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Company Returns

Dáil Éireann Debate, Wednesday - 15 November 2017

Wednesday, 15 November 2017

Questions (105)

Michael Healy-Rae

Question:

105. Deputy Michael Healy-Rae asked the Tánaiste and Minister for Business, Enterprise and Innovation the process in place for the late filing of the annual return form B1 (details supplied); and if she will make a statement on the matter. [48351/17]

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Written answers

One of the conditions for qualification for the audit exemption is that the annual returns and financial statements of the company are filed on time.  Companies have up to ten months from the end of their financial year to file their financial statements.

The requirement for a company to file its annual return on time is an important transparency measure.  The financial statements and other information that accompany the annual return provide important safeguards for third parties such as suppliers, creditors and employees by giving access to financial information in relation to a company.  It is important that this information is provided on a timely basis to be meaningful. 

The loss of audit exemption is a long-standing rule that dates back to the Companies (Auditing and Accounting) Act 2003 and is central to creating a culture of compliance and supporting good corporate governance practices.  Before that time compliance with filing deadlines was only 13% while today the compliance level is at 90%, a dramatic increase that is associated with the introduction of the audit exemption rule.  Compliance is not posing a difficulty for the vast majority of companies. 

In 2011, the Company Law Review Group, CLRG, reconsidered the rule on the loss of the audit exemption.  It considered several arguments in favour of abolishing the rule but did not consider any to be sufficiently compelling to outweigh the benefits of maintaining the rule.  The group also noted that the majority of companies meet their filing deadlines.  As a result, it recommended no change to the loss of the audit exemption for the late filing of annual returns. 

Currently, under the Companies Act 2014, a company may apply to the High Court and District Court for an extension of the time to file an annual return.  If granted, there is no loss of audit exemption. 

The Companies (Statutory Audits) Bill 2017, published on 6 November last, proposes amendments to section 343 of the Companies Act 2014 concerning applications for an extension of time to file an annual return.  These amendments relate to the District Court whereby, it may “if it is satisfied that there are exceptional circumstances for it to do so, make an order waiving, in that particular case, the fee required by the Registrar for the delivery of an annual return later than such period.”  In that case, the audit exemption will be lost.  This is similar to the position that obtained before the 2014 Act whereby a company could apply to the Registrar for fees to be waived.

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