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Dramatic fall-off in CRO activity stokes deal fears

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A MAJOR fall-off in the number of documents filed and registered at the Companies Registration Office (CRO) since Covid-19 restrictions came into force is having a significant impact on business deals.

Registration of documents for April was 60pc down on the same month last year, while filings received were down by 81pc, according to data compiled by courts and company data provider Courtsdesk.

The CRO's public office closed in March and, while it has been accepting filings by post and email, backlogs have arisen in dealing with them.

Lawyers say the delays have implications for business transactions as clients cannot rely on searches given registrations may not have been processed.

In a letter to the Registrar of Companies last week, Law Society president Michele O'Boyle said the situation poses an unacceptable risk for buyers and investors looking to close business deals.

Data shows there were just 19,396 registrations in April, compared with 50,018 in the same month last year.

The number of filings received last month was just 11,582, down from 64,050 in April last year.

"Delays in the CRO processing documents filed by companies are to be expected in the current situation, but until the backlog is resolved there is a real issue around risk assessment when it comes to doing deals or signing contracts," said Courtsdesk CEO Enda Leahy.

He said a company may appear to be performing well when in fact some critical documents, for example relating to insolvency or changes of ownership, were still sitting in an in-tray and not visible to people searching the CRO's database.

"The figures show that this could be as much as three-quarters of all documents submitted. Some of this may be caused by companies not submitting documents on time, but the CRO has itself said that processing delays are happening," he said.

In a statement, the Department of Business said liquidation, receivership and examinership filings were up to date as of May 8, but a delay in processing annual returns was in the process of being addressed.

Irish Independent