201014 The Integrity of the Companies House Register

14/10/2020 FAO – Minister for Corporate Responsibility Lord Callanan

Case ref – 6950528/RLL

The integrity of the companies register is lacking due to the abuses easily committed by those who trade but do not submit accounts and allow themselves to be struck off.

If the Registrar is aware that some of these companies may have traded, striking a company off the register appears to be inappropriate, lacking.

This is not an issue about creditors, or at least not those who may be owed monies – the issue is about those companies that trade under the ‘limited’ status and likely have no creditors – no one to whom they owe monies. The issue relates to the abuse of the status, the ease of this and that those who may have an issue will likely do so months after the company has been struck off.

I have also approached HMRC in the past and they too appear to be disinterested. My issue is not one of taxation or fraud (through both could well be associated) but of the register integrity.

I understand not all companies are set up to trade immediately. However, a company director, whilst they may not be receiving an income from a company, still has an obligation to submit accounts. I deal with a number of companies, I regularly ask the parties involved to provide their last set of accounts. Often the response is ‘made no profit, not submitted’. This does not cut it but appears acceptable to many.

GDPR appears to be used as a shield by many, the fears of the 1984 act, that it would be a ‘fraudsters charter’ now appearing to be more of a reality. Whereas you convey GDPR as through a negative, I prefer to engage with it, adopt the positives and utilise the enabling sections:

prevention &/or detection of crime, apprehension and / or prosecution of offenders

3(1)The GDPR provisions listed in sub-paragraph (3) do not apply to personal data which consists of a classification applied to the data subject as part of a risk assessment system falling within sub-paragraph (2) to the extent that the application of those provisions would prevent the system from operating effectively.

(2)A risk assessment system falls within this sub-paragraph if

(a)it is operated by a government department, a local authority or another authority administering housing benefit, and
(b)it is operated for the purposes of—
(i)the assessment or collection of a tax or duty or an imposition of a similar nature, or
(ii)the prevention or detection of crime or apprehension or prosecution of offenders, where the offence concerned involves the unlawful use of public money or an unlawful claim for payment out of public money.

information required to be disclosed by law etc or in connection with legal proceedings

5(3)The listed GDPR provisions do not apply to personal data where disclosure of the data—

(a)is necessary for the purpose of, or in connection with, legal proceedings (including prospective legal proceedings),
(b)is necessary for the purpose of obtaining legal advice, or
(c)is otherwise necessary for the purposes of establishing, exercising or defending legal rights,
to the extent that the application of those provisions would prevent the controller from making the disclosure.

With respect to insurers, whilst not all companies have or will need insurance, many do – the motor trade is an example, courier (any business with vehicles). Employers’ Liability (EL) insurance is required as soon as a company becomes an employer – the policy must cover you for at least £5 million and come from an authorised insurer.

Possibly, the registration process could be tweaked to include questions about trading, employment and insurance … to add some integrity to the register?

I would suggest membership of IFIG. The police have little time/resources for such matters, Action Fraud is little more than a collation tool attempting to address the vast swathe of frauds committed and seldom packaging singular complaints to a constabulary.

As someone who has assisted a number of overseas companies with trading in the UK, your belief that the UK has a reputation as a great place to do business appears misguided – it does however appear to be considered less problematic than dealing with some other countries. Whilst I applaud the online register, the data is seldom of interest to those who wish to have real-time understanding of those they are doing business with or wish to do business with. The database is akin to that of the DVLA –archaic, behind the present as to be open to abuse, of benefit to those who commit fraud or deceive.

I am not suggesting Companies house register should strive to be ‘real time’. My concern is specifically about start-ups ad what can be done to prevent abuse at inception to first year accounts.

Regards