Many people don’t realise that when they create a limited company they are taking on a range of duties which have to be completed every year. Many more people fail to realise that the penalty for not meeting these requirements is prosecution.
On forming a company many of the documents needed are not supplied by Companies House. The statutory registers and directors service contracts have to be sourced elsewhere. Once the company is established its annual accounts and annual returns have to be filed every year. This counts for businesses which are not trading as well as those that are. So even if your business fizzles out you cannot simply put it behind you and move on with your life. Unless you formally dissolve the company you are still responsible for filing documents every year. Failure to do so can lead to prosecution.
A lot of people do not take this threat seriously. After all they are not committing a violent crime or hurting anyone. They are just letting the paperwork for a non-existent business go out of date. Unfortunately for them Companies House does take this seriously. According to the Companies House Website:
Our computer system automatically identifies companies that fail to deliver their accounts or annual returns on time.
They do say that their aim is to get the documents which are overdue rather than to prosecute. However they then go onto say that:
All companies, large and small, have a responsibility to file accounts and annual returns on time. Similarly, non-executive / sleeping directors are just as responsible as the ‘main’ director(s).
The message from Companies House is fairly clear. Although you may get away with not filing your accounts for a short period of time they can easily find out what you are up to. If they do decide to prosecute your company then it may not only be you that gets a trip to court. If your husband, wife or children have been made directors of your company then they are all liable for prosecution as well.
If your company accounts are overdue, or if you want to shut down a company you are not using then our accountancy team can help you ought. Get in touch to discuss what we can do to help you.
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