Business Crime & Fraud Services

Business Crime & Fraud

Companies House prosecutions – Directors

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Companies House brings prosecutions against directors for a number of offences arising from the administration of their companies.  One of the most common offences prosecuted under the Companies Act 2006 is for a failure to submit accounts. A failure to submit accounts and reports to Companies House by the prescribed deadline is a criminal offence, for which any and all directors of a company can be personally liable, irrespective of their day to day role in the company or involvement in the preparation of accounts.

Whilst the penalties for such offences are limited to fines and are minimal for first-time offences, these can quickly accumulate and become multiple or repeated breaches. This can often be the case where there is a complex group structure and/or historic accounting problems that cannot be resolved quickly.

More importantly, the mere fact of a criminal conviction can have significant personal and professional implications for a director. In the most severe cases, a court can impose a Company Director Disqualification Order, which prohibits a person from being involved in the promotion, formation or management of a company, for up to five years.

In our experience, failure to file accounts and reports is rarely due to deliberate non-compliance, but usually caused by other difficulties within the business. Depending on the size of a company, its directors may have relatively little involvement in the preparation and submission of its statutory accounts and reports. In particular, where a company is particularly large and/or part of a group of companies, it is usual to have a dedicated finance team. This team will have day-to-day responsible for preparing accounts for approval by the directors and submitted within the deadline. Unfortunately, the threshold for a defence against criminal prosecution is very high and often difficult to establish, even where significant steps have been taken to prevent the failure. Furthermore, it is the directors of the company who risk personal criminal liability, even where operational responsibility for preparing and filing accounts has been delegated to a finance team.

If you or your company has been contacted by Companies House about possible criminal prosecution in respect of statutory accounts and reports, we will be happy to discuss how we can assist.

Cases