One of the services offered by Companies House helps combat fraud and protect your company from unauthorised changes to records. The free service is known as the protected online filing (PROOF) scheme and means that any forms covered by PROOF can only be filed online. Companies House will reject any paper versions of the forms and send them back to the registered office address.
The use of the PROOF scheme prevents the filing of certain paper forms, including:
- changes to your registered office address
- changes to your officers (appointments, resignations or personal details)
- your annual return
This can help combat fraudsters who try to hijack a company by changing the names of company directors and the registered address of the company. Once this has been done, the company becomes vulnerable to further fraud such as banks accounts being opened in the name of the ‘new’ directors. Companies House deals with around 50 to 100 cases of corporate identity theft every month.
An application to join the PROOF scheme should be made online using the Companies House online filing service.
There are special rules in place which limit the ability to change a company’s year end date. A company’s year-end date is also known as its ‘accounting reference date’ and is historically set by reference to the date the company was incorporated. Under certain circumstances it is possible to make a change to the year end.
As a rule, you can only change the year end for the current financial year or the one immediately before it. Making a change to a year-end date will also change the deadline for filing accounts (except if during a new company’s first financial year).
There is no limit to the number of times you can shorten a year-end date, but you can only extend the period to a maximum of 18 months once in every five years. The financial year can be extended more often under limited circumstances, for example, if the company has been placed in administration.
A request for a change to an accounting reference date can be made online using the Companies House online service or by using a postal version of the Change your company accounting reference date (AA01) form. No change can be made to a period for which accounts are overdue.
There is no overriding reason for using one date over another but there are several factors to consider. The most common year-end dates are 31 December (to coincide with the end of the calendar year) or 31 March (to coincide with the end of the tax year).
Companies House has announced that they have once again temporarily paused the voluntary and compulsory strike off processes. The hiatus is set to be in place for one month from 21 January until 21 February 2021. When a company is struck off, the company's legal existence is removed from the Companies House register. The strike off can be voluntary or compulsory.
Companies House will continue to publish first Gazette notices for voluntary strike off applications to minimise the impact on those who have applied to close their company – but will not be publishing the second Gazette notice and striking companies off during this period. For companies on the compulsory strike off path, Companies House will not be publishing first and second Gazette notices.
Companies House have said that pausing the strike off processes will provide companies with more time to update their records and help them avoid being struck off the register. It’ll also protect creditors and other interested parties who might have had difficulties in receiving notices or registering an objection, or whose objections have not yet been processed.
There are a limited range of circumstances when a company can request to be removed from the register (known as being struck off). For example, a voluntary strike off can be requested by a dormant or non-trading company.
A limited company can be closed down by getting it 'struck off' the Companies Register, but only if it:
- hasn't traded or sold off any stock in the last 3 months. For example, a company in business to sell apples could not continue selling apples during that 3 month period but it could sell the truck it once used to deliver the apples or the warehouse where they were stored.
- hasn't changed names in the last 3 months
- isn't threatened with liquidation
- has no agreements with creditors, e.g. a Company Voluntary Arrangement (CVA)
If the company does not meet these conditions, then the company will need to be liquidated (also known as a 'winding up').
Before applying for a strike off, the company must be legally closed down. This involves:
- announcing plans to interested parties and HMRC
- making sure employees are treated according to the rules
- dealing with business assets and accounts.
The Intellectual Property Office (IPO) is the official UK government body responsible for intellectual property (IP) rights including patents, designs, trademarks and copyright.
The IPO has launched a new service that allows users to search for the goods and services they intend to use their trade mark on before they apply.
Intellectual Property Offices worldwide use a trade mark classification system that groups together similar goods or services into 45 different classes. This is referred to as the Nice Classification.
While a member state of the EU, the IPO contributed to and shared a common classification system called TMClass. TMClass is a classification search tool provided by the EUIPO. With the transition period relating to the UK’s exit from the EU ending on 31 December 2020, a new UK specific database was required.
The search UK trade mark classes service is available from the GOV.UK website.
The government has unveiled three new consultations to help combat fraud by reforming the UK’s register of company information. This follows an announcement earlier this year that Companies House will be reformed to clamp-down on fraud and money laundering, with directors unable to be appointed until their identity has been verified.
One of the consultations will seek views on how the new discretionary power for the registrar to query new, submitted information will work in practice. The proposals will help close loopholes that lead to abuse of the register, facilitating a crack down on the misuse of corporate structures by criminals.
The 3 consultations are as follows:
- Improving the quality and value of financial information on the UK companies register. This consultation will examine how companies might be able to file accounts once only with government, instead of separately to Companies House, HMRC and other agencies. It will also look at other areas including the filing options available to small companies and digital filings.
- Powers of the registrar. This consultation will examine the new discretionary power for the register to query information on a risk-based approach. The proposals will help close loopholes that lead to abuse of the register, facilitating a crackdown on the misuse of corporate structures by criminals.
- Implementing the ban on corporate directors. Finally, this consultation will look at tackling opaque corporate structures. This would mean that corporate directors would be prohibited unless their own boards comprise all natural persons, and those natural persons have their identities verified.
In today’s precarious business environment many companies are unable to pay their debts. If this happens, your creditors can ultimately apply to the court to get their debts paid. This can be done either by getting a court judgement or making an official request for payment (known as a statutory demand).
If a court judgement has been registered against your business, you must usually respond with one of these options within 14 days:
- Pay off the debt.
- Reach an agreement with the creditor to pay the debt in the future, for example by using a Company Voluntary Arrangement. This is a voluntary agreement to pay your business creditors over a fixed period of time.
- Put your company into administration. This means you will be protected from legal action and nobody can apply to wind up your company during administration.
- Apply to liquidate (‘wind up’) your company.
- Challenge the court judgment. You can ask the court to cancel the county court judgment (CCJ) or high court judgment if you did not receive, or did not respond to, the original claim from the court saying you owed the money.
If you do nothing, the creditors can request to have your assets taken away by bailiffs or the sheriff. Your creditors can also apply to wind up your company if your assets are not enough to pay your debts.
There are similar measures that must be taken if you receive a statutory demand, albeit with a slightly longer period of 21 days to respond.
These are serious issues and proper professional advice should be taken if your company is insolvent.
As well as filing accounts with Companies House, there is an important requirement to check that the information Companies House has about your company is correct. This is facilitated by the filing of an annual company confirmation statement. The confirmation statement was introduced in June 2016 and replaced the annual return. You could be subject to a fine of up to £5,000 for failing to send a confirmation statement. Companies House can also prosecute a company and its officers for failing to file a confirmation statement and the company can be struck off.
A confirmation statement is usually filed at Companies House once every 12 months and rather than resubmitting data every year the confirmation statement only needs to be updated if you have changes to report. If there are no changes then you just need to confirm the information is correct and submit the statement. The due date is usually a year after either the date your company incorporated or the date you filed your last annual return or confirmation statement. You can file your confirmation statement up to 14 days after the due date.
The following details need to be checked:
- the details of your registered office, directors, secretary and the address where you keep your records
- your statement of capital and shareholder information if your company has shares
- your SIC code (the number that identifies what your company does)
- your register of 'people with significant control' (PSC)
Any necessary updates to the statement of capital, shareholder information and SIC codes can be made when submitting the confirmation statement. However, the confirmation statement cannot be used to report changes to your company’s officers, the registered office address, the address where you keep your records, people with significant control. These changes must be filed separately with Companies House and this should be done at the same time or prior to submitting the confirmation statement. The confirmation statement can be filed online (at a cost of £13) or by post (at a cost of £40).
A recent investigation by the Insolvency Service has seen a husband and wife disqualified from being directors for a total of 17 years. The husband and wife team were directors of a company that provided conference and event organisation services across the UK.
The male director had resigned as a director of the company in November 2014 after he was disqualified for 6 years. However, investigators discovered that the banned director had continued running the company behind the scenes in breach of his disqualification and his wife was fully aware of the misconduct. The company was eventually wound up in October 2018.
The disqualification means that the directors cannot be involved, directly or indirectly, in the formation, promotion or management of a company without permission of the court for 11 and 6 years, respectively.
Commenting on the case the Chief Investigator for the Insolvency Service said:
'The length of this ban for the director and the disqualification of his wife, demonstrates that we will tackle those who try to get around their bans by appointing their spouse as director, while continuing to run the business themselves behind the scenes.’
There are a number of reasons why you may decide to close your limited company. This could be because a limited company structure no longer suits your needs, your business is no longer active, or the company is insolvent. You will usually need the agreement of all the company’s directors and shareholders to close down the company.
The method for closing down a limited company depends on whether it is solvent or insolvent. If the company is solvent, you can apply to get the company struck off the Register of Companies or start a members’ voluntary liquidation. The former method is usually the cheaper option.
It is the responsibility of the company directors to ensure that all of a company’s assets and liabilities are dealt with before it is dissolved. For example, you have settled any outstanding bills and collected all debts owed to the business. Any assets or rights (but not liabilities) remaining in the company at the date of dissolution can pass to the Crown as ownerless property.
Where a company is insolvent, the creditors’ voluntary liquidation process must be used. There are also special rules where the company has no director, for example if the sole director has died.
A company can also elect to become dormant. A company can stay dormant indefinitely, however there are costs associated with this option. This might be done if for example a company is restructuring its operations or wants to keep hold of a company name, brand or trademark. The costs of restarting a dormant company are typically less than starting from scratch again.