The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 has seen a significant development with the official activation of its highly anticipated Section 22. This commencement was confirmed by Peter Burke, the Minister for Enterprise, Tourism, and Employment.
This updated regulatory framework supersedes Section 363 of the Companies Act 2014, which previously dictated that a company would lose its audit exemption upon its first failure to submit an annual return. The revised stipulations now provide that:
- If a company classified as “small” fails to submit its annual return and has also missed a filing in any of the preceding five financial years, it will be ineligible for an audit exemption for the subsequent two years.
- For companies that had already lost their audit exemption, their very first annual return or any prior filing failure predating the commencement of this new provision will not be counted as a “previous failure” under the new rules.
These changes are largely anticipated to bring considerable relief to small and micro businesses by easing pressures on their owners. While the new section became effective yesterday, more detailed guidance on its practical implementation and enforcement is expected to follow with the commencement order.
