Six Things a Company Director Should Know

Introduction

In accordance with the Companies Acts 1963-2006, companies are required to file documents with the CRO. This information leaflet summarises the six things that every company director should know in respect of filing these documents. Any forms (and associated filing fees) and information leaflets referred to here may be downloaded from www.cro.ie

1 Every company, whether trading or not, must file an annual return each year at the CRO not later than 28 days from its statutory annual return date (ARD). The ARD of every company can be checked free of charge on the CRO website at www.cro.ie/search

A company director must ensure that an annual return on behalf of the company is delivered to the CRO at least once in every calendar year.1 The annual return (Form B1) is a document setting out certain prescribed information in respect of the company. This document has to be filed with the CRO annually, regardless of whether or not the company is trading.

A company's annual return is required to be made up to a date every year which is no later than the company's ARD and to be filed with the CRO within 28 days of the date to which it has been made up. A new company's ARD is the date that is six months from its date of incorporation. The first annual return is required to be made up to that ARD.

Although not statutorily required to do so, the CRO has a policy of sending an ARD reminder to each company at its registered office in advance of the company's ARD every year. Where accounts are required to be attached to the annual return (see 2. below), the return filing deadline is either:

• the company's ARD plus 28 days or
• the company's financial year-end plus nine months and 28 days, whichever is the earlier.

2 In almost every case, accounts must be attached to that return; the financial year end of those accounts must be no earlier than nine months before the date of the return. To comply with that requirement, it might be necessary to change your company's ARD. Changing an ARD is possible only if the statutory provisions are followed in full, see www.cro.ie

A checklist on Form B1 lists all the documents which are required by law to be attached to the annual return of a limited company.2 Generally speaking, these documents are:

• a copy of the balance sheet*;
• a copy of the profit and loss account*;
• a copy of the directors' report; and
• a copy of the auditor's report.

The accounts marked * are required by law to be audited3 and to cover the period:

• in the case of the first annual return to which accounts are annexed, since the incorporation of the company, and
• in any other case, since the end of the period covered by the accounts annexed to the preceding
annual return filed with the CRO, and must be made up to a date not earlier by more than nine months than the date to which the annual return is made up.

3 Where returns are not filed on time, a substantial late filing penalty must be paid and further enforcement actions may be pursued by the CRO.

Returns which are filed late (i.e. more than 28 days after the effective date of the return) with the CRO incur a substantial late filing penalty, in addition to the standard filing fee of €20 (electronic)/€40 (paper) per return. The late filing penalty is €100 with effect from the expiry of the company's filing deadline, with a daily penalty of €3 accruing thereafter, up to a maximum of €1,200 per return.

The following enforcement options are open to the CRO in respect of non-filing of annual returns:

(a) Prosecution
The CRO prosecutes companies and their directors for failure to file annual returns on time. Companies and directors may receive a conviction in respect of each year that annual returns are outstanding. On conviction in the District Court, the penalty can be up to €1,900 for each offence. A director with three such convictions may be disqualified from acting as a director or having any involvement in the management of any company.

(b) Court injunction
Where a notice calling upon a director to comply with a statutory provision under the Companies Acts has been served on him/her and 14 days have elapsed since the date of service, but the breach of the provision continues, application may be made to the High Court by the Registrar of Companies or the Director of Corporate Enforcement ("the Director") for an order directing compliance by a defaulting director with the statutory provision in question within such period as the court may specify. An order for legal costs of this court application may be made against the director(s) concerned. This procedure is laid down in section 371 Companies Act 1963.

(c) Strike off
Any company which does not file its annual return in respect of any one year is liable to be struck off the register and dissolved. On dissolution, any assets will vest in the Minister for Finance by operation of law, and the protection of limited liability is lost from the date of strike off. In addition, application may be made to the High Court by the Director for an order pursuant to section 160 Companies Act 1990, as amended, disqualifying the company's directors from acting as director or having any involvement in the management of any company, together with an Order for the legal costs incurred by the Director in bringing such an application and the costs incurred by him in investigating the matter.

Enforcement measures employed by CRO have regard to a company's annual return filing compliance history in recent years. Filing an annual return late affects a company's compliance history and could result in it being selected by this Office for enforcement measures in future years.

A late return also disqualifies the company from claiming the audit exemption in respect of the accounts attached to the current year's return as well as the following year's annual return, even if the company meets all other qualifying criteria for the audit exemption in respect of the financial years covered by the accounts attached to both returns.

4 Reminders and other important notices are sent to companies at their registered office as notified to the CRO. If the address is wrong you may not become aware of important information regarding your company. The registered office of every company can be checked at www.cro.ie/search

Every company is obliged to have a registered office within the State, which cannot be a P.O. Box number.

Form B2 is used to notify the CRO of a change in a company's registered office, and must be delivered to the CRO within 14 days of any such change. Form B2 may be filed free of charge electronically - see 5. below.

It is most important that the details of a company's registered office are kept up-to-date with CRO, and that the company's post be collected regularly from that address. All official communications with the company are issued to the company at its registered office. This includes strike off notices and annual return reminders. Any change of registered office should therefore be notified to the CRO without delay following the change.

Please note that if a company has in fact changed its registered office, but has not notified the CRO of the change, any document left or sent by post to the address currently recorded by the CRO as the company's registered office is deemed by law to have been left at or sent by post to the registered office of the company, notwithstanding that the situation of its registered office may have changed.

5 Certain forms - in particular a change of address and change of director or secretary - may be filed free of charge at www.core.ie

Online notification of changes to registered particulars is free, secure and quick. It is more reliable and more efficient than using paper and can cut down on administration. The facility provides for the completion of forms online, the results to be printed, signed and submitted to us. The status of electronically filed forms can also be checked at any time.

6 It is the responsibility of each director to ensure that his or her company is not in breach of the Companies Acts.

The Companies Acts expressly state that it is the duty of each director and secretary of a company to ensure that the company complies with the requirements of the Companies Acts.

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