Penalties For Filing Your Annual Returns Too Late

Legal Advice on filing annual returns and how to extend your deadline.

Dear Stephen

We were recently advised by our accountant to set up a company in respect of our farming enterprise. This was set up two years ago and myself and my son are the directors of the company. Our accountant has asked us to give information in order that an annual return could be provided and this was not done in time and we have now been told by our accountant that there will be penalties and we are looking for advice as to whether we have any options here, to overturn or appeal this and as to what the likely penalties would be? John

An application for an extension of time to file an annual return can be made to the High Court or District Court.

Dear John

Yes, it is correct, there are penalties if an annual return is not filed on time. An annual return date of a company is the date to which an annual return must be filed. The annual return must be filed with the Companies Registration Office (CRO) and typically, each company will have an annual return date allocated to it.

When a company is incorporated, normally the first annual return has to be within six months of the date of incorporation and every year after that.

Failure to file an annual return on time can have certain consequences, including penalties such as a late filing fee or a prosecution of the company and its directors. There is a late filing fee of €100 which becomes due in respect of an annual return on the day after the expiry of the filing deadline with a daily late fee amount of €3 up to a maximum late fee of €1,200 per return. In addition, there can be on the spot fines imposed by the CRO, where the company has a record of persistent late filing and fines of up to €5,000 can be imposed on a conviction per breach of annual return requirements. It is also possible for companies to be struck off the register and dissolved for failure to file an annual return. If a company’s annual return for the previous year was not filed on time, the company cannot avail of an audit exemption.

However, it should be noted there is a court application pursuant to Section 343 of the Companies Act 2014, where an application for an extension of time to file an annual return may be made, to either the High Court or the District Court. If the Court is satisfied, they can make an order extending time in which the annual return of the company, in relation to a particular year, may be delivered to the Registrar of Companies. The application to the Court is made on notice to the Registrar with a grounding affidavit and the time period may be extended by the Court. Where the Court makes an order extending the time to file, the company must deliver the order to the Companies Registration Office within the time period specified in the order, which is typically twenty-eight days of the order being made. If the company then submits the annual return to the CRO online within the extended period as granted by the Court order, the annual return will be deemed to have been received on time and the consequences of the late filing, such as late filing fees and loss of audit exemption will not apply to the annual return.

There is a procedure in respect of making the application. The application or Notice to Register must be delivered to the CRO not later than twenty-one days before the Court date takes place.

The CRO will then issue a letter acknowledging that the Register has been put on notice and they may confirm that they consent to such an application. If the application is consented to by the CRO, it is likely that the Court will grant the order. You will have to set out reasons in the affidavit as to why the annual return was filed late and this will be considered by the court.

Based on the above, I would advise that you make the application under S343 of the Companies Act 2014 to apply for an extension of time to file an annual return and I would recommend that you engage a solicitor to do this.

Stephen Coppinger, is a solicitor practicing in Walsh & Partners, Solicitors and Commissioners for Oaths, 17, South Mall, Cork.

(Source – Irish Examiner – Farming – Stephen Coppinger – 05/10/2021)

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