If you have recently set up a limited company, you have probably received a letter from the Comanies Registration Office ("CRO") notifying you of your requirement to file your first Annual Return. So what is this, what does it involve and why do you need to do it?
Annual Return - The basic facts
An Annual Return is a form which must be submitted to the CRO each year. It contains all the main company information such as its registered office, its directors and shareholders. The very first Annual Return is due 6 months after the date that the company was first incorporated and the second and each subsequent Annual Return is then filed on the 12 month anniversary of the first Annual Return. A set of company accounts must also be submitted with the second and each subsequent Annual Return.
Annual Return - The important facts!
An Annual Return must be delivered to the CRO no later than 28 days after the company's allocated annual return date. Failure to do so can result in some very serious circumstances.
Firstly there are automatic fines payable for the late filing of a return. There are almost no circumstances in which these late filing fees can be waivered. The fees are €100 and then an additional €3 per each day that the return is late, subject to a maximum total fine of €1,200. Addition fines can also become payable if the company is prosecuted for persistent late filling of annual returns.
In addition when your annual return is late you are required to submit an audit report with your accounts. This applies not just to the current year which you are late in filing, but also to the following year's accounts even if you are filing next year's annual return on time. Submitting an audit report with your accounts means enlisting the services of a registered auditor to conduct an audit of your accounts, which can be an expensive extra service to have to pay for when it was not needed.
If you leave your annual return very late to file, you will eventually find your company on the strike-off list and if you still fail to send in your annual return at this stage, your company will be struck off the company register.
What does it mean if my company is struck off?
There are a number of consequences will result from strike off. The assets of the company become vested in the Minister for Finance and if the company continues trading, the owners no longer benefit from limited liability and are therefore personally responsible for any debts incurred by the company.
The company directors may also be disqualified from acting as directors by an order of the High Court. This can affect other company interests that the director may have or indeed, future business plans.
How do I know if my Annual Returns are up to date?
If you are not sure whether your annual returns are up to date, you can check very quickly at the CRO website www.cro.ie using the "Search/Purchase Company Info" option. If you enter your company name you will see a list of basic information including your company number, address, next annual date return and last annual return received. The company status is also shown. Your company status should be "normal". If the status is "strike off listed" you need to take immediate action. If your status is "struck off" then your company no longer exists and you may need to address the issues outlined above.
It is important that you are sure you know who has the responsibility for filing your annual return. Have you asked your accountant to do this and have you checked that this has in fact been done? If in any doubt, contact the CRO who will be able to tell you very quickly what the current status of the company is and when you next annual return is due for submission. It is worth repeating the fact that there are amost no circumstances in which late filing will be excused by the CRO - this includes the fact that you may have devolved responsibility to your accountant or other agent who then failed to do it.
An annual return (and many other company forms) can be completed and submitted online by using the CRO's online service at www.core.ie
Fenero also provide a range of company secretarial services, including the preparation of Annual Returns, and are happy to help if you have concerns over the status of your Annual Returns.