Following a nearly 5 year moratorium on enforcement, the CRO have recommenced strike offs with Notices for such available to view in the Gazette.

While the initial companies targeted are those with no Directors it is inevitable that other grounds for involuntary strike off including those with late or missed annual returns will follow suit.

As a refresher under section 726 of the Companies Act 2014, the Registrar may institute strike off procedures where:

• the company has failed to make an annual return
• where the company receives notice in writing from Revenue that the company has failed to deliver a statement (Form 11F CRO) which it is required to deliver under section 882 Taxes Consolidation Act 1997
• the Registrar has reasonable cause to believe that there is no EEA resident director or bond in place
• the Registrar has reasonable cause to believe that no liquidator is acting where one is required
• the Registrar has reasonable cause to believe that the affairs of the company are fully wound up and that the returns required to be made by the liquidator have not been made for a period of 6 consecutive months
• there are no persons recorded in the office of the Registrar as being current directors of the company

The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 has also brought about additional new grounds under S.726including;

• failure of a company to deliver the details of the registered office of the company
• where no secretary of the company is recorded on the Register of Companies
• and failure of a company to notify the Registrar of Beneficial Ownership of certain information in relation to the beneficial owner of a company

These above grounds were commenced on 3rd December 2024.

It is the policy of the CRO to issue non-statutory reminder emails/letters to non-compliant companies. Following this the strike off process will commence with the issue of the statutory strike-off notice. If the remedial steps in the Notice are not taken the CRO will commence enforcement action and issue a strike-off notice to the registered office of the company.

The most common ground for strike off is often that of the late/missed annual returns and those companies who then enter involuntary strike off.

PLEASE NOTESection 22 of Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024whereby companies that are late with the CRO annual return in respect of any of the 5 financial years immediately preceding the relevant financial year will not lose audit exemption has not yet been commenced into law, this section may not be commenced for some time.

What options are available to your company if they have a late or missed annual return?

For those companies who choose to file their late annual return, a missed or late Annual Return will result in an automatic penalty of late fees which increases daily, and loss of Audit Exemption under the Companies (Statutory Audits) Act 2018, no matter the size of the company or company turnover. An initial fee of €100 will be applied the day after the filing deadline, with an additional €3 fee for each day passed. The late fees are capped at €1,200.00 for each Annual Return. The company may wish to file the returns and pay the late filing fees.

The alternative option available to you is a Section 343 application.

What is the process of a ‘S.343 applciation:

• The company has missed its annual return date.
• The directors or agent engage OmniPro to prepare the Notice of Application and Affidavit.
• The affidavit must be sworn in front of a practising solicitor.
• The Notice of Application is lodged with the District Court and the Affidavit is lodged with the CRO.
• The appeal is heard by a District Court judge, and it can either be granted or rejected.
• If granted, the company is given an extension that allows it to file the annual return that otherwise would have been late. All late filing fees and any audit requirements that were imposed due to late filing of that annual return are also waived.
• If the previous annual return was filed late, then the audit requirement will still apply.
• When the order has been granted, it will be lodged with the CRO as soon as possible, and in advance of the annual return. This order grants an extension to file the annual return and sets out the date by which the financial statements must be filed.
• Once the order is filed, the accounts and form B1 must be filed within the specified timeframe. This can be as many as eight weeks after the court date, but the applicant should check as each order can be different. A B1 form must be filed with a filing fee of €20.
• The company saves on late fees and two-year audit requirement.

How does a 343 Application benefit the Company?

If the extension is granted for the company, the late filing fees will be quashed, and the Audit Exemption status will be returned to the company. The company is usually given 28 days from the passing of the order to file the outstanding returns with the Companies Registration Office.

Common mistakes with the Application

In a situation where an audit is already required, an S.343 Application cannot prevent this audit. For example; If an audit is required under a shareholders agreement or if a company was late previously and filed the late return with the CRO and as a result under the Statutory Audit Act 2018 now requires an audit for the two following years, if that Company were then late in the next year and sought a section 343 application, the application cannot stop the audit in that year as in the prior year they filed late.

What are the consequences of not filing your annual return?

A Company that does not file their annual return may enter involuntary strike off as detailed in the CRO Ten week notice letter The consequences of such are very serious for a company that is still trading, this includes:

• The assets of the company become the property of the State on dissolution of the company;
• Following strike-off of a company, it ceases to exist as a legal entity as and from the date on which notice of its strike-off is published in the CRO Gazette. The date of this publication is the date on which the company is dissolved pursuant to the Companies Act 2014.
• The protection of limited liability is lost with effect from that date, and if the business formerly carried on through the company is continued, the owners are trading in their personal capacity;
• Banks should be unwilling to lend money to an entity which has, effectively, ceased to exist;
• There can also be unpleasant consequences for directors of such companies in that a disqualification order may be made against them by the High Court on the application of the Corporate Enforcement Authority.

If you would like to discuss any of the above with a member of our team please contact a member of staff at 0539100000.

The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article. The information at the time of publishing was accurate and could be subject to final changes.