Companies tardy in filing annual returns

A survey of 1,000 medium to large companies found that 30 per cent have not yet filed annual returns with the Companies Registration Office for the 1997 financial year.

It also found that 12 per cent of publicly quoted companies had not filed returns in more than two years, 3 per cent in more than three years and 2 per cent in more than six years.

Under company law, a company that has not filed its returns one year after the date required can be fined up to £1,000 in the District Court. A company that has not filed its returns two years after the date required may be struck off the register. Companies that get struck off no longer have limited liability protection and their assets become the property of the Minister for Finance.

Such companies can seek to be put back on the register within one year by applying to the Companies Office. After one year, they can only be returned to the register by way of application to the High Court. Since the launch of a process in September 1998 to clear the register of dormant or non-compliant companies, 32,000 have been struck off or dissolved.

The survey found that the sectors with the poorest record for filing returns were financial services, technology and manufacturing. Last year, only 58 per cent of the medium to large companies surveyed filed returns.

Mr Kevin Murphy, general manager of Interface Business Information, the credit information specialists which conducted the survey, said smaller companies had been excluded from the survey results because changes being introduced in company law reduce the obligation on smaller firms to file returns.

He said that when smaller companies are included, only 34 per cent of all businesses had complied with requirements and only 16 per cent had filed their returns on time.

Incorporated companies are obliged to hold an annual general meeting each calendar year, at which they must produce accounts that are not more than nine months old. Two annual meetings may not be more than 15 months apart. The annual returns presented at an a.g.m. must be filed with the Companies Office within 60 days.

Mr Murphy claimed the failure to file accounts was an indicator as to the potential success of a company. "This may be a reflection on the calibre of management of a company as much as a deliberate failure to file.," he said.

"Considering that a previous Interface survey on company compliance showed that 65 per cent of companies that never filed accounts fail, it is prudent of businesses to check the filed accounts and credit status of companies with which they trade. Filing company accounts, rather than the age of a company, is a better predictor of company success."

Earlier this year, the Tanaiste, Ms Harney, said the compliance rate for filing annual returns was only 13 per cent in 1997 and was "not much improved" for 1998. "Indeed it is a matter of disquiet that a number of significant companies listed on the Stock Exchange are considerably remiss in making statutory returns to the Companies Office," she said.