There has been an exponential rise in prosecutions brought by Companies House in recent years against directors for failing to file their company’s statutory accounts on time. This is a criminal offence under the Companies Act 2006 (the “CA 2006”). The consequences of failing to take action in response to a Companies House investigation can, therefore, be severe. This more proactive approach from Companies House coincides with various changes that were introduced to the Companies Register by the Economic Crime and Corporate Transparency Act 2023, ultimately to improve integrity, compliance and reporting standards within the UK’s corporate landscape.

Directors are often surprised to learn that Companies House has the power to prosecute such cases, particularly given the more extensive directors’ duties that require attention elsewhere within the CA 2006. However, it is critical that directors understand the circumstances in which Companies House may bring prosecutions given the potential repercussions, both personally and for their companies.

Criminal Offence

Directors risk incurring personal criminal liability for failing to file statutory accounts simply by holding office as a director, irrespective of whether or not they oversee their corporate accounting practices. This renders it a ‘strict liability’ offence. Although a successful prosecution will not entail a custodial sentence, directors will still incur a criminal conviction and may additionally be liable to pay a statutory fine.

A conviction can have severe consequences for a director’s ability to travel on international business, secure international work visas and can cause great interference with their professional and personal lives. Directors who are prosecuted on multiple occasions may further sustain a Company Director Disqualification Order for potentially up to 5 years. Invariably, a director’s conviction will also cause reputational damage to their company and may impact its financial performance.

Defending a Companies House Prosecution

Edwin Coe’s Restructuring & Insolvency team has an exceptional track record of persuading Companies House to withdraw directors’ prosecutions before the first Summons hearing. Our extensive experience in this area has shown that directors are generally not at fault for purposefully ignoring their filing duties. Rather, filing failures usually arise due to complex corporate restructurings or oversight by a company’s accountants.

However, it is imperative that directors facing prosecution engage with Companies House early on and do not ignore a Summons. We are adept at defending directors and securing early withdrawals of prosecutions where possible, particularly where it is no longer in the public interest for a Companies House prosecution to proceed.

Should you require assistance with defending a prospective or live Companies House prosecution for delayed or failed statutory filings, contact Ali Zaidi, Barry McGouran or Harry Collins of our Restructuring & Insolvency team for urgent advice. We are experts and are here to help.