Companies (Amendment) (No. 2) Act, 1999

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Company to have director resident in the State.

43.—(1) Subject to subsection (3) and section 44 , one, at least, of the directors for the time being of a company, not being a company referred to in subsection (2), shall, on and from the commencement of this section, be a person who is resident in the State.

(2) Subject to subsection (3) and section 44 , one, at least, of the directors for the time being of a company, being—

(a) a company the memorandum of which was delivered to the registrar of companies for registration under section 17 of the Principal Act before the commencement of this section, or

(b) an existing company (within the meaning of the Principal Act),

shall, on and from the date that is 12 months after the commencement of this section, be a person who is resident in the State.

(3) Subsection (1) or (2), as the case may be, shall not apply in relation to a company if the company for the time being holds a bond, in the prescribed form, in force to the value of £20,000 and which provides that, in the event of a failure by the company to pay the whole or part of—

(a) a fine, if any, imposed on the company in respect of an offence under the Companies Acts, 1963 to 1999, committed by it, being an offence which is prosecutable by the registrar of companies, and

(b) (i) a fine, if any, imposed on the company in respect of an offence under section 1078 of the Taxes Consolidation Act, 1997 , committed by it, being an offence that consists of a failure by the company to deliver a statement which it is required to deliver under section 882 of that Act or to comply with a notice served on it under section 884 of that Act, and

(ii) a penalty, if any, which it has been held liable to pay under section 1071 or 1073 of the Taxes Consolidation Act, 1997 ,

there shall become payable under the bond to a person nominated for the purpose (“the nominated person”) by the registrar of companies or the Revenue Commissioners, as appropriate, (or jointly by the registrar and the Commissioners in the case of both a fine referred to in paragraph (a) and a fine or penalty, or a fine and penalty, referred to in paragraph (b)), a sum of money for the purposes of that sum being applied by the nominated person in discharging the whole or part, as the case may be, of the company's liability in respect of any such fine or penalty, and any sum that becomes so payable shall be applied by the nominated person accordingly.

(4) The bond referred to in subsection (3) may be entered into and shall have effect according to its terms notwithstanding any rule of law whereby any agreement to insure or indemnify a person in respect of any punishment or liability imposed on him or her in relation to any offence or unlawful act committed by him or her is void or unenforceable.

(5) The bond referred to in subsection (3) shall also provide that, in addition to the sum referred to in that subsection, there shall become payable under the bond to the nominated person, on demand being made, with the consent of the Revenue Commissioners, by him or her in that behalf, a sum of money, not exceeding such sum as the Revenue Commissioners and the Minister may sanction, for the purpose of defraying such expenses as may have been reasonably incurred by that person in carrying out his or her duties under subsection (3).

(6) The nominated person shall keep all proper and usual accounts, including an income and expenditure account and a balance sheet, of all moneys received by him or her on foot of the bond referred to in subsection (3) and of all disbursements made by him or her from any such moneys.

(7) The Minister, after consultation with the Minister for Finance, the Revenue Commissioners and any other person whom, in the opinion of the Minister, might be concerned with or interested in the matter, may prescribe—

(a) that arrangements in relation to the bond referred to in subsection (3) shall only be entered into with persons of a prescribed class or classes,

(b) the form of that bond and the minimum period to be specified in the bond as being the period for which it shall be valid.

(8) A copy of the bond referred to in subsection (3) held by a company shall be appended—

(a) in case none of the directors of the company is resident in the State on its incorporation, to the statement required by section 3 of the Companies (Amendment) Act, 1982 , to be delivered to the registrar of companies in relation to the company,

(b) in case a notification is made under subsection (9) to the registrar of companies in relation to the company, to that notification,

(c) in case during the period to which an annual return concerning the company relates none of the directors of the company is resident in the State, to that annual return (unless such a copy has been appended to a notification under subsection (9) made to the registrar of companies in that period).

(9) Without prejudice to anything in section 195 (as amended by this Act) of the Principal Act, if a person ceases to be a director of a company and, at the time of that cessation—

(a) he or she is resident in the State, and

(b) to his or her knowledge, no other director of the company is resident in the State,

that person shall, within 14 days after that cessation, notify, in writing, the registrar of companies of that cessation and the matter referred to in paragraph (b).

(10) A notification in writing to the registrar of companies of the matter referred to in subsection (9)(b) shall not, of itself, be regarded as constituting defamatory matter.

(11) If a person fails to comply with subsection (9), he or she shall be jointly and severally liable with the company of which he or she has ceased to be a director for any fine or penalty referred to in subsection (3) imposed on the company or which it is held liable to pay after that cessation, and any such fine or penalty for which that person is so liable may be recovered by the registrar of companies or the Revenue Commissioners, as appropriate, from him or her as a simple contract debt in any court of competent jurisdiction.

(12) Any provision of a company's articles shall be void in so far as it has the effect of prohibiting a person who is resident in the State from being a director of the company.

(13) If subsection (1) or, as the case may be, subsection (2) is not complied with, the company concerned and every officer of the company who is in default shall be guilty of an offence.

(14) Summary proceedings in relation to an offence under subsection (13) may be brought and prosecuted by the registrar of companies.

(15) The provisions of section 311 of the Principal Act shall apply for the purposes of this section as they apply for the purposes of that section 311, subject to the following modifications—

(a) for subsections (1) and (2) thereof (inserted by the Companies (Amendment) Act, 1982 ) there shall be substituted the following subsections:

(1) Where the registrar of companies has reasonable cause to believe that subsection (1) or, as the case may be, subsection (2) of section 43 of the Companies (Amendment) (No. 2) Act, 1999, is not being complied with in relation to a company, he may send to the company by post a registered letter requesting the company to furnish to him evidence that the provision concerned is being complied with and stating that, if that request is not complied with within 1 month from the date of that letter, a notice will be published in Iris Oifigiúil with a view to striking the name of the company off the register.

(2) If the registrar does not, within 1 month after sending the letter, receive evidence from the company that satisfies him that subsection (1) or, as the case may be, subsection (2) of section 43 of the Companies (Amendment) (No. 2) Act, 1999, is being complied with in relation to the company, he may publish in Iris Oifigiúil and send to the company by registered post a notice that, at the expiration of 1 month from the date of that notice, the name of the company mentioned therein will, unless cause is shown to the contrary, be struck off the register, and the company will be dissolved.”.

and

(b) in subsection (8), there shall be substituted for “if satisfied that the company was at the time of the striking off carrying on business”, “if satisfied that subsection (1) or, as the case may be, subsection (2) of section 43 of the Companies (Amendment) (No. 2) Act, 1999, was at the time of the striking off being complied with in relation to the company”.