New law in place to cut red tape
Business organisations have given a broad welcome to a new legislative Act that comes into force tomorrow, saying it will reduce unnecessary red tape and bureaucracy for small business.
The Companies (Accounting) Act 2017 introduces a new category of company — a micro company — with the Government claiming it will greatly reduce the financial reporting obligations on very small companies.
The Act increases the thresholds for the small company category so that more companies will qualify as small in the future, thus becoming eligible for cost-saving provisions such as the audit exemption.
Irish Small and Medium Enterprise Association chief executive Neil McDonnell said the Act “lightened the burden” on SMEs.
He said it is long overdue “as most companies in Ireland were in that microspace”, adding that more needs to be done to assist the SME sector in the future.
Chambers Ireland, which represents chambers of commerce in the Republic of Ireland, said the Act would be majorly beneficial to businesses that would now be reclassified.
Chief executive Ian Talbot said: “It is good news for small and micro business, potentially leading to a reduction in costs. Reduced financial reporting obligations will have a positive impact on many smaller businesses through elimination of administrative burdens, particularly for micro enterprises.”
Mr Talbot urged caution to businesses, saying they had to reflect carefully before availing of the audit exemption in the Act to ensure information and quality assurance required by key stakeholders such as directors, shareholders, and bankers is retained.
The Act applies to financial years beginning after January 1, 2017.
However, companies that wish to apply the provisions of the Act to earlier financial years may be able to use section 14, which allows application to financial years that began after January 1, 2015.
Jobs Minister Mary Mitchell O’Connor said: “I believe that this new Act will be seen as good regulation that strikes the right balance between proportionate disclosure obligations on the one hand, and the need for meaningful transparency on the other.
“Above all, the vast majority of Irish companies should see real benefits and savings in time, effort, and cost.”