15 November, 2019
We recently acted for a company Director who faced criminal prosecution by Companies House for late submission of company accounts. Because there had been two earlier similar breaches the Director was exposed to a disqualification from acting as a Director for up to 5 years.
The company was successful and well-run but the Director in question, who was also Company Secretary, had simply taken on too much of the responsibility for complying with the various regulations relating to the filing of information with Companies House. The company was growing and the various other demands, together with pressures in their personal life, meant that deadlines were missed.
However, applying our extensive knowledge of the regulatory framework and of the processes of the Magistrates' Court we were able to demonstrate that there were a number of significant mitigating features, including various personal difficulties, which had impacted on the Director's performance. We advised on how the client could take steps to demonstrate that action had been taken to improve the processes of compliance and that there was no likelihood of any further breaches of the regulation, and we were able to persuade the Court not to apply the disqualification.
Needless to say, our client was very relieved and pleased with the outcome and our Corporate Team was able to provide further advice about how other areas of the business could be improved.
It is important to remember that Directors carry legal responsibility for making sure that information is sent to Companies House within the time limits and as well as the annual accounts this includes:
A failure to comply with these duties can result in prosecution, fine and potential disqualification from acting as a Director.
The moral of the tale is to be aware of, diarise and keep on top of all the regulatory requirements in respect of filing accounts and other documents, and if you receive a requisition, or if you have any concerns, or if the processes are becoming challenging, contact someone who can advise you and help to resolve and manage the situation before it becomes serious.
The People Who Can Help:
For investigations and prosecutions Daniel King can be contacted on:
Email: Daniel King
Tel: 01772 220257
For a general company health-check please contact John Pickervance from our Commercial team on:
Email: John Pickervance
Tel: 01254 222365
For all Company Governance enquiries contact Daniel Milnes on:
Email: Daniel Milnes
Tel: 01254 222313
Learn more about our Regulatory department here