Compliance Statements
Under the Companies Act 2014, directors of certain larger companies are required to provide a compliance statement confirming their efforts to ensure adherence to key obligations under company and tax law. This obligation applies to public limited companies (excluding investment companies) and large private companies with a balance sheet total exceeding €12.5 million and annual turnover over €2.5 million, though these limits can be adjusted by Ministerial order. Certain companies, including Section 110 investment holding companies, may be exempt if other regulations adequately address compliance.
Directors must confirm within the directors’ report that they’ve established policies to ensure compliance with critical legal and tax obligations. This includes confirming the preparation of a compliance policy, the establishment of internal structures for managing compliance, and that these structures were reviewed within the financial year. If any of these steps have not been completed, directors must provide an explanation.
The Act allows directors to rely on advice from qualified external or internal professionals to meet compliance goals. These structures are considered effective if they provide reasonable assurance that the company complies materially with its legal and tax obligations, as outlined in the compliance statement requirements.
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