One of the many obligations that people in business have is to file an annual return to the Companies Registration Office (CRO).
For those not familiar with it, the CRO has a number of core functions, including the incorporation of companies and the registration of business names, the receipt and registration of post incorporation documents and the enforcement of the Companies Acts in relation to the filing obligations of companies.
Companies have an obligation under law to file certain documents with the CRO. These include annual returns, and in most cases they must also file annual accounts.
Unfortunately, not all companies comply with their obligations to file documents. The CRO can take a number of measures to deal with companies who fail to file their annual returns, including prosecution of the company or directors or striking the company off the register. Companies who fail to file annual returns may be struck off the register of companies. If a company is struck off, the protection of limited liability no longer exists and individuals can be held personally liable for any debts incurred after strike off. Also, the assets of such a company will become the property of the State.
In September 1998, the CRO began a vigorous programme of company strike offs to address the high level of non-compliance. Between September 1998 and June 1999 over 27,000 companies were struck off. The programme of enforcement is ongoing. In addition to this, it has also introduced fines for late filing of annual returns.
As part of this programme of compliance, the CRO introduced electronic filing of returns in order to speed up the process. The process is relatively straightforward and involves a firm preparing an annual return as usual using a company secretarial software package that supports e-filing to the CRO. Each signing director and company secretary is issued with a CRO ID and PIN number, while each company is issued with a digital certificate. The return is signed with the director/secretary CRO ID and PIN. Instead of downloading a hard copy, a send option transmits the form electronically. A return is deemed received when the cover sheet with any required attachments are lodged within 28 days of receipt of the electronic annual return. Where attachments are required and not received within the 28 days, the document is deleted and deemed not received.
Leahy & Co, a Marino-based accountancy firm, became the first to submit an electronic filing. The company, which employs two partners and 11 other staff, saw it as an opportunity to lessen an ever-increasing workload. “We think it’s the way to go for the future. As the practice grows bigger, anything which increases our productivity is welcome,” says Paul O’Dwyer, practice manager at the firm. “Prior to this, all forms had to be signed by both directors. This was the most time consuming part of the process. Now, once a signature is authorised by the CRO, PIN numbers can be issued, removing the need to collect signatures,” he says.
The package used by Leahy & Co was Relate Company Secretary from Relate Software. The company was set up in August 2001 specifically to target the market surrounding companies’ obligations to the CRO, according to Ray Rogers, managing director at Relate. “The CRO was bringing in a new compliance regime that aimed to bring relatively low compliance up to 100pc. In addition to this a new Companies Act was introduced in 2001,” he says.
Information is sent to the CRO via EDI (electronic data interchange) and companies wishing to file electronic returns will have to use a software package. The CRO provides the appropriate spec to potential suppliers and Relate was one of several suppliers who took an interest from the start.
Relate’s package contains a multi-user database that handles all company information. As details change, the database can be updated. All of the work can be done offline and dialling up is only necessary when returns are to be filed.
While Leahy & Co was the first to file an electronic return last December, Rogers says that currently it is trying to get all of its client practices up and running on the system. Within months, he hopes to have a couple of thousand returns filed using the company’s software.
By Dick O’Brien