I propose to take Questions Nos. 238 and 239 together.
Section 343 obliges companies to make an annual return to the Companies Registration Office. 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.
Under section 874 Companies Act 2014, the Registrar of Companies may deliver a notice to a company or person if the Registrar has reasonable grounds for believing that the company is in default in the delivery, filing or making to the Registrar of a return or similar document required under the Companies Act 2014.
A defaulting person or company must, within the period of 21 days following the issue of a notice of on-the-spot fine by the Registrar to that person or company:
- Remedy the default by filing the outstanding annual return(s), and
- Make to the Registrar a payment of the amount set out in the notice.
The defaulting person or company would be prosecuted if the terms of the on-the-spot fine notice are not complied with within the 21-day period.
To date the Companies Registration Office has not utilised this enforcement mechanism as other measures available to it under the Companies Act 2014 have proved to be effective. The measures available to the CRO where a company is in default of its statutory obligations to file are a Court Order under section 797 Companies Act 2014; prosecution under section 865 or involuntary strike-off under Part 12 Chapter 1.