CRO late annual account fines

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belmaynebuye

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Myself and a friend setup a company two years ago. We went gung ho into setting it up with the aim of doing web design. Work commitments and lack of any planning resulted in us not using the company in any way shape or form. We have no assets or liabilities, we made no profits or loss. After 6 months we forgot about it and never made any returns to the CRO. We finally got round to winding up the company this month and have to pay fines of €1200. I think this is a little much for a company that didn’t do any business what so ever.

Does any know if the CRO can waive fines? I have not got this sort of money to be throwing away and would like some advice if anyone has been in a similar situation?

Any help appreciated...
 
Unfortunately, the CRO have a policy of never waiving late filing fees.

Your story is a prime example of why nobody should ever set up a company unless (1) they have received advance professional advice about the implications; and (2) they are 100% certain that they need a limited company structure for their business.
 
I agree totally, as the guy in the Revenue told me, "It easy to set one up but trying to close one off is a different story". A lesson learned in this case. I was such a ejit.

Thanks anyway
 
In case it's of any use in relation to closing the business:

[broken link removed]
 
As directors, did you not get letters from CRO informing you of your 6 month filing date?
 
I know of one guy who got his late filing fee's waived. He never filed his annual return as his mother had died in or around the time the annual return was due. He explained this in a letter to CRO and they did waive the fee's. According to CRO the only two instances in which they will waive late filing fee's on annual returns is

(1) If there was a death in the immediate family
(2) If you were seriously ill (and have a doctors note to the same effect)

Other than those two scenario's, CRO said that they do not waive the filing fee's at all.

Just a note to other readers of this post who have new company, the 6 month Annual Return (B1 form) which the the companies office request you to file, MUST BE FILED REGARDLESS OF WHETHER THE COMPANY IS TRADING OR NOT.
 
GED said:
Other than those two scenario's, CRO said that they do not waive the filing fee's at all.
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I know of a case where the late fee was waived (as a once off) for a company limited by guarantee.
 
To return to the OP's issue, as he said, he didn't do anything about it, he "finally got around " to winding the company up. There do not , from the post, appear to be any reasonable mitigating circumstances to justify any waiver of fees by the CRO. If I get fined for not having a TV licence or Road Tax or other statutory document just because I didn't "get around to it" I do not see what defence I have. This is a further lesson in the ongoing threads on companies on AAM and is a lesson well worth noting by anyone considering setting up a company. It is not the same as a sole trader and ignoring or forgetting about something can have serious consequences.
 
Classic.

CRO would have written
1. Setting out your obligations.
2. Reminders

You would have received a very easy to read booklet setting out your obligations and responsibilities and that penalties were severe.

People need to wake up. I cant believe that people expect mitigation in these circumstances. Previous poster is right -get proper advice and listen to it. Also advisors, accountants included, should lay it on the line. Too much wishy washy advice being given. Accountants should treat their clients as adults. Too often they over protect the client.
 
Many times in accountants forums I have heard accountants in practice saying that before a person signs on accepting appointment as director of a company they should be made do some sort of course, like the driver theory test or something, so that they are at least aware of their basic rights and obligations. It is not fair to expect the director-designate to have this knowledge already and many accountants just do not have the time to coach directors on the 40 odd years of companies legislation resulting in a serious lack of knowledge of company law among directors of small owner managed companies.
 
Graham_07 said:
It is not fair to expect the director-designate to have this knowledge already and many accountants just do not have the time to coach directors on the 40 odd years of companies legislation resulting in a serious lack of knowledge of company law among directors of small owner managed companies.
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But the rules are very simple, so much so that the basics could be written on the back of an envelope, ie

1. Always ensure that your company's annual returns and accounts are filed on time with CRO. Details of due dates for each company appear on the CRO website.

2. Do not under any circumstances borrow money from your company.

3. Always ensure that the company is solvent and has sufficient resources to finance its business.

4. Always ensure that your company honours its commitments to creditors, Revenue and shareholders.

5. Always ensure that your company keeps proper books of account & business records. Get professional advice on all relevant aspects if necessary.

6. If you are involving your company in complicated business transactions, always get professional advice first.

7. Be prepared for significant problems, including additional expense and legal exposure for the company and its directors, unless you observe the points listed (1)-(6) above.
 
I think the CRO should borrow last posters points and possibly incorporate into their literature. If you can't follow them don't go setting up a company.
 
Going back to the OP's original post, and what options does he have, if the directors simply choose to ignore the company and its obligations, in reality the CRO will eventually strike the company off the register for failure to file annual returns. THIS IS NOT THE RECOMMENDED COURSE OF ACTION, as it will leave the directors open to the possibility of enforcement actions by the CRO and the ODCE, which could include fines and disqualification from acting as directors, but it is possible that they would hear no more. THIS IS NOT ADVICE, ONLY AN OBSERVATION. If the two directors have no intention of acting as directors again, it may be a risk they are willing to take.

He should also note that although the late filing penalties for the first annual return may now be capped at €1200, the clock will probably be ticking on the next annual return, so if he is going to shut it down properly, the sooner he does it the better - costs wise!
 
oopsbuddy said:
Going back to the OP's original post, and what options does he have, if the directors simply choose to ignore the company and its obligations, in reality the CRO will eventually strike the company off the register for failure to file annual returns. THIS IS NOT THE RECOMMENDED COURSE OF ACTION, as it will leave the directors open to the possibility of enforcement actions by the CRO and the ODCE, which could include fines and disqualification from acting as directors, but it is possible that they would hear no more. THIS IS NOT ADVICE, ONLY AN OBSERVATION. If the two directors have no intention of acting as directors again, it may be a risk they are willing to take.



The poster is probably correct and that 95% sure that this is what will happen - you will get away with it.

However the 5% chance is too risky. If caught each director can be fined €2,500 for each offence, will hold a criminal record, could be banned from ever acting as a director again, be unable to raise finance again and may be jailed.. No way can you take this course of action.
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I am in a position where details relating to my filing were sitting with my accountant - I realised they had not been submitted after getting correspondence from CRO. Through an error in their processing, my accountant failded to get them in on time. As a result I have incurred a fine. Probably a stupid question but does the liability rest with me if I can prove I did everything in my power to get this done before the deadline? Any advice welcome.
 
qwikbrownfox said:
I am in a position where details relating to my filing were sitting with my accountant - I realised they had not been submitted after getting correspondence from CRO. Through an error in their processing, my accountant failded to get them in on time. As a result I have incurred a fine. Probably a stupid question but does the liability rest with me if I can prove I did everything in my power to get this done before the deadline? Any advice welcome.
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The short answer is yes, it is the director's responsibility to ensure the annual returns are filed on time.

Here is the CRO's penalty waiver policy:

http://www.cro.ie/ena/annual-return-penalty-waiver.aspx
 
Have seen penalties waived in the case of a company set up to run a voluntary organisation....that is it though....
 
Difficulties between a company and it's agent resulting in late filing are NOT grounds for waiver of late fees. It is up to the directors to ensure filin gis on time, even if they have an agent who is to do that for them. If the letter of engagement clearly states that the accountant was to do the CRO returns and the directors provided the data in sufficient time and the delay was solely as a result of non performance by the accountant of their agreed responsibilities then there might be an argument for a reduction in the accoutancy fees equivalent to the CRO late fee. It's worth a try.
 
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