Ireland: How to Triumph in Director Appointments

Director changes are a pivotal part of corporate governance in Ireland. Whether appointing a new director, removing an existing one, or addressing residency and eligibility requirements, Irish companies must adhere to the Companies Act 2014. Ensuring compliance with these legal obligations helps avoid penalties and supports smooth transitions in leadership.

What Are the Legal Requirements for Directors in Ireland?

All companies must meet specific legal requirements for appointing and retaining directors.

• Minimum Number of Directors: Every company must have at least one director. For a Private Limited by Shares (LTD), a single director is permitted, provided there is a separate company secretary.

• Residency Requirement: At least one director must reside within the European Economic Area (EEA). If this is not feasible, the company must secure a €25,000 bond or a certificate confirming a real and continuous link to Ireland.

• Eligibility: Directors must be:

  • Over 18 years of age.
  • Not an undischarged bankrupt.
  • Compliant with the limit of 25 directorships.

For non-EEA directors, compliance with visa and residency requirements is crucial if they plan to reside in Ireland.

What Is the Process for Appointing a New Director?

The appointment of a new director involves several legal and procedural steps:

• Board Resolutions: Prepare resolutions to formalize the decision.
• Consent: Obtain the written consent of the incoming director.
• Form B10: File this form with the Companies Registration Office (CRO) within 14 days to record the change.
• VIF Form: For directors without an Irish tax or RBO number, complete this form to obtain a unique reference number.

Failure to comply with these steps can result in fines and delays.

What Should Be Considered During the Removal or Resignation of a Director?

Removing or accepting the resignation of a director requires adherence to strict legal guidelines:

• Ordinary Resolution: Removal requires an ordinary resolution passed at a general meeting, with 28 days’ notice to the director. The director has the right to respond and attend the meeting.
• Filing Obligations: Submit Form B10 to the CRO after the removal or resignation.
• Handover: Outgoing directors must return company property, provide a comprehensive handover, and comply with their duties up to the effective resignation date.

How Does a Director Change Impact the UBO Register in Ireland?

If a new director qualifies as an Ultimate Beneficial Owner (UBO), the company must update the UBO Register. This involves:

• Submitting the UBO’s name, nationality, date of birth, and nature of their interest.
• Filing updates promptly to ensure compliance.

Non-compliance with UBO regulations can lead to fines of up to €500,000.

What Are the Penalties for Non-Compliance in Ireland?

Failing to comply with legal requirements can result in significant penalties:

• Late Filing Fees: Imposed for missing the 14-day deadline for notifying the CRO.
• Legal Consequences: Prolonged non-compliance can lead to fines or legal action against the company and its officers.

What Are the Ongoing Responsibilities of Directors?

Directors in Ireland have fiduciary duties, including:

• Acting in the best interest of the company.
• Avoiding conflicts of interest.
• Exercising care, skill, and diligence in their role.
• Ensuring statutory compliance, maintaining accurate records, and overseeing financial reporting.

By following these legal and procedural steps, Irish companies can effectively manage director changes while maintaining compliance with the Companies Act 2014.

Conclusion

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