I published this glossary entry under the title of the Registrar of Companies yesterday. I am trying to add between ten and fifteen entries a day at present whilst also dealing with a mountain of other work:
The Registrar of Companies is the agency appointed by a state to hold the data that is required to be published on public record with regard to the limited liability companies and other entities such as limited liability partnerships, foundations and trusts whose existence is regulated by the jurisdiction in question as a consequence of their registration or incorporation in that place.
In many countries this responsibility is outsourced to agencies such as Chambers of Commerce and it is often very difficult to locate the precise place where information on any entity may be located as a result. There may also be fees charge to secure that information.
In the UK this service is provided by Companies House, which is an executive agency of the UK government's Department of Business under whatever name variant it is currently operating (as it is subject to frequent name changes at the whim of successive prime ministers).
Companies House is particularly ineffective organisation. It will register companies without requiring proof of the identity of owners or shareholders, contrary to the most recognised money laundering standards.
Companies House will also place accounts on public record without ever undertaking any proper checks to ensure that full disclosure required by law is made, or whether appropriate accounting standards or generally accepted accounting principles are complied with.
In addition, if a company fails to comply with its regulatory obligations to file either accounts or an annual statement with regard to its ownership and management, then the working assumption of Companies House is not that there has been a regulatory failure but that instead the company in question is no longer in operation, and as a consequence it takes the necessary steps to remove it from the register, meaning that those who have committed a breach in the law with regard to their obligations to file information are removed from almost all risk of penalty for doing so, This action by Companies House also means that very large numbers of companies about whom there might be quite appropriate public concern never file information that is required to hold them to account for their abuse of limited liability. It is almost as if Companies House wishes to facilitate fraud and other abuse undertaken through the operation of UK registered limited liability companies, limited liability partnerships and other entities that they make it as hard as possible to trace, let alone hold to account. This failure undoubtedly contributes to the UK tax gap.
It would seem that the UK ministers are aware of these failings but take no steps as a result to either create a proper enforcement agency for company law in the UK or to increase the fees charged by Companies House so that resources are made available to ensure that proper standards of accounting and disclosure are made by all limited liability companies that are registered in the UK. It does instead appear to be minister's aim to reduce the charges made by Companies House to the lowest possible sum since they believe that to do so reduces the regulatory burdens upon UK business. In the process UK government ministers ignore the enormous cost, they impose upon UK society and its government from fraud and tax loss.
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I think you should add something about the uselessness of the abbreviated accounts that so many companies seem to be permitted to file with Companies House these days (although you have touched on this in the sentence about accounting standards), and also the “confirmation statements” that very often don’t seem to confirm anything about shareholders and/or officers.
The Companies House register is also highly defective in identifying all the companies of which an individual may be an officer. This is a huge weakness. I understand issues of personal security, but the “service address” company officers are allowed to give is frequently of little or no use to potential stakeholders.
Noted
I will add
Abbreviated accounts may also get their own entry
The analysis is thorough, forensic and accurate, but it seems to me rather more a deconstruction of Companies House than a description; the term “the data that is required” is explored, but largely negatively in the context of a critical deconstruction. I do not wish to give you further work, but I wonder if a general description of the purpose of a register of companies first; and then use that pro forma to critically analyse the British register; or provide a review of what a register should contain, and a critical review of the British example.
Faur comment….It is covered by registration data but I will add it here too…
It has always struck me as wrong, and open to abuse, that you can set up a company run it for a year, close it and publish no accounts. You are then able to start up a new company doing the same thing and repeat the process. There are examples of individuals doing this every year for seven years or more, with no questions asked. Surely this must be open to fraud or tax evasion?
It is likely to indicate fraud
And no one in government seems to care
I have maintained for many years that being a company director should require a licence, obtained through a test (we do it for driving a motor vehicle, why not do it for driving a financial vehicle?)
Such a system would provide three benefits: firstly it would make it easy to track who is director of what, since the licences would be numbered. Secondly, it would prevent the abuse of naming some innocent mug as a director, a game much played by fraudsters. Thirdly it would avoid the problems of people getting the rules wrong through ignorance. I know of a number of small businesses where directors have treated their companies like personal bank accounts, only to run into tax problems later. Being able to set up a company for around £100, with no appreciation of the implications, is surely a crazy situation.
I wholeheartedly approve
Thank you! I have written to my MP (Daniel Zeichner) to suggest this idea. Perhaps others would like to do the same?
I have had much email correspondence with Companies House in the past ten years over concerns regarding the particular activities of a Director and his many companies (Circa 50 all of which are struck off; most went into administration and only two submitted accounts). Companies house responses amounted to: ” We are a filing system and have no powers to take action” However, their latest response was different. They said “we are hopeful that things will change when the Econmic Crime and Corporate Transparency Bill is enacted” (bills.parliament.UK/bills/3339). According to the Goverment website this is now before the House of Lords).
Are you aware of this Bill? It appears to give Companies House some teeth.
We can hope for the Bill
But I will not hold my breath
But it does enhance Companies House powers if enacted