By Sinead Floody, 9th Aug 2017 (Updated 12th May 2022)
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 late annual return. If your return is late, you can use our free Annual Return Late Fee Calculator to determine the amount that is due to the Companies Registration Office.
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 56 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 – Updated October 2018
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 the next two financial years, Section 363 Companies Act 2014 as amended by section 10 Companies (Statutory Audits) Act 2018. The Companies Registration Office is not flexible of late filings and the consequences are costly in both time and money. In this case, the company must file its annual return, pay the late penalty fees and submit their accounts as normal.
When the annual return falls due the following year, the company must file its annual return on time along with it a set of audited financial statements. The same process is required the following year after that. So long as both returns have been filed on time, and the company is under the audit exemption threshold, audit exemption will be reinstated when the time comes to file the next annual return.
The threshold for audit exemption is:
- Balance sheet total does not exceed €6m
- Turnover does not exceed €12m
- Number of employees does not exceed 50
Public Companies cannot claim audit exemption.
It is important to be aware that if your company’s financial statements are not ready by the time the ARD comes around, an extension can be applied for within 56 days of the ARD. Such an extension can only be applied once every 5 years. Please ask us if you wish to arrange this.
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. 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 firstname.lastname@example.org 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.
Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.