High Court judges will not be over the moon about the new proposal in the forthcoming new Companies (Statutory Audits) Bill 2017, effectively moving the Section 343 District Court application to waive the CRO late filing fee and hold onto audit exemption to the High Court.
You can still make this application in the District Court but the plan is that the court will only relieve you of the late filing penalty and you will be deemed to have lost your audit exemption.
Most companies can live with the late filing penalty but the thing that hits hardest is the immediate requirement to appoint an auditor in respect of a company that was audit exempt.
This is the second major piece of legislation that will amend the Principal Act, the Companies Act 2014 which was commenced here on 1st June 2015 and introduced a new application that could be made in the District Court in respect of companies that are late with their statutory filings in the companies registration office.
Prior to that and since 2002 companies could apply to the High Court to extend their annual return date but it appears that absolutely nobody made that application!
The law was changed to make the application more user-friendly and less expensive in the local District Courts and in or around half of 1% of the total corporate population make this application each year requesting a District Court Judge to exercise their discretion to extend the annual return date in respect of the late filing of statutory CRO returns. Basically companies have one bite at the cherry, this isn’t an application you can keep making every year as it’s on notice to the Registrar of Companies and it’s not going to wash if you use this application more than once in a five year period.
Heather Humphries, the Minister for Business and Innovation, the Minister responsible for company law has now put forward proposals in the Companies Bill 2017 that in all likelihood will see the end of the Section 343 application in that it is proposed to raise the bar that an applicant be required to show that exceptional circumstances exist for the granting of such an order to extend the annual return date and to allow the company hold onto its valuable audit exemption.
It’s the law, if you are late with your statutory returns with the CRO not only do you suffer a substantial late filing penalty but you lose your audit exemption and are immediately required to appoint an auditor for the next two years.
The Companies Accounting Act 2017 introduced a new definition for small companies basically a company with a turnover below €12 million and also introduced an even smaller micro company, which is a small company with a turnover below €700,000 and these companies have much reduced filing requirements in the CRO and don’t need an auditor provided they are on time with the statutory return.