Security Bond

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Security Bond for Non-EU Company Directors

The Security Bond is required for companies which do not have at least one resident director from a EU member State.

 The requirement to have at least one resident director from a member State does not apply to any company which for the time being holds a bond, in the prescribed form, in force to the value of €25,000.

What is the Bond for?

The Bond provides that in the event of a failure by the company to pay the whole or part of -

  • a fine imposed on the company in respect of an offence under the Companies Act 2014 committed by it, being an offence which is prosecutable by the Registrar of Companies and
  • a fine imposed on the company in respect of an offence under section 1078 of the Taxes Consolidation Act 1997 and
  • a penalty 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 a sum of money for the purpose of same being applied in discharge of the whole or part of the company's liability in respect of any such fine or penalty.

Who can issue the Bond?

The surety under the bond must be a bank, building society, insurance company or credit institution.

How long is the Bond valid?

The bond must have a minimum period of validity of two years, commencing no earlier than the occurrence of the event giving rise to the requirement for the bond.

The UK will be in a transition period after leaving the European Union. This transition period is due to last until 31st December 2020. If thereafter there is no agreement in place, companies which have only UK resident directors will be required to comply with section 137 Companies Act 2014.  This is the requirement to have an EEA-resident director.

When to submit the Bond?

CRO requirements:

  •  The original bond, together with the certified counterpart copy of same, should be submitted to the CRO, with the Form A1.
  • Presenters are requested to clearly identify applications for  incorporation that are accompanied by bonds. 
  • The prescribed execution requirements (i.e. under the Common Seal of the Surety) must be adhered to.

With regard to new companies, the bond must be effective as at the date of incorporation of a company without a resident director.
The applicants can stipulate the commencement date of the bond. This is not required to correspond with the date on which the parties execute the bond, and so the parties have a degree of flexibility.

The effective date of the bond may not exceed four working days prior to the date of the company's incorporation, exclusive of incorporation date. The following effective dates will apply in practice:

  • *Fé Phrainn: the bond ought to take effect as and from the fifth working day after the date of receipt of Form A1 by the CRO.
  • *Online A1: the bond ought to take effect as and from the date of receipt of Form A1.
  • *Ordinary Scheme: the bond ought to take effect as and from the tenth working day after the date of receipt of Form A1.

In the event that an application for incorporation accompanied by a bond is returned by the CRO to the presenter for amendment, a new bond with an adjusted effective date in line with the above will be required, unless the revised application is resubmitted to the CRO within five working days.

Exemption for non-EU Company Directors

If, following incorporation, 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 will be exempted from the requirement to have at least one EEA resident director 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 made within two months of the date of the application by a statement that the Revenue Commissioners have reasonable grounds to believe that the company has a real and continuous link with one or more economic activities being carried on in the State

 

Need help with Company Registration?

If you require any help with a Company registration, please complete the form and order your company here:

Company Registration

€125

Included is:

  • Company Name check
  • Form A1
  • Company Constitution
  • CRO Fixed Fee €50
  • Company Certificate

You may also find useful:

  • Corporation Tax Return - from €120
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