I did a search of Companies House this morning. I found 100 companies with Covid in their name. The vast majority have been formed in the last month or so.
Let's be clear that all of these might be genuine businesses that are adopting what might be called an unusual marketing approach. Of course, I cannot know.
And there is good reason for that. We demand almost no information from those who are forming companies in the UK so that those who are managing them can be properly identified. Nor do we have any clue what these businesses actually intend to do. And we do not know when or if they trade. Whilst we also do not really know what resources they can command to ensure their viability of they do trade.
What is more we will learn very little more if and when they trade, because the accounts that a small company is required to file on public record are almost wholly meaningless - and include no profit or loss or tax paid data at all.
It is my suggestion that this is not good enough. It's a point I have been making for a long time. But I will reiterate what we need to address this issue. It is the following:
- All companies must disclose their entire beneficial ownership on public record, with this having been verified by Companies House;
- All directors of the company must have their details published and verified by Companies House;
- All companies must have a statement of purpose published on line, saying what their intended trade is;
- The place of trade must be published if not the registered office address;
- If the company has a website the details of this should be published;
- An email contact address must be supplied for all companies;
- When a company starts trading this must be notified on public record;
- The full accounts all companies - and not the abbreviated abominations now filed - must be available on public record, and those accounts must address issues including:
- Directors' pay;
- Taxes due and paid, including deferred tax;
- Trading with parties related to the company, its owners and directors;
- Its bank facilities;
- Its plan to be sustainable.
- All this data must be kept up to date as changes happened, whilst accounts should be filed within six and not ten months of the year-end date.
We cannot afford the uncertainties that current company law creates in the UK.
That is especially true now.
But what we also need is a regulator who enforces this law, and quite bizarrely there is none who has to do so in the UK right now, as it is not considered Companies House's job to do so.
The time for company law reform has arrived.