2016 Ezine Newsletter

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CRO Ezine 17th May 2016

DISTRICT COURT APPLICATIONS FOR EXTENSION OF TIME TO FILE AN ANNUAL RETURN

Under Section 343(5), Companies Act 2014, since 1 June 2015 it has been possible to apply for an extension of time to file an annual return to either the High Court or to the District Court.

Application to the District Court is made on notice to the Registrar by means of an Affidavit. If an Order is granted by the Court and the company files the annual return within the extra time specified by the Order, the documents will be deemed to have been received on time and the consequences of late filing (late filing penalties/loss
of audit exemption) will not apply to that annual return.

The CRO has recently reviewed certain aspects of its role in the District Court process and, as a result, the following arrangements will apply with immediate effect:

(1) Section 343(7), Companies Act 2014, provides: "In respect of an annual return that is to be delivered on or after the commencement of this section, the court for the purposes of subsection (5) shall be the District Court for the District Court district where the registered office of the company is located or the High Court."

The Registrar has been advised that a company whose annual return should have been delivered before commencement of the Act on 1 June 2015, cannot apply to the District Court under section 343(5) for
an extension of time to file that annual return. The application in that case would have to be made to the High Court.

The Registrar will object to any application made in the District Court for an extension of time to file an annual return that should have been delivered prior to 1 June 2015.

(2) Paragraph (4) of SI No 256 of 2015 - District Court (Companies Act 2014) Rules 2015, requires that the Affidavit relied on in an application to the District Court shall explain why it has not been possible to prepare the annual return and set out, and verify, any facts supporting the reasons why the annual return was not delivered to the Registrar within the time permitted by sections 343(2) or 343(3), Companies Act 2014, and set out, and verify, any facts supporting any additional reasons why it is alleged that it would be just to make an Order extending time.

The Registrar reserves the right to object to any application in the District Court for such an Order where, in the opinion of the Registrar, the reasons provided in the Affidavit and the supporting facts do not explain or verify why it was not possible to deliver the annual return to the CRO within the time permitted by sections
343(2) or 343(3), Companies Act 2014, and are therefore not sufficient to warrant setting aside the company’s legal obligations under the Act.

(3) A dissolved company does not have a legal existence until such time that it is restored to the Register.

This means that a dissolved company cannot make an application to the District Court under section 343 to extend time to file its annual returns as it has no legal standing to make such an application. The Registrar will object to any application in the District Court for an extension of time to file an annual return that is made by a dissolved company.

Please note that the Registrar reserves the right to be represented in the District Court in any case where an application is made for an extension of time to file an annual return under section 343(5), Companies Act 2014.

Further information on the District Court process is available in CRO Information Leaflet No 39 and at Missed-Deadlines

PUBLICATION OF CRO FREEDOM OF INFORMATION ACT 2014

The CRO and RFS Model Publication Scheme for the Freedom of Information Act 2014 is now available at the following link.

https://www.cro.ie/About-CRO/Freedom-of-Information

DIGITALLY CERTIFIED DOCUMENTS FOR MORTGAGES/CHARGES

CRO has commenced issuing all Mortgage Certificates  as “digitally certified” documents since April 13th 2016.  These has replaced the paper Mortgage Certificates being posted out to presenters. This will facilitate immediate receipt of certification by the presenter as soon as the charge has been registered. Theywill be emailed to customers as a pdf document to the email addressentered in the “Presenter Details” section of the eform submitted to register the charge.  

The pdf document contains a coloured banner at the top of the screen to confirm that it has been digitally signed as certified by the CRO. This provides an assurance to the recipient that the document is authentic, has not been tampered with and  has been independently verified as sourced in CRO.  Presenters can provide these digital certificates directly to third parties by email.

DEADLINES FOR COMPANIES WISHING TO BE CONVERTED TO A DAC OR AN LTD

Under the 2014 Companies Act, all existing private companies limited by shares (ie. companies incorporated under the old Companies Acts) have the option of converting to one of the new company types (LTD or DAC) during a transition period which ends on 30 NOVEMBER 2016.

Companies that have not applied to the CRO to be converted to either a DAC or an LTD during the transition period will be automatically converted to an LTD by the CRO after 1 December 2016.

Companies wishing to be converted to a DAC must, under the Act, pass an ordinary resolution to convert by 31 AUGUST 2016 and should follow up by filing a Form N2 and amended Constitution with the CRO as soon as possible thereafter.

Companies wishing to convert to an LTD and adopt a new Constitution should do so as soon as possible as the CRO cannot guarantee that applications received at the very end of the transition period will be processed before 30 November.

Directors of companies wishing to be converted to a new company type are therefore requested to consider this matter at the earliest opportunity and to file your conversion applications with the CRO in good time.

CONVERSION TO NEW COMPANY TYPE - CERTIFICATION OF RESOLUTIONS

Under the 2014 Companies Act, a company may convert to an LTD by submitting Form N1 (free) together with a special resolution and a copy of their new constitution to the CRO, or, if converting under Section 60 of the Act, only an N1 & new constitution is required.

Where a special resolution contains a number of decisions, CRO requires the resolution confirming the shareholders’ consent to the conversion to LTD to be extracted and filed with the N1 form, and that extract must be certified by a director or secretary as a true copy of the original.

When converting to one of the new company types, a list of subscribers must be attached to the new Constitution. This list must be the ORIGINAL SUBSCRIBERS LIST as submitted to the CRO on incorporation, not the current list of subscribers/shareholders.

In addition, it is the latest Authorised Share Capital and Share Value, as submitted to the CRO which must be stated on the new Constitution.

Companies converting to the new LTD type do not need to state the Authorised Share Capital, but the current Share Value must be the most up to date value, as filed with the CRO

See sections 191-198, Companies Act 2014 and SI No 39/2002 – section23(1), Companies Act 1990 (Form and Content of Documents Delivered to the Registrar) Regulations 2002.

MORTGAGES AND REGISTERING FOR ROS

Forms C1, C1A and C1B and F8, F8A and F8B must now be filed electronically using a ROS signature. There is no facility to file these forms manually.  

The form is not filed until the last ROS signature is applied using a ROS cert. Please be aware of the statutory timelines in this regard. The content of these forms should be checked thoroughly as if they are incomplete or incorrect they will be rejected.

The ROS cert or sub-cert must be in the name of the individual signing the form.

Two separate individuals are required to sign, one on behalf of the company, and another on behalf of the charge holder. In this regard, please ensure that they are both carefully entered in the Form/s as signatories. Please note that the full name must be stated and not a shortened version (e.g. first name, initial or surname). 

To file charges under the Companies Act 2014:-

Also see CRO website at https://www.cro.ie/Services/Registering-for-ROS

  •  Familiarize yourself with the CRO website, new forms and Information leaflet no. 27.

For further details please See Mortgages page.

https://www.cro.ie/Post-Registration/Company/Mortgages-and-Charges

SMALL AUDIT EXEMPT COMPANY - ABRIDGED FINANCIAL STATEMENTS

Under Sections 352, 353 & 360, Companies Act 2014, a small audit exempt company is required to file the following Financial Statements in respect of financial years ending on or after 1 June 2015:

  • Extract from Director’s Report in accordance with section 329 of the Companies Act 2014
  • Balance Sheet
  • Notes to the Financial Statements

See Appendix 1 to CRO Information Leaflet No 23 for a sample Abridged Audit Exempt Financial Statements, Appendix 2 for information on the Directors' Report and Appendix 4 for information on the Notes to the Financial Statements. If in doubt, companies are advised to obtain professional advice in relation to the contents of their Financial Statements.

DO NOT LEAVE IT TO THE LAST MINUTE TO FILE YOUR ANNUAL RETURN

CRO regularly receives correspondence from presenters who miss their annual return filing deadline because (a) they encountered technical problems while attempting to submit their B1 electronically on the last day, or (b) they posted their documents to the CRO in the days before the deadline and they were delayed in the post.

In light of the very serious consequences of late filing (ie late penalties and loss of audit exemption), CRO would exhort companies not to leave it to the last day to submit your B1 on-line as there is a risk that a temporary issue with your PC, your broadband service, web browser or server could prevent you from completing the filing on time.

Similarly, if you are sending an annual return to the CRO close to the filing deadline, CRO advises that you use a form of delivery service which guarantees that the documents will be delivered on time and provides proof of delivery. There are a number of providers offering this service (eg An Post's Express Post service guarantees next day delivery). Documents can also be hand delivered to the CRO's Public Office at 14 Parnell Square, Dublin 1, which opens from 9.30am to 4.30pm, Monday to Friday.

The 2014 Companies Act places the responsibility on the company itself for on-time DELIVERY of its annual return to the CRO.

IF AN ANNUAL RETURN IS DELIVERED LATE, THE CRO HAS NO DISCRETION IN RELATION TO THE APPLICATION OF PENALTIES AND LOSS OF AUDIT EXEMPTION.

For more information, please see Missed Deadlines page or Information leaflet 39.

PRINTING DOWN B1 SIGNATURE PAGES WHEN FILING THROUGH CORE

When filing an annual return through CORE, unless you are signing using ROS signatures, you MUST print down a B1 signature page, sign it and submit it to the CRO (along with financial statements where required).

If you do not send a signed signature page to the CRO within 28 days of submitting the e-B1 through CORE, you risk incurring late filing penalties and losing your audit exemption.

For more information click on https://www.cro.ie/Portals/0/Leaflets/B1online_DL%20v1.6.pdf

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