Every Irish company is obliged to make an annual return to the Companies Registration Office (CRO). This annual return comprises Form B1, to which must be attached a set of financial statements (accounts). There are exemptions available to smaller companies and unlimited companies. There are penalties for late annual returns and non-compliance.
When is the Annual Return Due?
Each company is allocated an Annual Return Date (ARD). For newly formed companies, the first ARD is 6 months after incorporation. Future ARDs will be the anniversary of the first ARD.
You can check your company’s ARD using the CRO company search facility.
The Annual Return is due 28 days after the ARD, e.g. if a company’s ARD is 31 July, it must submit its Annual Return by 28 August.
You can submit an annual return before the due date but you need to specify on Form B1 that you don’t want to change the ARD to this earlier date.
Regardless of the ARD assigned by the CRO, a company’s ARD cannot be later than 9 months after a company’s year-end date. For example, according to the CRO, ABC Limited has an ARD of 25 November and prepares its accounts to 31 December. Even though the ARD assigned by the CRO is 25 November, the latest ARD it can have is 30 September, i.e. 9 months after its year end date. Once the first Annual Return with a 30 September ARD is submitted, CRO will amend future ARDs to 30 September.
Can you Change the ARD?
As mentioned above, if you submit an annual return early, i.e. before a company’s ARD, you can request that the company’s ARD be changed to this earlier date.
It is also possible to extend an ARD once every 5 years by submitting Form B73. Remember that the revised ARD must be within 9 months of the company’s accounts year end date.
What must be included on the Annual Return?
The first Annual Return (6 months after incorporation) comprises Form B1. Thereafter the Annual Return consists of Form B1 together with accounts where relevant. Form B1 details the registered office, secretary, share capital, directors and shareholders of the company at the Annual Return Date.
In general, all companies must file full accounts with the Annual Return. However, exemptions are available for small/medium companies and unlimited companies. For example, a small company can file abridged financial statements which do not include the Profit and Loss Account. (A small company is one which satisfies at least two of the following for the current year and preceding year: less than €8.8m turnover, less than 50 employees and a balance sheet total of less than €4.4m.)
The CRO website has a detailed list of accounts requirements.
Warning! Companies limited by guarantee must submit full accounts with the Annual Return.
If an annual return is filed late, the CRO apply a late filing penalty of €100 plus €3 for every day the return is late (up to a maximum of €1,200 per return.) This penalty must be paid when you eventually submit the now-late annual return. Late filing penalties are not tax deductible.
A company will lose its entitlement to audit exemption if an annual return is submitted late in the current year or the previous year. This can lead to increased costs for smaller companies who would normally not require an audit.
Where a company has a record of persistent late filing, the CRO can impose an on the spot fine of up to €1,904.61 and/or summary prosecution of the company and/or any officer in default.
A company can also be struck off the register for failing to file an annual return. When a company is struck off, any assets of the company become the property of the State and if the company continues to trade, the owners will be personally responsible for any debts incurred. Directors can be disqualified from acting as a director of any company if there are outstanding debts when the company is struck off.
Note that there are very strict circumstances where the CRO will consider waiving the late filing penalty. The loss of audit exemption will never be waived by the CRO.
To avoid such penalties, ensure you know what your company’s ARD is and that you prepare your company accounts ahead of the ARD.
One final tip, if you are running out of time, you can file your Annual Return online through CORE or company secretarial software. You will then have 28 days from the online filing date to submit the accounts.