In Ireland, the most common annual return date is 30 September which applies to most companies which have a financial year end of 31 December. All annual returns must be electronically filed and the deadline for doing so is 28 days after the annual return date.
All Irish companies are obliged to file an annual return with the CRO. The company’s first annual return will be due 6 months from the date of incorporation and there is no requirement to file financial statements. The annual return date in subsequent years will fall on the anniversary of the first annual return date unless the date is extended or shortened. In all cases, the annual return date cannot be more than 9 months after the financial year end of the company.
Consequences Of Late Filing Of The Annual Return
Failure to file the annual return results in an immediate penalty of €100 which will increase by €3 per day thereafter up to a maximum penalty of €1,200 for each late annual return. If the Company was required to submit Financial Statements with its return and was in a position to avail of the audit exemption, then non compliance will result in the loss of a company’s ability to avail of the audit exemption for two years.
Applying To The Court For An Extension
A District Court Application under S.343 of the Companies Act 2014 may be available to companies that require an extension of the deadline to file their annual return. However, in making an Order to extend the time for the filing of the annual return, the Court will need to be satisfied that it is just to do so. Given this, an application to the District Court is not an option for every case.
Pursuant to section 874 of the Companies Act 2014, the CRO has the authority to issue a fine to the company and/or the officers of the company for persistent late filing and poor compliance. Fines of up to €5,000 can also be imposed on a conviction for breach of statutory filing obligations as a category 3 offence.
Involuntary Strike Off
The CRO may strike-off the Company for failure to adhere to statutory filing deadlines. If a company becomes struck off, the assets will become vested in the Minister for Public Expenditure. Should the company continue to trade whilst dissolved, the owners will become personally liable for debts and liabilities incurred.
Upon an application from the Director of Corporate Enforcement, the High Court may deem it appropriate to disqualify the company directors from acting as director or managing any other companies. The Court may also order the directors to pay for the legal costs of by the Office of the Director of Corporate Enforcement in making the application and their costs suffered for the investigation.
Avoiding penalties and prosecution should not be the only incentive for maintaining good corporate compliance. Good compliance of a company can offer various opportunities. For example, adhering to regulatory compliance conveys transparency and good corporate health which may subsequently encourage favourable terms when securing agreements with suppliers, banks and other financial institutions. In addition, analysis of financial accounts through the preparation of financial statements may help identify indications of poor performance and mismanagement of company capital. This can encourage measures to be taken in an effort to improve the performance and overall financial health of the company in a cost effective manner.
Further Compliance Obligations With The CRO
The filing of the annual return and financial statements are not the only CRO compliance obligations which a company should be concerned about. Companies are required to file statutory forms for a variety of reasons including an amendment of the Constitution, the passing of a Special or Ordinary Resolution, and the change in an officer of a Company. Statutory forms are to be filed in a timely manner and each form has a specific timeline for delivery associated with same.
It is important for a company to be aware of all its compliance obligations and to seek professional assistance from a Company Secretarial provider where required.