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Many people do not realise that Companies House is able to investigate and bring criminal prosecutions against individuals. As the government body which regulates UK company registrations, Companies House prosecutes company directors accused of failing to fulfil their statutory obligations under the Companies Act 2006 (the Act).
The most common offence that Companies House prosecutes is failing to file a company’s annual accounts on time. The agency can bring a range of other, related, criminal charges including failing to file a company’s confirmation statement.
The consequences for any director found guilty can be significant. Not only does a convicted person have a criminal record, but they may be fined. They can also, in certain circumstances, be disqualified from acting as a director for any company. A director who is a professional such as an accountant or a solicitor may also have to notify their regulator of the conviction.
Having previously made relatively little of its prosecutorial powers, Companies House is now much more active in this area and often prosecutes directors, of companies of all sizes, for delays and other issues which may not be their fault.
Anyone facing the prospect of Companies House prosecution is advised to seek the advice of an expert lawyer as soon as possible, as key to a successful defence is often to act swiftly.
Below are the answers to some frequently asked questions (FAQs) regarding Companies House prosecutions.
The Companies Act 2006 imposes criminal liability on company directors for breaches of a variety of statutory responsibilities. Arguably the most significant of these (and certainly the duty which Companies House is most keen on enforcing) is the obligation to file annual company accounts on time.
Company Directors are obliged to file company accounts with the registrar within a prescribed period of time following the financial year’s end (there are different rules depending on the type and size of the company, for filing a company’s first set of annual accounts and if these cover a period of more than 12 months).
If these appropriate accounts are delivered late then the individual director(s) in post at the deadline can be prosecuted under Section 451 of the Act. Prosecution can take place even if the delay was due to circumstances beyond a director’s personal control or involvement (which may well be the case in very large organisations or for directors of more than one company).
The evidence required for a Companies House prosecution for failing to file company accounts on time is relatively unsophisticated. Because it is a criminal offence for a company director not to comply with the requirements to file the company’s accounts by the relevant time limit, all the prosecutor needs to prove is:
a) that the defendant was a director immediately before the end of the period to file the accounts;
b) that the deadline has expired, and;
c) that Companies House didn’t receive the documents by that time.
It is important to recognise the liable directors are those who were in place immediately before the end of the period to file the accounts (even if they have subsequently left the company).
In 2024, Companies House published its enforcement policy setting out its approach to using its enforcement powers. This follows a risk-based approach with defined “levels” of non-compliance with corresponding enforcement action Companies House is likely to consider appropriate.
There is a statutory defence to the offence of failing to file company accounts on time. This defence is that the director took “all reasonable steps for securing that those requirements would be complied with before the end of that period”.
The key words to note here are “all reasonable”. In order to avail themselves of this defence the director does need not take all “possible” steps. They only need to be “reasonable”.
Having said this, it is not sufficient to demonstrate that the director took “some” or “many” reasonable steps to ensure the accounts were filed on time. If there were any other reasonable steps that they could have implemented – and which did not occur – then the defence is not made out. In practice, this creates a high evidential bar to meet for those accused.
Failing to file company accounts on time is an offence triable only in the Magistrates Court. If convicted the Court can impose an unlimited fine. Imprisonment does not apply.
Apart from the criminal conviction and financial penalty, a particular concern for some directors may be disqualification. If a person is persistently in default of companies’ legislation (including the requirement to file accounts on time), a Court can order that they are disqualified from acting as a company director for up to five years.
Persistent default can be conclusively proven by showing that, in the five years up to the date of the application for disqualification, the director has been found guilty of three or more relevant offences. This applies even if the convictions occurred on the same occasion.
This may be a significant risk for directors of many companies or companies which are late filing accounts for several years.
Any director who is contacted in relation to a potential Companies House prosecution is advised not to ignore this communication. Constructive and early engagement can prove important to establishing a defence by enabling the director to explain to the agency what the problems have been and how they will be resolved.
It is important to be aware, however, that over promising to the agency at this stage is generally a mistake and the risk of saying something in this communication that is unhelpful in the context of a future prosecution, for example acknowledging that further steps could have been taken at an earlier stage.
Anyone who receives a summons to Court from Companies House is advised not to ignore it.
The director will be required to either attend Court personally, through a lawyer, or via correspondence and indicate a plea to the charge. If a not guilty plea is entered a trial will be listed and the director will have to attend and may give evidence and call witnesses. The summons will normally be to Cardiff Magistrates’ Court, as this is near Companies House headquarters.
Hickman & Rose has substantial experience in defending the interests of directors in Companies House prosecutions and investigations. Our lawyers are used to examining highly complex corporate structures and getting to grips with issues involving directors, accountants and auditors which can result in delays beyond the scope of the individual director.
We have expertise in advising on tactical considerations and we have been extremely successful in persuading Companies House to drop cases. All the following recent Hickman & Rose cases were discontinued before trial as a result of our submissions.
8 May 2025
Submitting annual company accounts to Companies House on time is one of the most important responsibilities of any UK-registered company’s director. Every year thousands of directors are accused of…
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