What is Companies House?
The regulatory entity responsible for registering new businesses and keeping track of their records in the UK is called Companies House. The primary responsibilities of Companies House are to:
- Register, strike off, dissolve or restore companies and LLPs (Limited Liability Partnerships);
- Review and archive company data provided under the Companies Act and relevant laws;
- Make this data publicly accessible
Why do both companies and LLPs have to register with Companies House?
Originally just companies were incorporated at Companies House. The point of incorporating a company was to create a different legal personality from its shareholders, otherwise those individuals would have had unlimited liability for the business’s debts and obligations.
The UK also has partnerships, where people can trade together without a separate legal personality, but these have unlimited liability for its members. Many professions operated through partnerships, such as lawyers and accountants. LLPs were created to enable partnerships to continue trading as before, but to give them the separate legal personality that exists for companies.
As both entities, companies and LLPs, are separate legal personalities from their shareholders (in the case of companies) and members (in the case of LLPs), and as both have similar public filing obligations, it made sense for Companies House to be the public register for both.
What obligations do companies/LLPs have?
Obligations on initial registration
When a company registers for the first time, it must send information to Companies House including the following:
- Company name in full
- Nature of business
- Registered office details
- Articles of Association
- Directors' information (name, any former name, date of birth, nationality, occupation, both a service address and usual residential address)
- Company Secretary information (if any)
- A Statement of Capital that includes the number of shares allotted, the amount paid or outstanding on subscription for the shares, and share rights
- Information on the shares that will be granted on allotment, as well as the shareholders' identities
- Memorandum of Association with a subscriber list
Similar rules apply to LLPs. However, LLPs do not have directors and secretaries and their shareholders are known as members. In addition, there is no requirement for an LLP to have any capital and it therefore does not have issued shares. Further, LLPs do not have Articles of Association, so any governing agreement between the members will be private and not filed at Companies House.
What other submissions are required?
Each year, all companies are required to prepare an annual Confirmation Statement and submit their annual accounts to Companies House (which contains fundamental information about the business).
The Confirmation Statement serves two purposes:
(1) it prompts the business to update any information which has changed;
(2) it makes searching the Companies House file easier. It is only necessary in most cases to go back to the last confirmation statement and note any changes registered since that date.
In addition to the annual filing requirements referred to above, Companies House must also be notified of certain other changes to the business’s information as they occur throughout the year, including any changes to the registered office, the business's share structure, or the identity of any directors or company secretaries (or members in the case of LLPs).
What happens if the rules are not followed?
The officers of a business (namely, directors of a company or designated members of an LLP) that is in operation but fails to disclose correct and timely information risk legal action. Failure to perform these duties could result in legal action against the business’s officers in their individual capacities.
It's crucial to keep in mind that submitting accounts late carries financial penalties, in addition to the potential risk of prosecution. Companies House offers guidance on late filing penalties.
This means that all limited firms should have access to adequate resources to file business information correctly and prevent any issues that can result from incomplete or late submissions.
Do foreign entities need to register with Companies House?
If an overseas business has a UK establishment (being a place of business or a branch in the UK), it will need to register with Companies House and provide certain information on an annual basis and when certain other changes, such as a change of officers, occur. If the overseas entity has qualifying freehold or leasehold property in the UK, it will also need to register on the Register of Overseas Entities.
How 3CS can help
If you require further information or need help with any legal corporate or commercial matter, including incorporating a UK business, registering an overseas business at Companies House, or keeping your Companies House records up to date, please get in touch with your usual 3CS contact.