Dormant Limited company and audited accounts

babystrawberry

Hi,

I set up a limited company back in 2008 (naively) in order to allow me contract into a company for 6 months and get a wage from it. I stopped trading through the company in Aug 08 and unregistered it from the revenue and closed bank account. It was myself and my dad down as director/secretary of the company – had my dad down on company simply because I needed a second name. There was no one else involved in the company.

I was told at the time from the guy who did my accounts that it would cost a ‘huge amount’ to close the company and was a ‘big deal’ as ads had to put in national papers etc. and would be easier to simply keep it open and submit annual return each year at cost of 20/40 euros. I have been doing this since myself (copy and paste on the previous year’s annual return). However I never sent these as registered post, unfortunately in 2012 I sent my return in but it was never received and I have no proof of sending the return as was not registered – silly, costly and unfortunate oversight by me now I will admit and I am now fully aware that it was my responsibility to ensure it was delivered to the CRO – but little I can do about this now.

I was hit with a late filing fee and appealed to the Ombudsman on certain grounds – they heard and reviewed my case but unfortunately it was unsuccessful.

I am now back to square one of late filing fee, I have to resubmit annual return for 2012 as well as submitting audited accounts as well as audited accounts for 2013.

I was just wondering has anyone been in this type of situation before as I am now employed and don’t have any need for the company, I only needed it for trading for 6 months. I plan on closing/voluntary striking it off. In order for me to do this I have to clear everything (accounts and late filing fee). I unfortunately cannot afford to pay for all this. I have been told that if I don’t pay the company will be involuntary struck off (that doesn’t bother me as want to close it anyway).

Also should the CRO decide to go a step further they could prosecute me. Is this true? What is involved in this? Is this simply that myself and my dad could be blacklisted as directors and could no longer ever have a company in our name (this does not bother either of us if it is the case). I have a number of accountant auditors for quotes on audited accounts and they have suggested off the record simply don’t pay the fee and get involuntary struck off. It is possible he CRO might hand over the case and we could get blacklisted as directors but we are ‘small fish in a big pond’??

My real worry is that I could get brought to court in a few years for this – I would obviously loose the case as I know on paper I am in the wrong but as a result of the court case have to pay the curt fees for the CRO as well as all the late filing fees and submitting accounts for all the subsequent years.

I hope I have made sense in this post and thanks in advance for information on it. I know no one can tell me what to do but I would really like to hear worst case scenario what might happen me should I not pay this as currently I cannot afford to clear this??

Thanks

Peterdalkey

I would think you are unlikely to get better off the record advice on here than you got from the professionals. The proper legal position remains as you have outlined.

babystrawberry

Also should the CRO decide to go a step further they could prosecute me. Is this true? What is involved in this? Is this simply that myself and my dad could be blacklisted as directors and could no longer ever have a company in our name (this does not bother either of us if it is the case).

My real worry is that I could get brought to court in a few years for this – I would obviously loose the case as I know on paper I am in the wrong but as a result of the court case have to pay the curt fees for the CRO as well as all the late filing fees and submitting accounts for all the subsequent years.



Thanks, so I could potentially get brought to court and pay legal fees for me and the CRO as well ashaving to pay everyting i currently owe as well as whatever has built up on top of it?

Peterdalkey

You have not stated how much you actually owe. If you are impecunious, you could simply pay them €5 per month until the debt is paid off. No jusge will find against you if you have shown a willingness to discharge the debt! Once paid you can apply for a voluntary strike off as follows

In limited circumstances there may be an opportunity to apply to the Registrar of Companies for voluntary strike-off from the Register of Companies rather than utilising liquidation procedures. There are a number of pre-requisites to such an application but, if they can be met, then the trouble and expense of a liquidation of the company can be avoided.

The company must have ceased trading and will not re-commence trading in the period prior to strike-off;
The amount of any liabilities of the company do not exceed €150.00;
The company’s issued share capital does not exceed €150.00;
All outstanding annual returns must be filed with the Companies Registration Office and all outstanding fines and penalties must be discharged;
The consent of the Revenue Commissioner must be obtained to the strike-off.

The Corinthian

Ahhh... gone are the days when you could set up a limited company and to shut it down all you had to do is not file anything and the CRO would just de-register you after about 18 months... long time ago.

Yes, it's an utter pain in the arse nowadays to do so. I had to about eight years ago; voluntary, no debts, etc. You'd think it would be straightforward? Guess again. Setting up a company in Ireland is relatively red-tape free; closing it down again is another story.

Your returns need to be up to date at the time you shut down which means that you essentially have 'time windows' where you can shut down - miss one and you end up having to have your taxes done all over again. Advertising that you're shutting down (so as to 'warn' any potential creditors) is necessary too; if I remember correctly any national newspaper will do the trick, and I think I used the Irish Examiner at the time as an advert there was cheapest.

As to legal implications, fines and so on; I can testify to the fines for late filing and the like, but while I too have heard simelar stories about blacklisting and so on, I fortunately did not suffer this.

My advice is to leave it to your accountant to do all this for you, and in future also use an accountant who does a lot of work with contractors, as they'll be able to 'loan' you an off-the-shelf limited company for the duration of the contract and spare you all of this hassle.

pedroeibar1

There are about 7,000 companies struck off every year, so on past performance by the CRO/ODCE it seems that you probably would get away with doing nothing. It is unlikely that the CRO or the ODCE would follow up and initiate proceedings if the company was dormant and had paid all its creditors in full; they have bigger fish to fry.(My opinion, not legal advice.)
At a future date the Govt. might decide it could be a nice earner to follow up on the non-payments and if they hit you it would be for the max fine of €1,200 plus filing fees. However, if they do come after you and you need to put the company back on the CRO list it would involve a trip to the high court.
There is no blacklisting of directors (outside of due process, and that is not an easy route for the enforcers), but if you intend to take up a role as a director again you could be asked if you ever were a director of a company that was involuntarily struck off. (All applicants for regulated positions are automatically asked that question). Also, it could have an impact on your ability to obtain credit in any new Limited entity, as more suppliers now do a director search when setting up a new credit account.
It’s under a grand for you at this stage; I’d pay as your father also is involved.