By Sinead Floody, 9th Aug 2017
Unfortunately, this is a common enough question that we get asked by start-up companies. The implications of not filing on time are quite significant if accounts are also late as part of the annual return.
The First ‘6 Month’ Annual Return
If your company’s first annual return (due 6 months after the date of incorporation) is late i.e. not electronically filed within 28 days of the annual return date (ARD), your company will be incurring penalty fees which start at €100 and increase by €3 per day, starting on the ARD. Luckily, audit exemption is not lost as a result of late filing of the first annual return. The sooner this late return is filed, the lower the penalty fees will be. If you would like us to calculate your company’s penalty fees, please contact us on +353 1 6461625.
Subsequent Annual Returns with Accounts
If any of your company’s subsequent annual returns (which also require accounts to be filed) are filed late, the CRO will impose penalty fees. Fees start at €100 and increase by €3 per day, this will also result in a loss of the company’s audit exemption for two years, as per Section 350 of the Companies Act 2014. The Companies Registration Office are not flexible of late filings and the consequences are costly of both time and money.
Company Bureau has contacts with years of audit experience who can cater to a company’s audit needs. We can also assist with the filing of the annual return and pause the CRO penalty fees. When annual returns are late, the company needs to file the return, pay the late penalty fees, as well as prepare and file the audited financial statements within 28 days of the date that the annual return was electronically filed.
When the annual return falls due in the next calendar year, the company must file its annual return on time along with its second audited set of financial statements. If this return is filed on time, the company’s audit exemption will be reinstated, effective the next calendar year.
*If your company’s financial statements are not ready by the time the ARD comes around, an extension can be applied for within 28 days of the ARD. Such an extension can only be applied for once every 5 years.
It is important to note that a dormant/inactive/non-trading company is also required to file its annual return with financial statements each year. The rules are the same for dormant companies in that penalty fees are imposed as above, along with the loss of audit exemption for two years. The price for an audit for a dormant company is substantially lower than that of a trading company, however, this is still an expensive consequence of failing to file the annual return on time; particularly if the company is dormant and is not bringing in funds. For more information read How to Keep a Dormant Company Compliant.
Section 343 District Court Application
Company Bureau offers a service whereby an experienced Irish barrister will represent your company in the local district court if your company had extenuating circumstances which contributed to the fact the annual return was not filed on time. This provision of the District Court Application was introduced by the Companies Act 2014.
How do I avoid these problems going forward?
A way to avoid the costly burdens associated with the late filing of annual returns is to engage a company secretarial service provider to take care of your company’s ongoing compliance, such as Company Bureau. We will ensure you are reminded of your annual return and compliance requirements in a timely fashion each year and will monitor your company on our internal watchlist.
Please contact email@example.com or +353 1 6461625 for information on filing a late return, arranging an audit, making an application to the district court or engaging us for ongoing compliance and secretarial services.
Contact us now for further details