Despite the legislative change in July 2025, which introduced new rules limiting the loss of audit exemption for small, micro or dormant Irish companies, Irish companies are continuing to make District Court applications under section 343 of the Companies Act 2014 in significant numbers. 

Audit Exemption: What Changed in 2025?

Under the previous rules, one late annual return was enough to cause a company to lose its audit exemption for two financial years.

However, the newly enacted provisions introduced a more lenient approach in respect to annual returns.  Under the revised  legislation:

  • Small, micro or dormant Irish companies now only lose their audit exemption where they fail to file an annual return for a second or subsequent time within a period of five consecutive years.
  • This replaced the previous rule where a single late filing automatically resulted in the loss of audit exemption for two years.

More information on these changes are available in our previous article here.

What Is a Section 343 District Court Application?

Where an Irish company is late filing its Annual Return and accompanying Financial Statements, an application can be made to the District Court for an extension of their time to file the late annual return(s).

If the application is successful and the company files the outstanding return(s) within the timeframe stipulated by the Court Order, (usually 28 days) the returns are deemed to be filed ‘on time’ with no late filing penalties and no loss of audit exemption.

Why Are Companies Still Applying to the District Court?

Whilst last July’s legislative change was a welcome update and helps to ease the compliance burden on small companies and avoid significant audit costs, there are still circumstances where an application to the District Court makes sense. Some examples are as follows:

 

Multiple Late Returns:

 

 The changes to the automatic loss of audit exemption can be availed of if a company has only one annual return outstanding. If there is more than one annual return that is late, they will lose audit exemption under the new rules when that second late annual return is filed.

 

Audit Exemption Category:

 

 The rule changes only apply to small, micro or dormant companies. They do not extend to small or micro groups availing of group audit exemptions.

As such, if a company within a small or micro group structure files a late annual return, it will continue to be the case that all companies within the group will lose their audit exemption for the following two financial years;

Late Penalties:

A late annual return is still subject to late filing penalties and the late filing will also stay on the public record for a company.

Many directors are increasingly mindful of how their compliance history looks to banks, investors, regulators and business partners. For them, a District Court Application is often seen as an investment in good corporate citizenship.

Impact on Future Filings:

 They also want to protect against the possibility of the company finding itself in a similar position within a 5 year period – something that then would lead to an automatic loss of their audit exemption for two years.

 

CRO Enforcement

With the hiatus on Involuntary Strike Off’s now well and truly over, the Companies Registration Office (CRO) are visibly ramping up enforcement. Their stated intention is to have started the process of striking off ALL non-compliant companies by the end of the year.

In March alone, around 200 companies a week were being targeted and this figure is expected to be increased significantly in the coming months.

Many of these companies will have multiple annual return outstanding and as such the new rules will not be of any benefit to them. For them, the District Court option will continue to not only be relevant but will also be the sole option open to them to avoid a loss of audit exemption.

Further Information

For more detail on how the s343 District Court application process works, including timelines and what’s involved, you can download our factsheet below. Alternatively,  feel free to contact us HERE or give us a call on 01 664 1177.

Disclaimer:  This article  is for general informational purposes only. All content is provided in good faith; however, we make no representation or warranty of any kind regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information. All or any information is subject to change. This post does not constitute legal, financial, or professional advice. Always seek the advice of a qualified professional or legal advisor with any questions you may have. CFI are not liable for any loss or damage arising from your use of the information contained in this Article.

For More Information:

Company Formations

Company Secretarial

Annual Returns

Register of Beneficial Owners