26/05/2022

26/05/2022

Being a Director – Eoghan Hughes

 

You have recently become a director of a company for the first time, what are the new responsibilities you have acting as a company director?

It is the company directors' responsibility to ensure that an annual return on behalf of the company is delivered to the CRO, whether the company is trading or not, each year, not later than 56 days from the company's annual return date. The annual return is completed by filing Form B1, with the CRO. It is a document setting out certain prescribed information of the company, directors and secretary, registered office, authorised and issued share capital and any share transfers in the preceding year.

A new company's ARD date is always the date six months from the date of incorporation.

After a company’s first annual return, in almost every case, financial statements must be attached to the annual return. The financial year-end of these accounts must be no earlier than nine months before the date of the annual return. Normally, for a company with a December year-end, the annual return will be filed the following September.

Generally, the documents required within the company accounts are:
  • the director's report
  • the auditor's report
  • The company balance sheet
  • The profit and loss account

Where the director fails to ensure the annual return is filed on time, late filing fees must be paid before the return can be filed. This is an additional €100 penalty, increasing by €3 per day, up to a maximum of €1,200 per return.

The following three enforcement options are also available to the CRO in relation to non-filing of annual returns.

1. Prosecution
The CRO can prosecute companies and their directors for failing to file annual returns. Directors can receive convictions for each year that annual returns are outstanding. A director with three such convictions can be disqualified from having any involvement in the management of any company and acting as a director.
2. Court injunction
A court injunction can be filed against the director. Where the notice upon a director has been served and 14 days have elapsed since the date of service, but the breach continues, an application may be made to the high court for an order directing compliance by a defaulting director with the statutory provision in question. An order for legal costs may also be made against the director.
3. Strike off
Any company which does not file an annual return in respect of any one year can be involuntarily struck off the register and dissolved. Once dissolved, any assets will belong to the Minister for Public Expenditure and Reform by law, and the protection of limited liability will be lost from the date of strike off. Directors may also lose the right to act as a director or have any involvement in the management of any company.

It is the director's responsibility to keep the details of the company's registered office of the company up to date with the CRO. Every company is obliged to have a registered office within the state where all official communications with the company are sent.

It is the responsibility of each director to ensure that their company is not in breach of The Companies Act 2014. The Companies Act 2014 expressly states that it is the duty of each director to ensure that the company complies with the requirements of the Companies Act 2014.

A company is obliged to notify the CRO within 14 days of any termination or change of directors or any change of address. Where this obligation is not followed, the company and every officer of the company are technically guilty of an offence.

The above notes are general points relating to the responsibilities of a company director and do not cover all aspects of a director's responsibilities, for further assistance our professional staff are happy to talk to you about your personal situation.