European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024
Minister for Enterprise, Trade and Employment, Peter Burke TD, has signed into law the European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024 which increases the balance sheet and turnover thresholds for ‘micro’, ‘small’, ‘medium’ and ‘large’ companies in the Companies Act 2014 by 25 per cent.
This change in size will mean that more companies will move into the micro and small categories and will thus benefit through abridged reporting requirements and the audit exemption.
The regulations will take effect from 1 July 2024 and the new thresholds will apply for financial years commencing 1 January 2024, with companies also having the option to apply them from 1 January 2023.
The increased size criteria are as follows;
- micro company –a balance sheet total of not greater than €450,000, a net turnover of not greater than €900,000 and no more than 10 average employees.
- small company – a balance sheet total of not greater than €7.5 million, a net turnover of not greater than €15 million and no more than 50 average employees.
- medium sized company – a balance sheet total of not greater than €25 million, a net turnover of not greater than €50 million and no more than 250 average employees.
- large company –continues to be defined as a company that does not qualify as micro, small or medium (ie. balance sheet total of greater than €25 million, net turnover of greater than €50 million and more than 250 average employees).
Group size thresholds have also increased as follows;
- small group- group balance sheet total of no greater than €7.5 million net (or €9 million gross), group turnover no greater than €15 million net (or €18 million gross) and no more than 50 average employees of the group.
- medium group- group balance sheet total of no greater than €25 million net (or €30 million gross), group turnover no greater than €50 million net (or €60 million gross) and no more than 250 average employees of the group.
Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024
The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 has been initiated in Dáil Eireann. The policy objective of this Bill is to enhance and amend the legislative framework provided by the Companies Act 2014 in the areas of governance, administration, insolvency, enforcement, and supervision.
It will do this by, among other things, making permanent the provisions giving companies and industrial and provident societies the option to hold fully virtual general meetings; amending the audit exemption regime for small and micro companies to remove automatic loss of exemption and by facilitating improved operational efficiencies and enhancing the powers of the CRO, IAASA and the CEA. It also addresses recommendations of the CLRG in respect of enhanced transparency and accountability in receiverships, corporate governance, and administration around mergers in certain circumstances and certain technical and procedural matters relating to public limited companies. It also includes various technical and procedural amendments to improve the operation of the Small Companies Administrative Rescue Process (SCARP).
The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 provides the legislative basis to:
- enable companies to avail of a more modern and flexible way of doing business – holding fully virtual general meetings
- assist small and micro companies by removing the automatic loss of the audit exemption in respect of their first instance of late filing with the CRO and replace it with a graduated regime – saving time and money for thousands of Irish companies
- ensure the Corporate Enforcement Authority (CEA), the Irish Auditing and Accounting Supervisory Authority (IAASA) and the Companies Registration Office (CRO) who have important roles in respect of company oversight, supervision, regulation, protection, and enforcement have the appropriate legislative tools to effectively undertake their statutory functions