Today 1,100 companies that are nominally Irish but that have no trading or taxation links here are being struck off the Register of Companies.
The former Irish-registered non-resident (IRNR) companies are the first to be struck off following a lengthy process involving the Revenue Commissioners and the Companies Registration Office (CRO). The process was put in place because of concerns that such companies were giving the Republic a bad image internationally.
The names of the 1,100 companies being removed will be published next week in Iris Oifigiuil and posted on the Internet. They constitute the first batch of such companies being removed and it is expected that future batches will be processed more quickly, leading to a quick removal from the register of such companies.
Following an unsuccessful attempt in the mid-1990s to close down the use of Irish companies by international interests with no trading links here, the Minister for Finance, Mr McCreevy, introduced a measure in the Finance Act 1999 which stipulated that all companies registered with the CRO were also registered here for tax purposes.
Although some exemptions were included in the Act, the overall thrust of the measure was to make the IRNR structure no longer available. Following the change, the Revenue wrote to 38,996 Irish-registered companies asking if they were carrying on trade in the State and, if not, where they were conducting their business. The bulk of the letters met with no response or with the letter being returned marked "addressee unknown". More than 25,000 companies fell within this category and were listed by the Revenue as suitable for strike-off.
Other companies were found to have been struck off already. The number that replied to the Revenue's request for information was quite low. The figure changes due to late replies being received, but it is believed to be about 6,000.
Mr Paul Farrell, the Registrar of Companies, warns that too much can be read into being included in the strike off list. "Some may be involved in nefarious activities, but most are companies which never got started."
The CRO has its own screening process to ensure the companies on its register comply with changes introduced in the Companies Act 1999. The new measures stipulate that each company must have at least one director who is resident here, and that no person can hold more than 25 directorships, except in cases of related companies.
As companies are now obliged to make annual returns each year or face being struck off, the companies that do not comply with the new requirements are being weeded out.
