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Let us help you find a solution.
Whether you require assistance with applying for a Section 43 bond, or if you have any general questions about Irish company formation, Coddan can help. In all situations, we aim to provide the most cost-effective and comprehensive services. Take a look at the other services we offer: |
You can request your Irish company via our online order form. Company formation is usually completed within 5-10 business days, allotting for approximately 7 additional business days for a Section 43 bond. It only takes minutes to enter your details and to submit a registration form. We provide a wide range of quality and reliable company formation services and administrative support not only to Irish nationals, but also to international clients located anywhere in the world. Why not get started today?
Irish company formation: Click here
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Corporate benefits in Republic of Ireland:
A company formation in the Republic of Ireland has advantages for everyone. In fact, new companies are created in Ireland more than any other legal jurisdiction within the islands of Ireland and Britain, apart from England. The reason for this partly stems from the recent economic "boom", and the introduction of a 12.5% corporate tax. Another reason is that it is a separate sovereign state, unlike both Scotland and Wales. The principal governing legislation for all Republic of Ireland companies can be found in the Companies Acts', 1963 to 2001, which although similar to the legislation employed in Northern Ireland and the United Kingdom, nevertheless, is considered to be more restrictive.
One of the major restrictions to mention is the requirements for of all Irish-based companies to have at least one company director, who is permanently resident in the Republic of Ireland. A “resident” is considered to be someone who is present in Ireland for at least 183 days out of one year.
Since April 2001, it has been necessary for Irish companies to have an Irish resident director residing in the State, prior to a company being incorporated. However, in lieu of the appointment of a resident director, another option is possible. Company owners may apply for a Non-resident Directors Insurance Bond. The Section 43 (3) of the Companies (Amendment) (No.2) Act 1999 makes it possible to have the alternative of obtaining a special bond. The issuance of a bond ensures that the company will complete all appropriate and mandatory filings at the Companies Registration Office (CRO) and with the tax authorities. Then, if the company fails to carry out its statutory filings at the Companies Office or at the tax authorities, then the Insurance Company is entitled to pursue the company and/or its directors for their losses, and the bond issuers will be contacted, in order to pay outstanding fees, fines, taxes up to a maximum of €25,000. Coddan is able to support you throughout the bond application process for a one-time fee of £1325.
What is the background to the Bond?
Initially, Sections 42 to 45 were introduced to stop the use of Irish Non-Resident Companies. Many companies once achieved tax free status in Ireland by trading and being controlled and managed outside Ireland; however, this proved to be detrimental to the economy of the Republic of Ireland, as those companies did not conduct any activity within the State, making their economic contribution little or none.
Which fees does the Bond cover?
The Bond exempts companies registered in the Republic of Ireland from the requirement to have a Director who is resident in the State. If the company were to fold and owe any fines, the Bond will be used to pay:
 Any fine imposed on the Company in respect of offences under the Companies Acts 1963 to 1999 e.g. failure to file Annual Returns and Audited Accounts on time.
A fine for failure to supply certain information to the Revenue Commissioners - mainly information required on the Form CRO 11F.
Any penalty which the company has been held liable to pay under S1071 or S1073 of the Taxes Consolidation Act 1997.
Any expenses incurred in recovering the fines and penalties mentioned above.
As long as Irish companies have continuously maintained the possession of a bond, they are exempt from any fines that may arise in the case that a bond may expire, and a company may not be covered. The bond must also have a minimum period of validity of two years, commencing no earlier than the formation of the company, or any event that causes the company to not have the presence of a resident director, such as the retirement of a company’s resident director. The surety under the bond must be a member of a class specified in Schedule 2 to the Companies (Amendment) (No.2) Act 1999 Bonding Order 2000, and this refers to a bank, building society, insurance company or credit institution. Also, it should be noted that for new companies, the bond must be effective as at the date of incorporation, but may not exceed four working days prior to the date of the company’s incorporation, exclusive of incorporation date.
Bond preparation:
The CRO specifies that the issued bonds must be prepared and presented clearly, in a way that draws attention to the bond that is to be submitted with other Irish incorporation documents, while adhering to all execution requirements of the bond. Also, the original bond, together with a certified copy of same, should be submitted to the CRO, with the Form A1, prior to incorporation of a new company. It should be noted that paragraph 5 of the bond enables the parties to stipulate the commencement date of the bond. This is not required to correspond with the date on which the parties execute the bond, so the parties have a certain degree of flexibility.
A company applies for and is granted a certificate from the registrar of companies that the company has a real and continuous link with one or more economic activities that are in carried on in the State, that company may be exempted from the requirement to have at least one resident director, starting from the date of the certificate, as long as the certificate remains in force. Application for this certificate is made on Form B67, and must be accompanied by a statement from the Revenue Commissioners and made within two months of the date of the application via a statement provided by the Revenue Commissioners, claiming that there is reasonable proof.
Coddan aims to provide you with the tools you need to move forward with your Irish company formation. Whether you want to form a new company, ask us about our assistance with non-resident directors bonds, or request further general information, contact us today.
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