the second-mentioned company and its subsidiaries.
(c) A copy of a statement annexed, pursuant to paragraph (a) of this subsection, to the annual return referred to in that subsection made by a company shall be certified both by a director, and the secretary, of the company to be a true copy of such statement.
(4) For the purpose of this section, shares in a company being a subsidiary or associated company of another company, shall be treated as being held, or as not being held, by that other company if they would, by virtue of section 155 (3) of the Principal Act be treated as being held or, as the case may be, as not being held by that the company for the purpose of determining whether the first-mentioned company is that other company's subsidiary.
(5) Subsections (4) and (5) of section 158 of the Principal Act shall not apply to a company to which this section applies.
(6) In addition to applying to a company, this section applies to a body corporate which, if it were a company, would be a subsidiary or an associated company.
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paragraphs: —(1) Where a private company is a subsidiary of another body corporate formed and registered in a Member State of the European Communities, or would be a subsidiary of that other body corporate if that other body corporate were a company, the company shall, as respects any particular financial year of the company, stand exempted from the provisions of section 7 (other than subsection (1) (b)) of this Act if, but only if, the following conditions are fulfilled:
(a) every person who is a shareholder of the company on the date of the holding of the next annual general meeting of the company after the end of that financial year, shall declare his consent to the exemption,
(b) there is in force in respect of the whole of that financial year an irrevocable guarantee by the other body corporate of the liabilities of the company referred to in section 5 (c) of this Act in respect of that financial year and the company has notified in writing every person referred to in paragraph (a) of this subsection of the guarantee,
(c) the annual accounts of the company for that financial year are consolidated in the group accounts prepared by the body corporate and the exemption of the company under this section is disclosed in a note to the group accounts,
(d) a notice stating that the company has availed of the exemption under this section in respect of that financial year and a copy of the guarantee and notification referred to in paragraph (b) of this subsection, together with a declaration by the company in writing that paragraph (a) of this subsection has been complied with in relation to the exemption, is annexed to the annual return for that financial year made by the company under the Principal Act to the registrar of companies,
(e) the group accounts of the other body corporate are drawn up as far as possible in accordance with the requirements of the Fourth Council Directive* , and
(f) the group accounts of the other body corporate are annexed to the annual return aforesaid and are audited in accordance with Article 51.1 of the said Fourth Council Directive.
(2) The Minster may make such orders (if any) as may be necessary for the purpose of enabling this section to have full effect.
Council Directive No. 78/660/EEC (OJ No. L 222 of 14.8.1978).
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paragraphs: —(1) A copy of a balance sheet and profit and loss account of a company prepared pursuant to any of the provisions of sections 10 to 12 of this Act and annexed to the annual return required by the Principal Act to be made by the company to the registrar of companies shall be signed as required by section 156 of the Principal Act and the copy of the balance sheet so annexed shall contain the statement required by subsection (2) of this section in a position immediately above the signatures appended pursuant to the said section 156 and shall be accompanied by a copy of the report of the auditors of the company in relation to the accounts of the company under subsection (3) of this section.
(2) A copy of a balance sheet of a company prepared pursuant to any of the provisions of sections 10 to 12 of this Act and annexed to the said annual return shall contain a statement by the directors that—
(a) they have relied on specified exemptions contained in the said sections 10 to 12 , and
(b) they have done so on the ground that the company is entitled to the benefit of those exemptions as a small company or (as the case may be) as a medium-sized company.
(3) A copy of a balance sheet or profit and loss account of a company prepared pursuant to any of the provisions of sections 10 to 12 of this Act which is delivered to the registrar of companies need not be accompanied by the report of the auditors under section 7 (1) (a) of this Act on those accounts, but shall be accompanied by a special report of the auditors containing—
(a) a copy of the report made by the auditors of the company under subsection (4) of this section on those accounts, and
(b) a copy of the report of the auditors under section 163 of the Principal Act.
(4) Where the directors of a company propose to annex to the annual return accounts for any accounting period prepared pursuant to any of the provisions of sections 10 to 12 of this Act and the auditors of the company are satisfied that the directors of the company are entitled, for that purpose, to rely on exemptions specified in sections 10 to 12 of this Act and that the accounts have been properly prepared pursuant to those provisions, it shall be the duty of the auditors of the company to provide the directors of the company with a report in writing stating that, in the opinion of the auditors of the company, the directors of the company are entitled to annex those accounts to the annual return and that the accounts so annexed are properly prepared as aforesaid.
(5) A copy of the report of the auditors of a company under subsection (3) of this section furnished to the registrar of companies pursuant to this section shall be certified both by a director, and the secretary, of the company to be a true copy of such report.
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paragraphs: —(1) Where a company publishes its full accounts, it shall also publish with those accounts any report in relation to those accounts specified in subsection (3) of section 18 of this Act and, if the auditors of the company have refused to provide the directors of the company with a report under subsection (4) of that section, an indication of the refusal.
(2) Where a company publishes abbreviated accounts relating to any financial year, it shall also publish a statement indicating—
(a) that the accounts are not the accounts copies of which are required by this Act to be annexed to the annual return,
(b) whether the copies of the accounts so required to be so annexed have in fact been so annexed,
(c) whether the auditors of the company have made a report under section 163 of the Principal Act in respect of the accounts of the company which relate to any financial year with which the abbreviated accounts purport to deal,
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paragraphs: —The Act of 1983 is hereby amended by the insertion of the following section after section 45:
“Development costs shown as an asset of a company to be set off against company's distributable profits.
45A.—(1) Subject to the following provisions of this section, where development costs are shown as an asset in a company's accounts, any amount shown in respect of those costs shall be treated—
(a) for the purposes of section 45, as a realised loss, and
(b) for the purposes of section 47, as a realised revenue loss.
(2) Subsection (1) shall not apply to any part of the amount aforesaid representing an unrealised profit made on revaluation of those costs.
(3) Subsection (1) shall not apply if—
(a) there are special circumstances justifying the directors of the company concerned in deciding that the amount mentioned in respect thereof in the company's accounts shall not be treated as required by that subsection, and
num: 21
paragraphs: —Section 377 of, and the Ninth Schedule to, the Principal Act shall have effect as if the references in the second column of that Schedule, opposite the references in the first column thereof to accounts and audit, to specified provisions of the Act of 1963 were, in the case of such of those provisions as are amended by this Act, references to those provisions as so amended.
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paragraphs: —(1) (a) If a company fails to comply with a provision of section 5 , 6 , 7 , 10 , 11 , 16 , 18 or 19 of this Act, the company and every officer of the company who is in default shall be liable on summary conviction to a fine not exceeding £1,000.
(b) Proceedings for an offence under this subsection, in relation to sections 7 , 10 , 11 , 16 or 18 of this Act, may be brought and prosecuted by the registrar of companies.
(2) If any person, being a director of a company, fails to take all reasonable steps to secure compliance with the requirements of section 3 or section 4 (other than subsections (3) and (13)) of this Act or to comply with the provisions of subsections (3) or (13) of section 4 or section 13 or 14 of this Act, he shall in respect of each offence be liable on summary conviction to imprisonment for a term not exceeding 6 months, or, at the discretion of the court to a fine not exceeding £1,000 or to both so, however, that—
(a) in any proceedings against a person in respect of an offence under this subsection, it shall be a defence to prove that he had reasonable grounds to believe and did believe that a competent and reliable person was charged with the duty of ensuring that the provisions of the said section 3 or section 4 (other than subsections (3) and (13)), as may be appropriate, were complied with and that the latter person was in a position to discharge that duty, and
(b) a person shall not be liable to be sentenced to imprisonment for such an offence unless, in the opinion of the court, the offence was committed wilfully.
(3) If any person in any return, report, certificate, balance sheet or other documents required by or for the purposes of any of the provisions of this Act wilfully makes a statement false in any material particular, knowing it to be false, he shall be liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding 3 years or a fine not exceeding £2,500 or both, or
(b) on summary conviction, to imprisonment for a term not exceeding 6 months or a fine not exceeding £1,000 or both.
(4) Section 385 of the Principal Act shall have effect as if for the sum mentioned in subsection (1) there were substituted “£1,000”.
(5) In this section “director” and “officer” includes any person in accordance with whose directions or instructions the directors of the company are accustomed to act.
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paragraphs: —Section 222 of the Principal Act shall not apply to proceedings before the Employment Appeals Tribunal.
num: 24
paragraphs: —(1) The Minister may by order alter or add to the provisions of this Act, in so far as it relates to the balance sheet and profit and loss account of a company and the notes to and documents to be attached to such a balance sheet or profit and loss account, either generally or in relation to a specified class or classes of company.
(2) An order under this section shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the order is passed by either such House within the next twenty-one days on which that House has sat after the order is laid before it, the order shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.
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paragraphs: —(1) This Act may be cited as the Companies (Amendment) Act, 1986.
(2) The Companies Acts, 1963 to 1982, the Companies (Amendment) Act, 1983 , section 6 of the Designated Investment Funds Act, 1985 , and this Act may be cited together as the Companies Acts, 1963 to 1986.
(3) The Companies Acts, 1963 to 1982, the Companies (Amendment) Act, 1983 , section 6 of the Designated Investment Funds Act, 1985 , and this Act shall be construed together as one.
(4) Save as is otherwise specifically provided thereby, this Act shall come into operation on such day or days as, by order or orders made by the Minister under this section, may be fixed therefor either generally or with reference to any particular purpose or provision and different days may be so fixed for different purposes and different provisions.
(5) (a) Subject to paragraph (b) of the subsection, each provision of this Act shall apply as respects the accounts of a company, and the report by the directors of a company specified in section 158 of the Principal Act, for each financial year of the company beginning or ending, as may be specified by the Minister by order, after such date after the commencement of the provision as may be specified by the Minister by order.
(b) Paragraph (a) of this subsection does not apply in relation to subsection (7) or (8) of section 8 of this Act.