Earlier this year, Companies House brought its first conviction against an individual for making false filings on the public register.
In 2013, Kevin Brewer informed Companies House that the Business Secretary, Vince Cable MP, was the shareholder and director of John Vincent Cable Services Ltd (a company he had incorporated) without Mr Cable’s knowledge. In 2016, again without their knowledge, he registered James Cleverly MP and Baroness Neville-Rolfe (the Minister with responsibility for Companies House) as directors and shareholders of Cleverly Clogs Ltd. Brewer’s reasoning for this was to highlight what he perceived to be flaws in the Companies House incorporation procedure.
Brewer pleaded guilty to filing false information at Companies House in March 2018 and was ordered to pay £1,602 in fines and over £10,400 in legal costs. Companies House filings act as a vital tool of legal and financial information and provide a public forum for anyone to scrutinise a business. However, the information on the public register is only as good as what Companies House receives, which can lead to erroneous filings. Grant Usher explains the benefits of ensuring your business gets its filings right and the consequences of getting them wrong.
Why should I ensure the filings at Companies House are correct?
Correct filings demonstrate good corporate governance on behalf of the company and shows that the business is on top of its affairs more generally. In the event of a company sale, the publically accessible information on Companies House will form an important part of the due diligence process. Typically, a buyer will ask the seller to warrant the accuracy of the information submitted to Companies House.
There are additional benefits when companies sign up for the Companies House Web Filing system. Web Filing offers a faster, more efficient and in some cases, cheaper way of submitting Companies House filings online. Submissions can be made in a few clicks which reduces the risk of late filings which could then lead to Companies House sanctions.
Companies House deals with around 50 to 100 cases of corporate identity theft every month. To minimise this risk, there is also an option to sign up to PROOF, a free service which means filings can only be made electronically via Web Filing.
What happens if a filing at Companies House is incorrect?
You may be able to submit a form RP04 in order to correct factual errors but the original filing will still remain on the public register. Note that form RP04 cannot be used for all incorrect filings.
You could apply to court for an order for the incorrect filing to be removed from the public register. The court will consider if the filing is factually inaccurate, was made without the authority of the company, or has been forged. Whilst errors can sometimes be innocent mistakes, occasionally those filings can result in penalties being issued by Companies House and, in extreme cases, criminal prosecution. The Companies Act 2006 makes it a criminal offence for a person to ‘knowingly or recklessly deliver’ a document that is ‘misleading, false or deceptive’. The maximum sentence is up to two years in prison, a fine, or both.
How can Verisona Law help me and my business?
The Corporate & Commercial team at Verisona Law can assist with your company secretarial requirements by:
- Providing general company secretarial assistance, including preparing and filing your business’ annual confirmation statement (previously annual return)
- Preparing, and keeping up-to-date, your business’ public register at Companies House including share transfers and appointment/resignation of directors
- Preparing, filing and keeping up-to-date your PSC registers at Companies House, saving your business time, money and resource
- Providing training to company secretaries and directors with regards to all company secretarial requirements
- Sale and purchase of business, asset and shares
- Business start-ups and SME’s
- Management Buy-Outs (MBO’s) and Buy-Ins (MBI)
- Share buy backs
- Due diligence
- Company re-organisation and re-structuring advice
- Shareholders’ and partnership agreements
- LLP and Partnership advice
- Shareholder disputes
- Drafting inter-creditor, facility, guarantee and other security agreements
- Subordination and priority arrangements
- Advice on personal and corporate guarantees
- Joint ventures and collaboration agreements
- Terms and conditions of sale or purchase for goods/services
- Agency and distribution agreements
- Non-disclosure agreements (NDA)
- Bespoke trading agreements
- Intellectual property protection
- Incorporation of limited liability partnerships and companies
- Creating and/or maintaining statutory registers, minute books and share certificates
- Preparing board minutes, resolutions and notices
- Assisting with your confirmation statement
- Drafting or amending Articles of Association
- Dissolving or striking companies off the register
- Implementing changes to your share capital
- Drafting and filing of Companies House forms.
“The (Corporate and Commercial) team did Verisona Law proud. I really appreciate all your assistance throughout the transaction.”
Director of a Groundworks and civil engineering business, June 2018
“I would just like to say a very big thank you to you for all of your amazing hard work and patience during the course of the sale. Myself and the family very much appreciate it.”
Exiting shareholder of an IT company, July 2018
“Thank you for all your work in dealing with the acquisition, your advice has been really helpful.”
Seller of a healthcare business, January 2019