Every company, whether trading or not, is obliged to file an Annual Return (Form B1) with the Companies Registration Office (CRO) at least once in every calendar year.
A new company’s ARD is the date six months after the date of incorporation. Then each company’s ARD is 12 months from its previous year’s ARD.
An Annual Return must be received by the CRO not later than 28 days after a company’s ARD. If the 28 day filing deadline falls on a Saturday, Sunday or public holiday, the 28 day period is extended to the next working day.
The Companies Registration Office is actively pursuing companies who fail to submit their Annual Returns within the time limits. Failing to file an Annual Return on time can result in late filing penalties, prosecution of the company and/or its directors, the loss of audit exemption and the possible involuntary strike off and dissolution of the company.
Late filing penalty
The late filing penalty for an Annual Return starts at €100 with an additional daily penalty of €3. This applies up to a maximum penalty of €1,200. This penalty is in addition to the standard filing fee of €40 per Annual Return. Late filing penalties are not tax deductible.
Prosecution
On top of this, an on-the-spot fine can be imposed by the CRO where the company has a record of persistent late filing. And they can also opt for a summary prosecution of the company and/or any officer in default. Fines of up to €1,904.61 can be imposed on a conviction for breach of the Annual Return filing requirements.
Strike off
A company can be struck off the Register of Companies and dissolved for failure to file an Annual Return.
This brings some considerable problems to the company.
If a company is struck off, the assets of the company become vested in the Minister for Finance. And if the business continues to trade, the owners will no longer enjoy the benefit of limited liability. Which means they are personally responsible for any debts incurred while the company remains dissolved.
Any person, who was a director of a company at the date the company was sent a strike off notice because of non-filing of Annual Returns, may be disqualified from acting as a director by the High Court if the company is struck off leaving outstanding liabilities. Such an order may be made by the High Court on the application of the Office of the Director of Corporate Enforcement.
If a company is struck off, an ‘application for restoration’ can be made by the company. There is a form available for this purpose, but it can only be used within the first twelve months from publication of the strike off notice. A fee of €300 must be paid when sending the application to the Companies Office along with all late filing fees.
Failing to act within the twelve month period means that the company would need to petition the High Court, which is a long and costly procedure.
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Please call Noel Murphy today on 021 431 0266 if you need further information on Companies Office Annual Return penalties.