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In Short: Directors' Compliance Statement Reminder

Directors of companies that are obliged to produce a directors’ compliance statement under section 225 of the Companies Act 2014 (the “Act”) should bear in mind the requirements of that section when approaching financial year end. 

Specifically, section 225(3)(c) requires that a review be carried out, during the company’s financial year, of the arrangements or structures that the company has in place to secure material compliance with its main or “relevant obligations” as defined in the Act. Relevant obligations are tax laws and provisions of the Act the breach of which are category 1 or 2 offences. These are the most serious offences under the Act. Serious market abuse, transparency and prospectus provisions are also relevant obligations. 

The directors are obliged to confirm in their directors’ compliance statement that such a review has been carried out. If the confirmation cannot be given, the directors must disclose this in the Directors Report and give reasons as to why not.

Contributed by Aoife Kavanagh

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