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Companies Registration Office Report 2017

Contents

  1. INTRODUCTION
  2. ACTIVITY IN 2017
  3. THE COMPANY LIFECYCLE
  4. OTHER ENTITIES REGISTERED BY THE CRO
  5. CORPORATE FUNCTION IN THE CRO
  6. COMING IN 2018
  • APPENDIX 1: DETAILED STATISTICS
  • APPENDIX 2: REGISTRAR OF COMPANIES AND OTHER AUTHORISED OFFICERS
1: Introduction

The Companies Registration Office (CRO) Mission Statement is:

to oversee the highest possible rate and quality of annual return filing on the part of companies in accordance with the relevant statutory provisions and to ensure that information on companies published in turn by the CRO is timely and accurately reflects the information provided by those companies.

The CRO is a Government organisation under the remit of the Department of Business, Enterprise and Innovation and is the central repository of public statutory company law-related information on Irish companies. Its main functions are:

  • Incorporation of companies
  • Registration of company post-incorporation documentation
  • Enforcement, prosecution and striking companies off the register of companies
  • Registration of business names/changes in business name particulars
  • Provision of information to the public

You can register a company, business name (trading name), foreign company branch (external company) or limited partnership with the CRO.

2: Activity in 2017

Office Relocation

The Companies Registration Office (Dublin) moved address in May 2017. The CRO

Public Office is now located in Bloom House, Gloucester Place Lower, Dublin 1.

The entrance is on the corner of Sean MacDermott Street and Gloucester Place Lower.

Public Office Entrance
Public Office Interior

Mandatory Electronic Filing

On 24th August 2016, the Minister signed a Statutory Instrument (S.I. 458 of 2016) mandating the electronic filing of the forms B1 (annual return), B2 (change in registered office), B10 (change in director/secretary information) and B73 (change in annual return date) from 1st June 2017. An advertising campaign to advise companies of the changes began in November 2016 which then continued throughout 2017.

There are now over 215,000 Irish companies on the register all of whom are required to submit an annual return during the year, meaning that the B1 comprises over 40% of all documents received by the CRO in any given year. Since 1st June 2017, the sole means of filing a B1 and financial statements and paying for an annual return has been in electronic format. Physical copies of the financial statements are no longer accepted by the CRO and financial statements must instead be uploaded as a PDF document. This has practical benefits for both the CRO and presenters. Less physical waste of paper is created where the documents are uploaded. By having the process almost wholly electronic, the requirement for costly offsite storage is reduced. Indeed, the whole process can be completed online if ROS signatures are used, ensuring that presenters can file on time and be sure that the document has been properly submitted.

Mandatory electronic filing also applies to the B73, B2 and B10 forms. There are no filing fees for these document types. 2017 saw a substantial increase in the number of submissions filed with the CRO, increasing the accuracy of the register. The number of B10 forms (change in director/secretary information) has continued to rise as the register itself continues to expand.

The introduction of mandatory electronic filing pursuant to S.I. 458 of 2016 was a success with very few difficulties reported by presenters.

Table of Filings

Applications to The High Court/District Court for an Order Extending Time to File

The Companies Act 2014, under section 343(5), allows a company that is late in filing its annual return to make an application to the High Court or the District Court for the district in which the company’s registered office is situated, for an order extending the time to file its annual return for that year. Once an Order is granted by the Court and complied with by the company, the annual return will be treated as being on time and the company will not be required to pay late filing penalties or suffer loss of audit exemption.

Only one application can be made to the District Court in respect of any one financial year and only companies which are currently “live” on the Register of Companies may make an application to the courts under this section – it is not available to dissolved companies.

In 2017, the CRO received 1,067 notices of application from companies to the District Court and 5 notices of application to the High Court.

The CRO issued a total of 1,050 Letters of Acknowledgement/No Objection/Objection and processed 999 Orders granted by the District Court/High Court. Twenty-five applications were refused by the Courts and 38 applications were withdrawn.

Information Unit

There continued to be a high volume of calls received to the Office throughout 2017. Over 65,000 phone calls were answered as well over 12,000 emails. The introduction of mandatory e-filing led to an increase in queries as presenters adjusted to the new procedures.

Provision of information to the public

All statutory information provided by companies to the CRO is available to the public for inspection on payment of a small fee where applicable. Certain vital information, such as company name and registered office address, may be checked free of charge on the CRO website. Over 300,000 documents are purchased from the CRO website each year. Over 2.3m visits were made to the CRO website in 2017.

At the end of 2017, there were 215,020 Irish companies in existence on the register resulting in over 485,000 submissions being filed with the CRO during 2017. This was a substantial increase in the number of submissions filed with the CRO, increasing the accuracy of the register. 78% of all documents were filed electronically. The CRO delivered strongly overall on its mission in 2017, achieving a target by year end of 94.7% of companies being up-to-date in terms of filing of annual returns.

Publications

The CRO undertook a major information campaign focused on mandatory e-filing of annual returns which came into effect on June 1st 2017. An information and advertising campaign aimed at ensuring that the CRO's stakeholders had sufficient notice of the impending changes began at the end of 2016 and intensified in 2017. There was a further short campaign before the peak annual return filing period in October 2017 to remind stakeholders of the new arrangements.

Present Make up of the Register

Electronic Developments in 2017

Digital Certificates:

The CRO launched the roll out of its Digital Certification Strategy on 13th April 2016 with the issue of all Mortgage Certificates as digitally certified documents. In the fourth and final phase of this strategy, the CRO commenced issuing all Certificates of Incorporation for Company Name Changes and Re-Registrations as digitally certified documents on 8th June 2017.

These digitally certified documents replace the paper certificates posted out to presenters. They facilitate immediate receipt of certification by the presenter following registration. They are emailed to customers as PDF documents to the email address entered in the “Company email Address” section of the application form submitted for registration. The PDF document contains a coloured banner at the top of the screen to confirm that it has been digitally signed as certified by the CRO. This provides an assurance to the recipient that the document is authentic, has not been tampered with and has been independently verified as sourced in the CRO. Presenters can provide these digital certificates directly to third parties by email.

IT

The CRO have been working on consolidating and modernising technology. Storage and management options for our systems have been considered with a view to locating our systems in the best possible environment. The CRO continues to procure expert services to support the management of our complex array of IT systems.

Legal Developments

The Companies Accounting Act 2017

This Act, which transposed the 2013 EU Accounting Directive, was commenced on the 9th June 2017. It brought in the concept of the Micro Company, increased the threshold for SM (small and medium) companies, introduced country by country reporting and obliges companies that are registered as unlimited but have de facto limited liability to file financial statements.

The Act also contains a number of provisions arising from the Companies Act 2014, one of which clarifies that those securities that were admitted to trading legally before the commencement of the Companies Act 2014 can continue to be listed. Another provision resolves the anomaly that a company could lose its audit exemption for not annexing financial statements to its first annual return even though it was not required to file financial statements with this return. The definition of an external company branch has been broadened to include undertakings where an unlimited company had members all of whom were themselves limited.

Unregistered Auditors

In 2017, there were no reports of unregistered auditors attempting to file false auditors reports, a reduction from 115 in 2011. This is a testament to the commitment of the CRO to eliminate this abuse and to the effectiveness of the controls put in place to prevent it. In addition the CRO was notified of 16 companies, involving 7 auditors, where the individual auditor or audit firm whose name was on the auditors report, stated that they did not carry out the audit. The mechanism in place allows auditors to alert the CRO of the problem immediately.

3: The Company Lifecycle

Incorporation of a company

A company is a legal form of business organisation. It is a separate legal entity and, therefore, is distinct from those who run it. There are two basic company types, a private company and a public company. The majority of companies registered in Ireland are private companies and, of those, most are small with only one or two members.

The Companies Act 2014 generally allows one or more persons to form a private company for any lawful purpose by subscribing to a constitution. A private company may have a maximum of 149 members and there is no limit on the number of members of a public company.

All company types, with the exception of the Private Company Limited by Shares (LTD), must have one secretary and a minimum of two directors. (Single director LTDs must have a separate secretary). Formal qualifications are not required to be a company director. All company officers have wide responsibilities in law.

In 2017, the number of new companies incorporated was 22,304. This represents an increase of 6.4% over 2016 volumes. New company incorporations have been increasing steadily over the last 5 years and are now 50% higher than in 2012. This is an average of 1,859 new companies registered per month and is the highest number of new company registrations ever in the history of the State.

The CRO has committed to the following customer service targets for registration of new companies under the relevant schemes:-

  • Fé Phrainn Scheme - 10 working days
  • A1 Online Scheme - 5 working days
  • Ordinary Scheme - 15 working days

Despite the increase in the number of companies being incorporated, the CRO continues to meet its customer service targets within existing resources.

Registration of company post-incorporation documentation

Changes in the situation of a company's registered office or changes amongst a company's officers or in their particulars must be notified to the CRO on the relevant statutory form. The form must be properly completed and signed by a current officer of the company per the CRO records in accordance with the Companies Act 2014.

External Companies

The number of external companies on the Register increased by less than 3.5% in 2017. In 2015 the number of non-EEA branches registered increased by over 80% from 2014. In the same year over 2,600 Places of Business were removed from the Register with effect from 1st June on commencement of the Companies Act 2014.

External company branches on register by country:

Annual Returns

A company, whether trading or not, is obliged to deliver an annual return every year to the CRO. An annual return includes details of the company's directors and secretary, its registered office, and details of its shareholders and share capital. It must be signed by a director and by the company secretary. If the secretary is also a director, he/she may not sign in both capacities. Company financial statements are required to be annexed to a company's annual return in most cases.

The function of the postal lodgements section in the CRO is to receive and scan all documents received by post and to make them available to the general public as quickly as possible. Customer service is a high priority and every effort is made to ensure that phone queries are handled in a timely and efficient manner.

There were over 206,000 annual returns received in the CRO in 2017.

Re-Registrations

Under the Companies Act 2014, it is possible to change from any company type to another company type e.g. from limited to unlimited, from private to public or from limited by shares to limited by guarantee or vice versa, subject to the requirements of Part 20 of the Act.

In 2017, a total of 560 companies re-registered, down from the high of 676 in 2016 but 3 times the number of 147 in 2015. The vast increase is in part attributable to the end of the Transition Period following commencement of the Companies Act 2014 and companies changing their status as a result. Despite the huge increase in volume, these re-registration applications were processed within customer service deadlines without any additional resources.

Re-Registrations to different types in 2017

Mortgages and Charges

Nearly 12,000 charges were filed in 2017. Registration of charges has been steadily increasing over the last number of years and the 2017 figure represents an increase of 71% over the 2012 volumes.

Number of mortgages/charges received since 2007:

Liquidations and appointment of Receivers

Up-to-date registers of liquidations, appointment of receivers and examiners were maintained, by registering all documents received within agreed business plan timeframes. The number of liquidations has plateaued although the number of creditors’ liquidations has increased.

There was a slight increase in the number of companies where receivers were appointed from 340 in 2016 to 344 in 2017. The register of disqualified and restricted directors was also maintained, while reports of companies in liquidation continued to issue to ODCE on a regular basis.

ICAVs

The Irish Collective Asset-Management Vehicles Act 2015 (ICAVs) was introduced on 11th March 2015 and the Register of ICAVs is maintained by the Central Bank of Ireland. The Companies Registration Office is required under the legislation to de-register companies who have registered as ICAVs with the Central Bank. Under the de-registration system introduced by the CRO, companies who have registered as ICAVs make application on the statutory form prescribed by the Minister for Business, Enterprise and Innovation for de-registration from the Register. A certificate of de-registration of the company is issued, the Registrar records the de-registration of the company and notice of the removal of the company from the Register is published in the Companies Registration Office Gazette. In 2017, ten companies were de-registered.

Enforcement, prosecution and striking companies off the Register of Companies

A company can be dissolved either through liquidation or strike-off. Strike-off is not always involuntary. A company that ceases to trade and has no outstanding creditors can request the Registrar to strike the company off the register.

A company can be restored to the register following strike-off. Where a company has been struck off the register for a period not exceeding 12 months, an application can be made by the company to the Registrar for restoration. Once the 12 months has elapsed, it is only possible to restore the company via Court Order Restoration.

In 2017 the CRO continued to enforce the Companies Act 2014 against companies in default of their annual return filing obligations by way of involuntary strike-off. To encourage compliance we issue reminder letters to all companies in relation to annual return dates. By end 2017 over 94.7% of companies were up to date with the filing of annual returns.

Company prosecutions were re-started in November 2017 following the end of the transition period and the introduction of mandatory electronic filing. 21 cases were prosecuted by the CRO in the District Court for failing to file their 2016/17 annual returns on time. 4 companies (7 cases) were convicted. 9 companies (14 cases) were adjourned to January 2018. Fines ranged from €600 to €1,200 in all convicted cases.

A total of 557 companies were restored to the register, a marginal increase over the number restored in 2016. Enforcement section discontinued the “fast-track” administrative restoration facility to customers during 2017 as all annual returns must now be completed online.

Voluntary Strike Off

Voluntary Strike off is now a statutory process under the Companies Act 2014. A total of 5,494 companies were struck off voluntarily in 2017, which is an increase of 7% over 2016.

Involuntary Strike Off

The number of companies involuntarily struck off the register in 2017 was 5,420 which represented a significant decrease over strike off levels in 2016. This is, in part, due to the fact that the rate of compliance increased in 2017 with fewer companies failing to file an annual return. 92.6% of all companies filed a return during 2017 (188,906 companies). The number of companies struck off the register due to their failure to file annual returns was high in 2016 due to change in processes initiated by the then new Companies Act 2014 in 2015. The 2017 figure is closer to the average of the past ten years (6,300).

4 - OTHER ENTITIES REGISTERED BY CRO

Business Names

The purpose of the Registration of Business Names Act 1963 is to provide transparency for persons trading under a name other than their own.

The number of new business names registered by the CRO in 2017 was 24,130, a 3.9% decrease on 2016 with 25,103 registered. 90% of new business name applications were filed electronically in 2017.

Registration of a business name does not result in the creation of an entity with separate legal personality. It is obligatory if any individual or partnership (whether composed of individuals or bodies corporate or any combination of both) or body corporate carries on business under a name other than their own true names. Its purpose is to make public the identities of those individual(s), partnerships or corporate bodies being the legal entity behind the business name.

A change in any of the particulars of a registered business name (e.g. change of business name or business address) should be notified to the Registrar within one month of the date of the change.

Limited Partnerships

The Limited Partnership Act 1907 facilitates the creation of a partnership in which some members have limited liability for the debts of the firm. Their liability is limited to the extent of the amount of capital contributed by them to the partnership. As with a general partnership, a limited partnership is not a separate legal entity. 676 Limited Partnerships were registered in 2017 almost 5 times the number registered in 2015 (87).

5:Corporate Function in the CRO

The 2017 expenditure for the CRO was €7.1m. This represents an increase of 6.5% (€0.44m) on 2016. The CRO moved its public office to new premises in May 2017. However, the CRO expenditure is lower than 2007 where the CRO dealt with a smaller volume of submissions and a smaller volume of companies on the register.

Staff reductions from 150 in 2007 to 103 (whole time equivalents) in 2017 have not prevented the CRO from dealing with an increasing number of submissions as both the registers of companies and business names have expanded throughout the last decade. The development of electronic filing has allieviated the problems and the backlog of documents to be registered has been greatly reduced. 545,889 documents stood in the 2007 backlog. This was reduced to 151,646 in 2012 and by the end of 2017 the number of unregistered documents against live companies stood at 77,600.

Year E-filed Documents All submissions Received Companies on Register

Income 2017

The CRO received €17.48m in 2017, which represents a decrease of 13% on the 2016 figure of €20.1m. The decrease in income received by the CRO in 2017 can be attributed to a reduction in late filing penalties paid and the introduction of mandatory electronic filing. The cost of filing an annual return electronically is €20, while the cost for a manual filing was €40. Paper copies of forms B2, B73 and B10 had filing fees of €15, the electronic versions (which are now mandatory) being free.

If the 2016 figures were replicated, the difference in fees would have been €480,000 for the form B1, €40,000 for the form B2, €22,000 for the form B73 and €200,000 for the form B10, resulting in an overall saving to presenters of €742,000 as a result of the move to electronic filing.

E-Day

The CRO is committed to facilitating and implementing more payments by electronic means, over the traditional methods of cash and cheque payments. Since the introduction of mandatory e-filing of the annual return (Form B1) and the accompanying financial statements in June 2017, filing fees and any late filing fees must be paid for by credit/debit card or by customer account.

The number of cheques received in the CRO reduced from 106,779 in 2016 (value €12.9m) to 66,116 in 2017 (value €8.6m). The CRO is currently reviewing alternative payment methods for customers who have traditionally paid by cheque.

Overview of Energy Usage in 2017

The CRO is located in Bloom House, Gloucester Place Lower, Dublin 1 and O’Brien Road, Carlow.

The CRO was previously the minor energy user of Parnell House (45%) and shared the building along with a canteen, 3 meeting rooms, toilets and the reception area with The Registry of Friendly Societies (RFS) and The Competition and Consumer Protection Commission (CCPC). The CRO Carlow is the minor energy user of O’Brien Road (45%) and shares the building with The Workplace Relations Commission while also sharing canteen facilities, toilets and the reception area.

Parnell House held a D2 energy rating, while O'Brien Road, Carlow has a D1 rating. Bloom House has an Building Energy Rating of B3. BER No: 800191413. Energy Performance Indicator: 77.12kg CO2/m2/yr 1.

Actions Undertaken in 2017

  • Energy Saving related emails to staff reminding everyone to turn off PC monitors, printers etc. each evening (both locations).
  • Monthly ‘No-Lift Days’ (Parnell House).
  • Out of Hours Energy Audits (Parnell House).
  • Air Handling Unit operating hours monitored continuously (Parnell House/Bloom House).
  • Heating timers regularly programmed in line with current weather conditions (both locations).
6 - COMING IN 2018

The Fourth Anti-Money Laundering Directive and Beneficial Ownership

Statutory Instrument No. 560 of 2016 signed by the Minister for Finance and dated 15th November 2016 requires companies and industrial and provident societies to obtain and hold information in respect of their beneficial owners.

Article 30 of this Directive provides for a register of beneficial owners of companies and other types of corporate entities. It is anticipated that the Companies Registration Office will operate the register of Beneficial Owners for the affected entities registered by the CRO and the Registry of Friendly Societies, i.e. companies and industrial and provident societies, from a date early in 2018.

Companies (Accounting) Act 2017

2018 will also see the introduction of the requirement for Investment Companies and UCITS to file financial statements with the CRO under the Companies (Accounting) Act 2017.

Part 26 of the amended 2014 Act obliges large companies, large groups and “public interest entities” that are active in the mining and extractive industries or the logging of primary forests to prepare and file annual reports on payments made to governments with the Companies Registration Office.

The definition of an external company has been amended by the Companies (Accounting) Act 2017, requiring certain unlimited companies to register a branch with the CRO. External unlimited companies whose shareholders themselves have limited liability must register from June 2018.

Redevelopment of IT resources

The CRO has undertaken a project to redevelop the CRO databases which house both the register of companies and business names. A full refresh is required to update an ageing system. It is expected that this project will be completed by Quarter 2 2019.

Progress has also been made to assimilate the registers of limited partnerships, friendly societies, industrial and provident societies and trade unions into the new electronic system which should conclude by Quarter 3 2018.

APPENDIX 1: DETAILED STATISTICS

DETAILED STATISTICS

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