Solicitor faces €10,000 in penalty fees for missing CRO deadlines

A solicitor could still be left on the hook for €10,000 in late company filing and auditor fees after the High Court reversed a District Court decision that saw him secure a second extension in 2023 to file the annual return for a client firm.

Under the law, a second extension cannot be granted by the District Court for the late filing of an annual return in respect of a single financial year.

However, the solicitor in question persuaded the court to do so. He said that a heavy workload had resulted in him missing the original filing deadline and that if he didn’t secure a second extension, he would be personally liable for more than €10,000 in late filing and auditor fees.

In May 2023, a small Dublin-based courier company, Greenay, made an application to extend the time to file its annual return for its 2022 financial year. The District Court gave it an extension to August 22, 2023.

However, the annual return was not filed by that new deadline.

When an annual return is not filed with the Companies Registration Office (CRO) on time, a small, or micro company, such as Greenay, loses its audit exemption for two years. The CRO can also prosecute a company or its directors, and strike off the company.

In November 2023, Greenay made a further application to the District Court in relation to the same annual return. It sought a new deadline of December 8, which was granted by the court.

The solicitor for Greenay said that it was a micro company with turnover of less than €80,000.

“If the court is not minded to grant the order sought here the company will need to appoint statutory auditors for at least two years in circumstances that will be prohibitively expensive and also in circumstances that I personally will, in all probability, be held liable to discharge for late filing fees arising and statutory auditors’ fees in excess of €10,000 in circumstances that I personally omitted to afford the company sufficient time to file the outstanding annual returns and failed to ask the court for liberty to apply if I had a difficulty,” the solicitor told the court at the time.

With the extension granted, the annual return was duly filed.

That was despite the solicitor having been informed the day before the hearing by the CRO that, under legislation, a second extension could not be granted by the District Court. The CRO secured a judicial review of the District Court decision in respect of Greenay.

It also secured a judicial review within the same ruling by the High Court – of a District Court decision to allow a separate and unconnected company, Kitchen Innovations, be granted a second extension to file an annual return.

In the case of both firms, the High Court has invalidated the filings made of the annual returns for which the District Court had given second extensions.

“To grant less than the relief sought would also be to countenance a situation where obligations created by the Oireachtas with regard to the filing of annual returns were circumvented and the ‘windfall’ flowing from invalid orders was retained by the respondents,” said Mr. Justice Mark Heslin.

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