In Ireland, the annual return refers to a statutory requirement for companies to file certain financial documents and reports with the Companies Registration Office (CRO) on an annual basis. Failing to submit the annual return within the specified timeframe can have several consequences. Here are some of the potential repercussions of a missed annual return in Ireland:
Late Filing Penalties
The CRO imposes penalties for late filing of annual returns. The penalty amount depends on the length of the delay, with higher penalties for longer delays. The penalties increase over time, and failure to pay them can result in legal action.
Loss of Audit Exemption
Certain small companies in Ireland are eligible for audit exemption if they meet specific criteria. However, if a company fails to file its annual return on time for two consecutive years, it loses its entitlement to audit exemption. This means the company will need to engage an auditor to review its financial statements, leading to additional costs.
Prosecution and Legal Action
Continued non-compliance with the annual return filing requirements can result in legal action. The CRO has the authority to pursue prosecution against the company and its directors for failing to meet their statutory obligations. This can lead to fines and potentially even disqualification of directors from serving in similar roles in the future.
Loss of Good Standing
Failing to file annual returns on time can negatively affect a company’s reputation and standing in the business community. Other businesses, suppliers, and financial institutions may view the company as unreliable or non-compliant, which can impact relationships and opportunities.
Difficulty in Accessing Services
Non-compliant companies may face difficulties in accessing certain services or benefits. For example, they may face challenges in obtaining loans or credit from financial institutions, registering for government contracts, or participating in tenders.
Struck-off and Dissolution
If a company consistently fails to file its annual returns, the CRO has the authority to strike off the company’s name from the register. This results in the dissolution of the company, and its assets may be seized by the State. Striking off a company can have severe implications for its directors and shareholders.
How To Avoid These Sanctions?
It’s important to note that the specific consequences and procedures may vary depending on the circumstances and the discretion of the CRO. It is always advisable to comply with legal obligations and filing deadlines. Here at Irish Formations we have a specialized team who can handle you first annual return. We make it a very simple and easy process by handling all your paperwork and submissions. All we require from you is a signature. With the purchase of any of our premium packs you first annual return is included. This will be due precisely 6 months after incorporation and we will notify you on the day. After this your return will be due every year on this date. We can give you a free referral to an accountant for the filing of your second return and all those after.