In recent times, the landscape of corporate compliance has undergone significant changes, particularly in the light of the Companies Registration Office (CRO) stepping up its efforts. The CRO is poised to take stern action against companies that haven’t diligently filed their annual returns and financial statements. Their primary focus at this juncture is on companies with the longest outstanding annual return filing.
It’s important to note that the COVID pandemic granted businesses a temporary reprieve. No company was struck off due to late or missing annual return filings in 2021 and 2022. But now, the pendulum has swung the other way. Companies that haven’t complied with their annual returns are already starting to receive cautionary letters from the CRO. These letters warn companies that companies have a 10-week window to rectify their compliance status.
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Annual Return Compliance Rules
An annual return is a mandatory document that companies are required to file with the CRO every year. This document encapsulates a snapshot of certain company information on its return date. The frequency of filing is once a year, without exceptions. The annual return includes details like:
- Details of directors and secretary;
- Shareholders and their shareholdings;
- Company’s financial statements.
An important point to remember for newly incorporated companies is the submission of their first annual return. This needs to be done six months post-incorporation and is popularly known as the ‘zero annual return’.
What are the Penalties for Late or Missed Annual Return Submission
Mention the consequences of late annual return filing:
The consequences of not adhering to the stipulated annual return deadlines can be severe. These include:
Court Prosecution: Non-compliant companies and their directors can find themselves facing legal actions. Each offense related to a late or missed filing could attract penalties of up to €5,000.
High Court Intervention: In cases where the magnitude of non-compliance is exceptionally grave, the CRO might escalate the matter by involving the High Court.
Striking Off: Persistent issues related to filing could result in the CRO deciding to de-list your company from the register.
Director Disqualification: Should a company get struck off, the directors of such a company could potentially face disqualification proceedings. These proceedings would be initiated by the Corporate Enforcement Authority in the High Court.
Next Steps for Successful Annual Return Filing
Upon receiving the 10-week notice, companies must swing into action promptly. There’s a possible recourse if a company anticipates delays beyond this window and wishes to sidestep the late filing penalties. They can formally apply to the District Court seeking an extension. However, this step should be taken well before the 10-week notice period reaches its culmination.
Need assistance with your annual return? Chern & Co are adept at preparing and filing annual returns with precision and punctuality. Let us guide you through this process and ensure your compliance. Click here to get started with Chern & Co today.
To sum up, companies should regard annual return filing as a non-negotiable task. With the CRO intensifying its efforts against non-compliance, it’s more critical than ever for businesses to stay ahead of their filing obligations.