A more hardline approach will be taken with companies that fail to comply with their basic statutory obligations to file accurate annual returns with the Companies Registration Office (CRO), according to the Minister for Science, Technology and Commerce, Mr Smith.
If a significant improvement in compliance is not achieved within 12 months, he will "encourage a more active enforcement policy by the Companies Registration Office", he warned.
Companies that fail to comply will be brought to court and could have their limited liability status withdrawn, Mr Smith said when he launched the Companies Report for 1996.
He noted "the poor compliance" by companies with their basic statutory obligations such as the requirement to file annual accounts. Of the 112,668 returns due from companies in 1996, only 38,632 or 34.3 per cent were received. In addition, the accuracy of returns to the CRO was "a cause for concern".
Announcing that at 16,112, up from 15,979 in 1995, the number of new companies incorporated in 1996 was the highest ever, he urged all those in business and in the professions to meet their legal obligations.
"Otherwise, the quality of information available to the corporate sector in general is reduced. If a voluntary improvement is not achieved, then it is inevitable that the new staffing and information technology resources (of the CRO) will be deployed to bring substantial numbers of non-compliant companies before the courts and if appropriate, to withdraw the privilege of limited liability granted by the Companies Acts."
Under the Companies Acts, a range of up-to-date, accurate information must be included in companies annual returns to the CRO. Information required includes particulars about the company secretary, directors and shadow directors and details of charges and mortgages.
The Companies Report for 1996 shows that the number of companies on the register increased by 5,740 to 152,798. Private limited companies accounted for 90.9 per cent of all companies registered at the end of the year. Some 309 single-member companies were registered last year.
The number of companies dissolved fell by 30 per cent to 10,280. Applications by creditors for the winding up of companies rose by 11 per cent to 552, while the total number of liquidations were 5.3 per cent higher at 818. No new formal investigations were instigated by the CRO in 1996.
Some 22 companies were granted exemptions from showing particulars of directors. Some 30 company directors were restricted in 1996, down from 57, while one, Mr Thomas O'Doherty of Kingswell, Tipperary, Co Tipperary, was disqualified from acting as a director for five years. Eighteen company directors were convicted for failure to file annual returns.
The CRO received four notifications from auditors that companies had failed to keep proper books of account. The companies were: Cliara Development Company of Breaffy Road, Castlebar, Co Mayo, Irish Pallet and Timber Company of Holyhill Castlebar, F.T.P. of Main Street Charleville, Co Cork, and Automated Security Products of Annaville House, Newtown, Co Waterford.
During the year steps were taken to improve the operation of the Companies Registration Office. New and more customer friendly premises were acquired in Parnell Square in Dublin, additional staffing was approved to bring employment to 120 people and new information technology systems were commissioned. The report notes that in recent years the CRO has not had the resources to keep pace with its increased workload, resulting in a backlog of documents for registration.
On September 15th, the CRO announced a revised fees structure - each new fee will reflect the cost of the service provided. The move is aimed at making the CRO self-financing. CRO generated a total income of £7.5 million in 1996, up from £7.3 million.
