A fear many directors and presenters have is missing the Annual Return Date (“ARD”) for a company. This is because the penalties are severe particularly for SME companies.
If a company has missed the deadline to file its annual return electronically within 28 days of its ARD or failed to submit the signature page or upload the financial statements within the second 28 day deadline then the company is facing paying late filing penalties and potentially the loss of audit exemption.
Two Options if you have missed the filing deadline
If a company has missed its filing deadline it can either:-
- File the late annual return with the financial statements which may be filed audit exempt and pay the late filing penalties. The company will lose audit exemption for the following 2 financial years.
- Make an application to the district court for an extension of time to file the annual return and financial statements. If the order is granted the company will retain the audit exemption and avoid paying late filing penalties
How Can CLS Help
CLS Chartered Secretaries can assist companies to make the application to the District Court. We can give you a definitive time frame and fixed cost to making the application. Click here to download our District Court Application Form. For more information please contact one of the team on 059 9186776 or send us an email.
Loss of Audit Exemption
Since the introduction of the Companies (Statutory Audits) Act 2018 a company that is late may file the audit exempt financial statements with its late annual return however it will lose audit exemption for the following 2 financial years.
This is massive penalty on SME companies and the only option companies have is to make an application to the District Court to seek an order to extend the time to file the late annual return and financial statements.
If order is granted by the Court, the company must file the order with the CRO within 28 days and then file the annual return and the financial statements (audit exempt if applicable) with the CRO within the extended time granted by the Court. This procedure does not change the Annual Return Date, it only extends the time in which the company has to file the outstanding annual returns.
Reason for not filing on time
A company that has missed its ARD deadline must have verifiable evidence to support the explanation of why the Annual Returns and Financial Statements were not filed on time. Examples of verifiable evidence include a medical letter from your doctor, letter from your accountant on headed paper, proof of express postage, confirmation that your internet connection was down when attempting to file online.
CRO Rules and Objection
Please note the CRO will object to the District Court Application for the following reasons:
- Company is dissolved
- Annual return is due to be filed pre 1st June 2015 and is applying to the district court
- Failure to explain why it was not possible to file on time
- The documentation was lost or delayed in the post and there was no proof it was sent
Legal Representation
The company cannot represent itself so it must seek the services of a solicitor or barrister to make the application to the Court.
Location of the Application
The company must make the application at the District Court where the registered office is situated. We will arrange for the registered office address to be changed to Dublin so that all applications can be made in the Dublin District Court. This will allow the solicitors to make the application before a Court which is familiar with this new procedure. This familiarity will facilitate the timely hearing of the application and issuing of the Order. The registered office address will then be immediately changed back to its original address.
Costs
A company will have to weigh up the cost of paying the late filing penalties in addition to the cost of an audit to be carried out for the following two financial years against the cost of making the application to the District Court.
For group companies that now can avail of audit exemption, the district court application will be the cheaper option.
Struck Off Company
CRO have confirmed that the district court application may not be used for companies that have been struck off the register. Companies that are strike off listed can still make the application but must act quickly.
Advantages
- No loss of audit exemption or audit for 2 years
- No late filing penalties
- Certainty that our legal team that will make a swift application ensuring that the order is issued as soon as possible
- Fixed fee for the application
Disadvantages
- Cost of making the application
- Change of registered office address on a temporary basis.
How Can CLS Help
Contact one of the team on 059 9186776 or send us an email.
Please Note:
Our CLS Insights aims to bring you practical information and news on Company Law and Company Secretarial. We cover the topics that matter to your business and give practical tips and also the benefit our experiences. Please remember this article is a guide and legal advice should always be obtained. If you have any queries please contact one of the team and we would be happy to help.
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