Tag Archives: Companies House

Reporting Fraudulent Use of Address to Register a Company

address used to register limited companyAlthough it is fairly rare we occasionally get phone calls and emails from people who have discovered that a company has been registered to their home address without their knowledge. Normally they find out when letters start arriving at their house addressed to a business or people they have never heard of.

Limited companies formed in the UK normally have to be registered to a UK address. This can be pretty much any residential or business address as long as it is in the correct bit of the UK (Scottish companies need a Scottish address, English & Welsh companies need an address in England & Wales). One of the main foundations of limited companies in the UK is that they are very transparent. Therefore this address, known as the registered office address, is made public on the Companies House website so that anyone who wants to can easily track the company down. Limited companies should also hold a copy of their accounts and other documents at the registered office address so that they can be inspected. It is also this address that Companies House and HMRC will use to communicate with the business.

While many of the cases where a business appears to have been registered to the wrong address may be simple mistakes there is an obvious benefit to fraudsters to try and disguise where they are based. Using an innocent person’s address to register a company which is going to be used for some kind of unsavoury activity will make it harder for the individuals involved to be tracked down. Part of the reason people are able to register companies at an address they have no link to is that Companies House do not do any detailed checks on the address when the company is registered. As long as the address given meets the basic criteria they will normally not look any further.

If you have received letters to your address for a company you have not created then you can report it direct to Companies House. They are the official registrars of UK Companies and it is them who the address will ultimately have been registered with. They have advice on their website about how to report potentially fraudulent use of your address.

The Most Popular Months for Company Formations

January is traditionally quite a busy month for company formation agents. Lots of people make a New Year’s Resolution to finally start that company they have been talking about for years. We therefore expect to have a bit of a rush of new Companies being formed in the New Year.

When we took a look at the figures from Companies House, though, we found that although January is a busy month for company formations it is by no means the busiest of the year.

Company Formations by Month

Number of new Company Formations per month using figures from Companies House

So far in 2012 February has been the busiest month for company formations while in 2011 it was March. There being lots of company formations in March makes sense and matches our own experience. As the end of the financial year is the beginning of April we get a lot of Sole Traders who get told to form a company by their accountant. February also makes sense as people who vowed to start a new company for their New Year’s resolution meet those who are forming a limited company in preparation for the end of the tax year.

The months that surprised us more were October and November. We know there is always a dip in the summer but October 2012 seems to have been particularly high. This may well be down to parents starting a new business once the kids are back at school or it could be people getting ready to launch their business in the New Year but there doesn’t seem to be a single obvious reason. If you have any ideas why the numbers for the formation of companies spikes in the Autumn let us know in the comments below.

Top 5 Reasons Why Company Accounts are Rejected

Company Annual Accounts rejectedCompanies House have released figures showing that they now reject 11.1% of company accounts. Using the Companies House statistics for July 2012 that means over 300,000 companies have had their accounts rejected so far this year. If acceptable accounts are not received on time then Companies House will automatically levy late filing penalties. This could, therefore, be a costly process for these companies.

Companies House have now published the most common reasons why they reject company annual accounts. The top 5 are:

1)      Incorrect Statements to the Accounts – All company accounts have to have the correct wording on them. The exact wording depends on the age of the company and its size. If the wording is not correct the accounts can be rejected. 33,349 companies got their statements wrong last year.

2)      Duplicate Made up Date – The ‘made up date’ is the end of the accounting period that the annual accounts cover. This is normally the anniversary of when the company was formed. 17,329 companies had their accounts rejected for duplicating this date. This normally happens because they have re-used the previous year’s accounts and have forgotten to change the date.

3)      Signatory Name Missing off Balance Sheet – A company director has to sign the company balance sheet before the accounts are submitted. 12,106 companies forgot to do this.

4)      Audit exemptions statements missing or incorrect – Under the 2006 companies act small businesses can claim exemption from having their accounts audited. 10,277 companies failed to get the wording of their exemption correct or missed it entirely.

5)      Made up Date Missing or Incorrect – Whereas 17,329 companies managed to duplicate the made up date on their accounts, 10,026 companies managed to either miss it off all together or get it wrong.

Filing of company accounts is required for all limited companies whether they are trading or not. This has to be done every year and can be a considerable strain on resources for small businesses. Getting these accounts wrong and having to do them again is the last thing you need, especially as it opens you up to late filing penalties and a criminal prosecution.

Whilst the company directors are ultimately responsible for filing the accounts correctly you can offset some of the risk by getting a qualified accountant to create the accounts for you. An experienced accountant should be able to avoid the most common mistakes listed above and, if they don’t, should absorb any fines.

The Company Warehouse offer a range of accounting services including the preparation and filing of annual accounts starting from £14.99 per month.

Getting Away with it: Will Companies House Notice if You Fail to File Documents?

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.

How do you dissolve a company?

It is an unfortunate fact of life that about 1 in 3 new businesses fail in their first couple of years. This is part of the risk of starting your own business. It is something that you can learn from so that you don’t have the same problems with your next business.

One business failing needn’t mean that you will personally go bankrupt. Nor does it have to mean that everything ends in disaster. When handled properly the end of a business can be a relatively painless affair.

The worst case scenario is a compulsory liquidation. This normally happens when one of your suppliers believes that you cannot pay your debts. They can use the courts to force your company into liquidation. An official liquidator will be appointed and they will sell of everything the company owns in order to pay everyone off. It is a very public process and one over which the company’s directors and shareholders have little control.

Of course you do not have to wait until you are forced into liquidation. If you have a lot of debt but believe that the company is still viable and can be turned around then you may be able to enter into a Company Voluntary Arrangement. If you want to close the business down and you believe that you can pay off your debts within 12 months then you can enter into a Members’ Voluntary Liquidation (MVL). If you have realised that your company is insolvent and you want to close it down then you can enter into a Creditors’ Voluntary Liquidation (CVL).

These options will all involve you publically declaring that your company cannot pay its debts and may involve having to hire liquidators or accountants who can quickly build up fees equal to any assets the company may have had.

If you would to prefer to handle things quietly and without too much outside involvement then there is another option. If you can clear your company’s debts, stop trading for 3 months and are not subject to any legal proceedings then you can have your company dissolved. The process is pretty simple, does not require any court action, liquidators or public declaration. All that you need to do instead is fill out a form and send it to Companies House with a payment for £10.

Whatever state your company is in, taking control of the process and being pro-active about the situation will make the end of your business much less painful. If you can avoid going down the compulsory liquidation route then it is perfectly possible to stay on good terms with your suppliers and customers. To settle your debts and walk away with your reputation intact.

What is a limited company?

Depending on whose figures you believe there are anywhere between 1.3 and 2.5 million limited companies in the UK. This makes Limited Companies one of the most common ways to run a business. In fact there are several forms of limited companies. These include Public Limited Companies (PLCs) and Companies Limited by Guarantee. The most common type though, and what most people mean when they talk about Limited Companies, is a Private Company Limited by Shares (or a Ltd. Company).

For the rest of this article we will deal with standard Private Companies Limited by Shares (Ltd. Companies). They have a few key features

Limited by shares

A limited company is called a limited company because it offers limited liability. What this means is, when the company starts up the investors buy shares in it. If the company goes bust the shareholders are only liable for (only have to pay) the value of their shares. They do not have to pay all of the company’s debts.

Separate legal entity

When you set up a limited company you are setting up a ‘separate legal entity’. It is like giving birth to a new person. The Company has the ability to take on contracts and debts rather than this having to be done by the people involved. If anything goes wrong with these contracts or debts it is the company that gets in trouble not the people. It is the company which becomes legally liable, not the people who own or work for it (Unless the people have been deliberately and seriously naughty, in which case their limited liability gets waived)


Public Limited Companies are ones whose shares are traded on the stock exchange. Anyone who wants to can buy them, they are publically available. Private Limited Company Shares, by contrast, are not available for public sale. As the name suggest they can only be sold privately.

Shareholders and Directors

Limited companies are owned by their shareholders (sometimes known as members). They are run by their directors. At least that is the simple version. It is possible to have a limited company where one person is the sole director and sole shareholder. Similarly in larger companies the directors may appoint managers to do the actual running of the company. However it is the directors who have the legal responsibilities.

Publically Searchable

In order to be a limited company you have to file a set of independently audited accounts with Companies House. These are available, along with the names and addresses of the directors, for anyone to view whenever they like. So if someone is going to do business with you they can check out your financial status. It lets people know if your company is in trouble and who owns and runs it.


The rules of a limited company are its Articles of Association. These can, within reason, be written any way you like. They determine things like who gets a say in company decisions, who can buy and sell shares and what the company does with its profits.

Is a limited company right for me?

Limited companies do come with a certain amount of paperwork and expense attached, filing annual audited accounts being the main one. However the protection they offer individuals from debts and legal action can be worth it. Directors of limited companies can also pay a lot less tax than people using business structures such as sole traders and partnerships. Ultimately it will be a case of seeing whether these benefits are worth the effort for you.

If you do want to start up a limited company then you can take advantage of our free company formation service by opening a bank account with our high street banking partners.

What is a Dormant Company?

Company Annual Returns and Annual AccountsFigures from Companies House show that about 18.5% of companies in Great Britain do not do any business all year. These are classed as Dormant Companies. A dormant company is defined as having no ‘significant accounting transactions’ during a financial year.

Even though a company may have done no business during the year it still needs to submit accounts to Companies House. Doing nothing can lead to your company being automatically dissolved, fines and potential prosecutions. If a company is doing no business then an alternative to dissolving it is to declare it dormant. Dormant companies still need to file annual accounts but these can be much simpler than for a trading company as they just need to contain a profit and loss sheet and a copy of the previous year’s accounts for comparison. Importantly there is no need for a dormant company to have their accounts audited. This makes it a lot cheaper to prepare the accounts than for a company that actually has some cash flow.

There are a number of reasons why people may want to operate a dormant company. Many people set up their limited company when they first get the idea for their business. For a variety of reasons it often takes people a while to actually get the business off the ground and trading. Similarly some people might have an idea for a future project and want to get their company registered so that everything is ready to go once the project comes together.  Likewise people will sometimes register a company name in order to stop anyone else from getting it or to protect themselves from copycat companies. The small costs and amount of paperwork involved can be a lot more convenient than a potential court case. In many cases dormant companies are used to hold a piece of intellectual or physical property. If no changes are made to this property then the company will not be trading and it can be maintained in a dormant status.

Whatever the reason for having a dormant company it is important to keep make sure the process is done properly. A declaration has to be sent to Companies House citing sections 480 and 476 of the Companies Act to declare exemption from auditing. As well as this an AA02 form has to be submitted. If you are thinking of making your company dormant and need any help with the process get in touch with us.

A Company is for Life not Just for Christmas

Annual Accounts and ReturnsAs we discussed in our last blog post, the requirements around a limited company do not end once the company has been formed. As well as having the company’s statutory registers it is essential to keep a range of other documents up to date. Some of the documents which a company has to keep up to date need to be sent off to Companies House. Other documents just need to be kept by the company. Failure to keep either sort of document up to date can lead to automatic fines, your company being dissolved, more fines and prosecution.

Companies House, who monitor whether companies are keeping their documents up to date, talk about the ‘life of a company’.  The formation of a company is it’s birth. The company must then be looked after up until its death, if and when that comes. Some company documents need to be updated every year while others are ‘events driven’.

In this blog post we will be focussing on the annual requirements that all companies have to fulfil.

Annual ReturnThe Annual Return has to be sent to Companies House. It gives details of the company’s structure including who the shareholder and directors are, what the registered company address is and if any shares have been traded. Companies House will normally end a reminder letter to your registered company address when this is due. If an annual return is not filed on time they will assume your company no longer exists and dissolve it.

Internal Company Accounts – All companies must keep basic accounting records showing incomings and outgoings, assets and liabilities. Where applicable it should also include a record of all stock bought and sold and the value of the stock held (stock take). These records have to be available for the company’s officers to look at whenever they like. In addition to these ongoing accounts annual accounts need to be prepared. These accounts need to be signed by a company director and by an independent auditor (unless you have an audit exemption). Copies of these accounts need to be sent to all company shareholders and directors. You may also need to send them to some people that you company owes money to.

Companies House Accounts – Virtually all companies have to file annual accounts with Companies House. The requirements for these accounts are very similar to the annual accounts required for your company shareholders and directors. In most cases the same accounts can be filed. These accounts will be publically available to anyone who wants them through Companies House and are often used by suppliers and potential clients as part of their credit checking process.

The dates when these documents need to be prepared will be determined by your company’s Accounting Reference Date. This is normally the last day of the month in which your company’s anniversary falls. Ensuring that all of your documentation is completed on time is essential not only if you want to keep your business active but also if you want to avoid getting prosecuted.

If you have any queries about when your paperwork is due or how to fill it out get in touch with our legal and accountancy teams and they will be able to help you out.

Anger At Companies House Late Filing Penalties

Companies-House-penaltiesAccording to some reports, Companies House have received just over 1,700 complaints and appeals from limited companies hit by late filing penalties. Due to the recent heavy snowfall and problems with Royal Mail deliveries, company accounts and annual returns failed to reach Companies House by the December 31st deadline. As a result many companies found themselves hit with an unexpected fine of £150 or more.

Fulfilling Company Legal Obligations

Registering as a limited company there are a number of legal obligations and accountancy requirements which you are expected to comply with. Failure to meet your obligations could lead to financial penalties and in more serious situations a company may even be struck from the register.

It is important that you keep on top of your legal obligations and submit your accounts on time. Companies House has openly dismissed company pleas that the delay was caused by the extreme weather conditions. In fact they have stated:

“Disruption by bad weather may well be an exceptional circumstance for some companies, but the disruption to the postal services was not uniform across Britain and the majority of companies managed to get their accounts delivered on time, despite the weather […] If a company has received a penalty, we provide guidance on our website on the appeals process.”

Interestingly, FreelanceUK comment on how Companies House accounts show that they generated revenue of £85 million last year from late payment fines.

Supporting You

If you need support to keep on top of your accounts and ensure they get delivered on time, our accountancy services are ideal. Cut down on the potential headaches and keep costs down with our fixed-fee and start-up accountancy services.

Ease your dealings with Companies House by contacting us today! Ring 0800 0828727 and ask for accountancy support or contact our accountancy partners Pinnacle Accountancy directly on 0845 880 2557.

Related Reading:

Company Formation Up 12% In November 2010

Company-Formation-2010Once again the Companies House registration statistics show that the number of Company Formations has risen in 2010. Even in the last months of this year, the figures look promising and show that we might finally be coming out of the recession with a healthy wave of new businesses and limited companies.

In November 2010, 31,235 company formations were completed, compared to 27,893 in 2009, which is a rise of around 12% in England and Wales. Scottish Company Formation was also up around 16% over last year. Rather promising to see so many new limited companies being formed going into 2011.

If you’re thinking of adding your company to the list, why not use our FREE Company Formation service to help you get started?

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