Recommencement of enforcement action by the CRO against defaulting companies and directors

The Companies Registration Office (‘CRO’) suspended taking any enforcement action against companies and directors for failure to file annual returns for over 3 years due to the Covid-19 Pandemic. In recent weeks the CRO have recommenced enforcement action by issuing 10 week warning letters to defaulting companies.

Enforcement actions for failure to file annual returns

On the expiry of 10 weeks from the date of the warning letter, if the defaulting company’s annual return and supporting documents are not filed, one or more of the following actions will be taken by the CRO:-

• Involuntary strike-off of the company.
• Prosecution of the company and/or its directors in respect of each year the annual returns are outstanding up to €5,000 per offence. A director with 3 such convictions may be disqualified from acting as a director or having any involvement in the management of any company.
• A Section 797 Companies Act 2014 application to the High Court to secure compliance by the company and its officers with its annual return filing obligation. The court may order that the company or the officers responsible for the default pay all costs of and incidental to this application.

Automatic penalties for defaulting companies

A company late filing its annual returns and supporting documents is also subject to the following automatic penalties:-

• Monetary penalties of €100 the day the annual return first became late and €3.00 per day thereafter (capped at €3,600 after 3 years) until the outstanding annual returns and supporting documents are filed with the CRO.
• The loss of the right to claim audit exemption for 2 financial years.

Please contact our company secretarial manager, Maeve Walsh, at mwalsh@reddycharlton.ie or call 01 661 9500 if you have any queries or require any assistance in relation to the above.