Falling Foul of False Filings

9 November 2018

Company directors have a legal duty under the Companies Act 2006 (“the Act”) not to file false information on Companies House. Knowingly or recklessly delivering information or making a statement to the Registrar of Companies that is misleading, false or deceptive is a criminal offence under s.1112 of the Act and can lead to imprisonment and/or a fine.

Many company directors have previously been prosecuted for failing to file documents on time, however, Companies House believe that Mr Kevin Brewer is the first company director who has been prosecuted for filing false information under s.1112 of the Act.

The case

Kevin Brewer, a businessman, incorporated a company called ‘John Vincent Cable Services Ltd’ in 2013, making the former Business Secretary Vince Cable MP a director and shareholder without his knowledge. Mr Brewer then wrote to Mr Cable to inform him what he had done. Companies House subsequently dissolved the company and took it off the register.

Mr Brewer then formed another company in 2016, called ‘Cleverly Clogs Ltd’, making Baroness Neville-Rolfe (the Minister with responsibility for Companies House), James Cleverly MP and an imaginary Israeli national, directors and shareholders without their knowledge.

According to Mr Brewer, he set up these fake companies to highlight weaknesses within Companies House and the potential for money laundering. Following the second incident, Companies House referred Mr Brewer to the Insolvency Service criminal enforcement team for prosecution.

Mr Brewer pleaded guilty to filing false information on Companies House and was fined £1,602, ordered to pay costs of £10,462.50 and a victim surcharge of £160.

According to Companies House Mr Brewer was referred for prosecution after ignoring their warning about the seriousness of the offence by going ahead and setting up a second fake company. 

Filing obligations

Although this is an unusual case, it is an important reminder for company directors that when filing documents on Companies House they are required to comply with numerous legal obligations.

Company directors are required to keep accurate accounts and records and they have a number of obligations with respect to filing documents on Companies House. Some obligations are on-going while others are triggered by a change in the company’s details. For example, when a company director resigns or the company changes its names, directors are required to file the relevant forms on Companies House within the required timescales.

Directors also have a number of legal obligations with respect to filing company accounts and audits. Filing these late is a civil and criminal offence.

Company directors are therefore not only required to ensure that the information submitted to the Registrar of Companies is accurate, but they also have to ensure that certain information is filed within specific timescales to avoid prosecution.

Inaccurate filings

Inadvertently filing inaccurate information is unlikely to breach s.1112 of the Act. As outlined above, to commit an offence under s.1112 of the Act a director has to ‘knowingly or recklessly’ submit false information.

You can correct any inaccuracies arising from forms delivered on or after 1 October 2009 by using Companies House’s second filing service. Each ‘second filed’ form must be accompanied by either a Form RP04 (for companies) or a Form LLRP04 (for LLPs). It is important to note that although using the second filing service will rectify the inaccuracy, it will not remove the original form from the register. The original form will remain there indefinitely or until a successful application for rectification is made either by a court order or by application to Companies House.

Filing inaccurate information by mistake is therefore unlikely to lead to any personal penalties to the directors. However, Companies House’s robust approach in prosecuting Mr Brewer shows that there is a line that company directors should never cross (let alone twice) – even if it is just to prove a point.

Our Corporate and Commercial team can advise you on your company filing duties and assist with this process. If you require assistance with any of the above, or would like to enquire about how else the team could help with your company’s affairs, please contact the Corporate and Commercial team.

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