Director appointment terms review in Ireland

A director appointment terms review in Ireland turns on one threshold question the Companies Act 2014 puts to every board: is at least one director resident in the European Economic Area, and if not, has a bond or a Revenue certificate been put in its place. The residency test applies to the board as constituted at any given moment, not to where the group's operations actually sit. 01 The gap does not surface until a filing falls due, by which point the appointment that created it is already on the public register.

A UK parent appoints its finance director to the board of its Irish subsidiary, alongside two Irish-resident directors. Within a year the two local directors resign for unrelated reasons, leaving the board with only the UK appointee. Nobody revisits the residency question at that point, because nobody re-reads appointment terms once they are signed. The company only discovers the gap when the annual return falls due and no bond is in place.

This page sets out the test Ireland adds to a director appointment terms review, the filing and register consequence that follows from the answer, and where the advisory boundary sits when a group asks for help with either.

What changes in a director appointment terms review in Ireland

The generic version of this review asks whether an appointee has capacity, whether the constitution restricts the office, and whether the board resolution appointing them is properly minuted. Ireland layers a fourth question on top of that, one with no equivalent in most common-law jurisdictions used for a cross-border structure: whether the board, taken as a whole, satisfies the EEA-residence test in section 137 of the Companies Act 2014, and if not, whether the alternative – a bond or a section 140 certificate confirming a real and continuous economic link with the State – is in place before the appointment takes effect. 01 Ireland is one of the jurisdictions in this plan where the requirement genuinely exists; it is not universal, and a board moving directors between jurisdictions cannot assume it travels with them.

Where the company's constitutional documents restrict who can hold the office of director – a clause common in joint-venture structures – the appointment terms have to be checked against that restriction before the residency test is even reached. A director appointed in breach of the constitution is not validly appointed at all, regardless of where that person lives.

The general position under Ireland company law also treats board composition as a live fact, not a one-off filing. A private company limited by shares needs at least one director, and where the board has only that one person, they cannot also hold the office of company secretary. 02 A review that only checks the appointment as signed, and not the board's composition six months later, misses the point at which the residency test is actually applied.

The test that drives director appointment terms review in Ireland

The residency test is not a nationality test and not a tax-residence test. It asks where each director is ordinarily resident, aggregates that answer across the whole board, and asks whether at least one seat clears the EEA bar. A board with a Dutch director and a Delaware-resident director, and no one resident in the EEA, fails the test just as completely as a board with no foreign directors at all.

Beyond residency, the appointment terms themselves need checking on their own account: the length of the term, whether removal is at the company's will or for cause only, what indemnity the company gives the director, and whether that person has been checked against the disqualification list that applies to every Irish company. None of that turns on where the director lives; all of it turns on what the appointment document actually says, as opposed to what a template assumed it would say.

Where the test fails, the fix is not to appoint a director for the sake of the register. The two lawful routes are a bond under section 137, renewed on a fixed cycle, or a certificate under section 140 confirming a real and continuous economic link with the State. Neither route substitutes for the board resolution recording who was appointed, on what terms, and from what date 01 – that resolution is the primary record a liquidator or the Companies Registration Office will ask for first.

A director who signs the annual return confirming the residency position, without having checked it against the board as it actually stands that day, accepts personal liability for the consequence of that confirmation the moment the return is filed. That liability attaches to the individual signing, not to the company, and it cannot be undone by appointing an EEA-resident replacement the following week.

Where a residency-driven resignation escalates into a dispute among shareholders over how the departing director's stake should be valued, the buy-out valuation mechanics page for Ireland sets out the separate test that applies once a departure and a buy-out are on the table together.

Filing, register and forum consequences in Ireland

A change of director in Ireland is notified to the Companies Registration Office on Form B10, and the fact of the appointment – not just its terms – becomes visible on the public register once the filing is processed. The CRO holds no confidentiality regime for director appointments; the name, appointment date and nationality of every director appear against the company's file. 03

Since the introduction of identity verification for company filings, a director's PPS Number, or a Verified Identity Number issued by the CRO where the director has no PPS Number, must accompany the B10. A filing submitted without a matching identifier is rejected, and the appointment it records is not effective on the register until it is resubmitted and accepted. 04 The director who certifies that B10 as accurate carries personal liability for the certification once it is filed, and closes off the option of treating the appointment as provisional while the residency question is still being checked.

For a group that structured its Irish subsidiary in part to keep a particular individual off other public registers, this filing does the opposite of what was intended: the person's nationality and other directorships become cross-referenced automatically once the CRO processes the entry, adding to the group's regulatory exposure rather than reducing it. The register does not distinguish between an operating director and one appointed only to satisfy the residency test.

For a group weighing whether Ireland's residency test is better managed by restructuring the board or by the bond route, the comparison of jurisdictions with no residency requirement at all sets out where the same appointment would face no equivalent test.

A group that has just discovered its Irish board no longer clears the residency test is not looking for a general commentary on section 137. It needs the current appointment terms checked against the board as it stands today, and a clear statement of which of the two lawful routes closes the gap before the next filing.

Review your appointment terms. Write to info@hreithlaw.com with the jurisdiction and the structure.

What this service does not include in Ireland

The review does not include acting as a director, secretary or nominee shareholder for the Irish company, and it does not include sourcing, supplying or arranging any of those roles from a third party. Ireland requires a trust or corporate service provider authorisation for that activity, and this firm holds no such authorisation in any jurisdiction. The boundary is a licensing question, not a matter of preference: arranging for a resident director to be appointed is regulated activity in its own right, and advising on whether a board meets the test is not the same thing as filling the seat.

• What the review maps: the residency position of the board as it currently stands, against section 137 and section 140.
• What it produces: a memorandum setting out which route – bond or certificate – fits the group's structure, and a marked-up set of the appointment terms and constitutional documents that need to change.
• What it checks: the board resolution appointing each director, and whether it records the confirmations the CRO filing will later rely on.
• What it does not produce: a director, a secretary, or an introduction to one.

For a group running the same review across more than one board, the Luxembourg version of this page shows how the same four questions land differently where the local test is a substance test rather than a residency test, and the step-by-step note on running the review sets out the sequence a general counsel can follow before engaging anyone at all.

A board that has restructured to add an EEA-resident director still needs the appointment terms themselves checked – capacity, term, indemnity, and what happens if that director resigns within the bond's renewal cycle. That is a different exercise from the residency test itself, and skipping it leaves the fix as fragile as the gap it replaced.

Review your appointment terms. Write to info@hreithlaw.com with the jurisdiction and the structure.

Frequently asked questions

How often should a director appointment terms review in Ireland be repeated?

The residency test is applied against the board as constituted at the time of each filing, not just at the point of appointment. A review timed to run before the annual return, and again whenever a director resigns, catches a gap before it reaches the public record rather than after, when the only options left are corrective ones.

Does director appointment terms review in Ireland change for a foreign-owned company?

The test itself does not distinguish between Irish-owned and foreign-owned companies. What changes is the practical starting point: a foreign-owned board is more likely to have no EEA-resident director at all, which makes the bond or section 140 route the live question from day one rather than a contingency to plan around later.

What does director appointment terms review in Ireland require in practice?

It requires the residency position of every current director confirmed against section 137, the board resolution appointing each of them checked for what it actually records, and a decision on the bond or certificate route if the board fails the test. None of that requires a new appointment to be made before the position is known.

Who inside the company is responsible for director appointment terms review in Ireland?

Responsibility sits with the board collectively, but the director who signs the annual return carries the personal exposure if the confirmation on it turns out to be wrong. Company secretarial staff can prepare the analysis; they cannot carry the liability that attaches to signing it.

What evidence should the board keep on director appointment terms review in Ireland?

A dated record of each director's country of ordinary residence, the board resolution appointing them, and, where the bond or certificate route applies, the current bond schedule or the section 140 certificate itself. A register entry without the underlying record behind it is an assertion, not evidence.

Sofia Berglund, expert author. Sofia advises on board composition and director appointment terms across common-law and civil-law jurisdictions, with particular attention to where residency and substance tests intersect with a cross-border structure. She works from the constitution outward, testing each appointment against what the constitutional documents actually permit before testing it against statute.