Supplementary memorandum submitted by
Companies House
Q14. Powers to rectify the register under
the new Companies Act
Section 1095 of the Companies Act 2006 provides
a power for the Secretary of State to make regulations requiring
the registrar to rectify the register on receipt of an application.
The regulations are on the BERR website at www.berr.gov.uk/files/file45088.doc
The rectification power allows the registrar
to remove information that:
— Derives from anything invalid or
ineffective or that was done without the authority of the company,
or
— Is factually inaccurate, or is derived
from something that is factually inaccurate or forged.
Fraudulent filings occur most often when criminals
change the officers and registered office address of a company
for some fraudulent purpose. This is normally to order goods to
be delivered to the bogus address, which the criminals then sell
and pocket the profits for themselves. Currently in such circumstances,
the true directors have to seek a court order that the fraudulently
filed documents were in fact a "nullity" before they
can approach the registrar to remove them from the company's record.
This is both a costly and time consuming process, which adds to
the difficulties of the company which has been "hi-jacked".
Indeed it is these circumstances that led to the initial policy
behind the drafting of the rectification powers.
Restrictions
I may only remove the following documents from
the register under this power:
— Change of address of registered office;
— Changes to secretaries;
and specified other documents.
The process
Regulations made under the section set out who
may make an application for rectification of the register. They
are:
— The person who delivered the information;
— The company to which the information
relates;
— Any individual to whom the information
relates
The application must give specified information
about the person making the application, and indicate the reason
for the application. If I am satisfied that the application meets
the requirements for me to action it, I must give notice to the
persons mentioned above. The notice must state that I have received
an application to remove certain information from the company
record and that I am minded to remove it unless any of the persons
mentioned above raises an objection to my doing so within 28 days
of the notice. The letter will state the date by which any person
wishing to object must do so. If I receive no objection to my
intention to remove the information within the stated period,
I will remove the information and notify the applicant. Where
the original receipt of the information I have removed was published
in the Gazette, I must publish notice in the Gazette of its removal.
If any person wishes to object, they must do so in writing within
28 days of my notice. On receipt of an objection I must acknowledge
its receipt and notify the applicant and:
— The person who delivered the information;
— The company to which the information
relates;
— Any individual to whom the information
relates
(but not the person who made the objection)
that an objection has been made.
Where we receive an objection it will not be
possible for me to rectify the register, as the receipt of an
objection will indicate that there is some dispute as to the facts
of the case. I have no power to judge the competing facts of the
case, and the applicant will have to consider whether to take
the matter to court under the provisions of section 1096. That
section allows the court to consider applications for rectification
of the register and make an order for information to be removed
from the register. I hope this is clear; it is a complex issue
and often one in which our experience tells us that disputes are
not uncommon.
Q 35-37. Information available to dissemination
agents
Companies House provides information from the
register to a range of different intermediaries. This includes
the daily supply of bulk data and image files to the major company
information providers. The content and format of these products
has not changed as a result of the implementation of CHIPS. There
have been changes in the timing of the delivery of some products
because of the different ways in which the old and new systems
work. We deliver bulk image files nearly 24 hours earlier than
was previously the case. Some of the bulk data products are currently
being delivered a few hours later than was previously the case.
We are looking at our options for tuning the new system to improve
this.
Other intermediary customers access the register
via Extranet or an XML Gateway. These customers are now able to
access changes to the register in real time under CHIPS (the previous
system updated the register overnight as a batch run).
We have experienced a number of short-term difficulties
with the bulk data products following the implementation of CHIPS.
Most of these were resolved within two weeks of CHIPS going live,
although some issues with the bulk supply of mortgage data persisted
until the month of April. We work closely with our bulk customers
on an ongoing basis on a range of issues. This included keeping
them up to date on the action that we were taking to resolve these
problems.
Q4. Professional Accountants
Companies House is party to a liaison group
which embraces those professional accounting bodies involved with
the preparation of the majority of statutory accounts for limited
companies in the UK (ICAEW, ACCA, ICAS, CIMA and ACAI) and POB.
We will, as part of the agenda for this group, be looking at ways
in which we can work together to improve generally the quality
of accounts on the register.
The overriding priorities of CHIPS and the implementation
of the Companies Act 2006 have prevented us from defining with
POB the scope of their specific proposals and indeed, consulting
business and the accountancy bodies on them. We are confident
we can find a range of mutually beneficial ways of working with
professional accountants in practice. We are building a closer
relationship with the accountancy professional bodies with a view
to furthering this theme. Indeed we are planning to host in the
autumn, a joint working event with senior representatives of these
bodies where we want to explore how we can enhance the register
in the interest of improving the quality of information on it.
We will ask for feedback on the specific suggestions from POB
as part of this. As we progress to 100% electronic registration
over the coming years we will include a customer focused range
of improvements including consideration of those proposed by POB.
At this stage it is not possible to provide cost estimates but
we are able to provide an assurance that such proposals would
form part of our ongoing investment programme within our Trading
Fund finances.
Our web filing of accounts service was based
on the requirements of Schedule 8a (format 1) of the Companies
Act 1985 which specifies the minimum disclosures required in the
abbreviated accounts for small companies submitted to the Registrar
of Companies. As a first stage offering, we made the decision
to design the template strictly in accordance with this requirement
in order to keep it as simple as possible in the interest of encouraging
initial take up. Our electronic filing of small company abbreviated
accounts service was the World's first application of electronic
filing of accounts via XBRL and so far, our take up also leads
the world. Since launching the service in late 2006, over 200,000
sets of accounts have been filed electronically.
We did not therefore offer the submission of
optional information such as the disclosure of the company's accountants
at the initial stage. However we are not precluded from expanding
the template in future to include optional disclosure; indeed
we are being actively encouraged by BERR to work towards providing
companies and their advisors with opportunities to include, in
their accounts filed on the public record, as wide a range of
options as possible for additional disclosures, in addition to
the statutory minimum information.
Q 57. Metropolitan Police within Companies
House
The posting of a dedicated officer from the
Metropolitan Police into Companies House was one of the strands
of co-operation between the two organisations which was taken
forward following the launch of Operation Sterling in 2005. This
posting, which lasted for 18 months, achieved its objective in
building robust and efficient mechanisms for co-operation between
Companies House and the different police forces in handling individual
cases of fraud linked to the company register. These mechanisms
continue to work well. In addition, Companies House has now established
contacts with the City of London Police and with other law enforcement
agencies on broader issues relating to fraud. As things stand
I do not see a need for a police officer to be located physically
in Companies House, as we have used the secondment wisely to transfer
skills and knowledge of networks to our own staff.
Q60/63. Company Directors appearing on the
register of disqualified electors
It is an offence for a person subject to a disqualification
order to be appointed as a director of a company or a member of
a Limited Liability Partnership. Companies House systems perform
automatic checks on newly-appointed directors and, where it appears
that a newly-appointed director may be subject to a disqualification
order, we pursue the matter with the director in question. In
some cases this can lead to prosecution.
Q75. Power to make electronic filing compulsory
Section 1069 of the Companies Act 2006 enables
the Secretary of State to make regulations requiring documents
that are authorised or required to be delivered to the registrar
to be delivered by electronic means. The regulations are subject
to the affirmative procedure, and so would need approval from
both Houses.
May 2008
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