Section 22 of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 has been commenced by the minister for enterprise, tourism and employment, Peter Burke.

It replaces section 363 of the Companies Act 2024, which provided that a company loses its audit exemption on the first occasion of its failure to deliver an annual return.

The updated regime provides that a company that qualifies as a small company will not be entitled to an audit exemption for the following two years where it fails to deliver its annual return and has previously failed to file an annual return in any of the previous five financial years.

It further provides that a company’s first annual return or previous failure to file an annual return before the commencement of the provision — as the company has already lost its audit exemption — shall not be considered a previous failure.

Mr Burke said: “I am pleased to sign the commencement order, putting in place an amended audit exemption regime for those small and micro-sized companies that are late filing annual returns with the CRO.

“For the minority of small businesses that do not file on time, the loss of audit exemption can have a disproportionate impact due to the significant costs associated with providing two years of audited financial statements.

“This new regime will ease the burden on small companies, reducing paperwork and regulatory obligations on our SME sector while bearing in mind the importance of timely filing of annual returns with the CRO.”

Niamh Smyth, minister of state for trade promotion, AI and digital transformation, added: “Timely filing of annual returns is a key aspect of company law and access to company information is important for a whole range of stakeholders.

“It is important to emphasise that companies will still be subject to late filing fees if annual returns are not filed on time with the CRO.

“I would encourage all companies and their advisors to ensure that they are in a position to file in accordance with statutory filing deadlines.”