Companies Are Being Warned To Comply With New Rules
Companies registered at Companies House are being warned to keep on top of their responsibilities, such as filing their confirmation statements on time, otherwise they could face new penalties.
Companies House will still support businesses to help them comply with their legal obligations by sending notifications via email, for example. But if warnings issued by the department are ignored, then a financial penalty could be applied. Any company or director who is found responsible for committing a more serious offence could face civil or even criminal prosecution, and/or be disqualified from being a company director.
There are other agencies that could be brought into a prosecution too if necessary, such as the Insolvency Service, among others. This could result in a sharing of intelligence between the various agencies, with cases being referred between them, which could lead to more holistic enforcement action where that is appropriate.
Any director convicted of an offence could end up with a criminal record. You can find out more about the Companies House approach to enforcement in the Companies House enforcement policy.
What financial penalties could me or my company face?
If you don’t comply with your obligations under the new rules, then you can face a fine, which will increase depending on the severity of the breach, and the number of previous breaches of a similar nature.
Source: Gov.uk
The new rules are part of the ongoing implementation of the Economic Crime and Corporate Transparency Act 2023, and increase the powers of Companies House in relation to tackling economic crime and improve corporate transparency.
Martin Swain, director of Intelligence and Law Enforcement Liaison at Companies House, said: “The introduction of these new penalties marks another significant step forward for Companies House and our transformation.
“Where our guidance and support are not enough to encourage users to comply with the law or discourage misuse of our registers, we won’t hesitate to use these new powers available to us.
“We’ll take a consistent and proportionate approach to these new powers to firmly, but fairly, enforce the law. This will improve the quality of the data on our registers and help us play a greater role in identifying, disrupting and preventing economic crime.”
Can I appeal a penalty?
You can appeal a penalty from Companies House, providing you have permission from the court to do so. This appeal would be made to either the County Court or, in Scotland, the Sheriff Court. But there are very specific grounds that must apply for you to have grounds to appeal:
You may only appeal on the grounds that the decision to issue a financial penalty, the level or type of financial penalty or any condition stated in the penalty notice:
- Is unlawful.
- Is irrational or unreasonable.
- Has been made on the basis of procedural impropriety or otherwise contravenes the rules of natural justice.
Source: Gov.uk
Any application to the court for permission to appeal must be made within 28 days from the day after the penalty notice is given. Any request for permission to appeal after this date would only be accepted if the court accepts there was a good reason for you not filing to seek permission within that period.
If you choose to appeal, you also must serve written notice of the appeal application on the registrar within seven days from the date on which the application for permission to appeal was issued. You also must outline what grounds you are making the appeal on within a statement, which can be emailed to enquiries@companieshouse.gov.uk.
You can also write to the registrar at:
Companies House
Crown Way
Cardiff
CF14 3UZ
The court will consider the appeal, and could dismiss the appeal, vary the penalty amount, change the nature of financial penalty between a daily rate, fixed penalty, or a combination of the two. The court could also quash the penalty completely, or in part.
Jonathan Upton, director of Legal Services at the Insolvency Service, said: “We are committed to working collaboratively with Companies House to help improve the integrity and transparency of the data on its register.
“Where it is appropriate and proportionate to do so, and as part of our overall approach to tackling economic crime and wrongdoing, we will utilise the powers available to us to take enforcement action against misconduct on the register.”
We can help you
If you are concerned that you have not complied with all your obligations for Companies House, then please contact us and we will do everything we can to assist you.
