Companies House: a brief explanation

In this article, Kyrran Dearnley-Porter in Chadwick Lawrence’s Corporate and Commercial department provides a basic understanding of Companies House and the benefits of having a central register of companies.

Companies House is a government service responsible for maintaining the public register of companies and other businesses in the UK. It contains legal and financial information and provides details of ownership and the directors responsible for the day to day running of a company.

Companies House ensures that key information about businesses is publicly available, up to date and accurate. This information can be used by investors, suppliers, customers, and other stakeholders to make informed decisions about whether to do business with a particular company or not.

In addition to maintaining the public register of companies, Companies House also has several other responsibilities. These include:

• Incorporating and dissolving companies: Companies House is responsible for registering new companies in the UK and ensuring that they meet the legal requirements for incorporation. It also processes applications for dissolving companies when they are no longer trading.
• Maintaining records: Companies House keeps records of all the changes that companies make to their details, such as changes to their name, address, or directors and secretaries.
• Regulating company names: Companies House has the power to prevent companies from using certain names if they are deemed to be offensive or misleading.
• Enforcing compliance: Companies House has the power to fine or prosecute companies that fail to meet their legal obligations, such as filing their annual accounts or confirmation statements on time.

One of the key benefits of Companies House is that it provides a level of transparency and accountability for businesses. Anyone can access information about a company’s financial performance, ownership, and legal structure, which can assist investors, customers, and suppliers in making decisions to contract with a company.

For example, if a company is seeking investment or applying for credit, the lender or investor can use Companies House to check the company’s financial performance and ensure that it is a reliable and trustworthy investment.

Similarly, if a customer or supplier is considering doing business with a company, they can use Companies House to check the company’s ownership and structure to ensure that it is a reputable and legitimate business.

Overall, Companies House plays a vital role in the UK’s business ecosystem. By providing clear, accurate and accessible information about companies, it helps to promote trust and confidence in the business community and supports the growth and success of businesses across the UK.

It is currently expected that Companies House will undergo reforms in 2023 as part of the Economic Crime and Corporate Transparency Bill. The changes are likely to include identity verification for all directors, people with significant control (PSCs), and those delivering documents to the Registrar. It is understood that existing directors and PSCs will be given a brief period to verify their identity, whilst new directors and PSCs will not be registered at Companies House without having their identity verified prior. Verification will take place through a database called IDAM (identity access management), and Companies House offers two routes: you will be able to verify directly with Companies House or through a Corporate Service Provider (CSP) such as a firm of solicitors or accountants. The reforms shall give Companies House more effective investigative and enforcement powers, introducing better cross-checking of data, and it is therefore vital now more than ever that information provided to Companies House is accurate and up to date.

If you require any further advice or assistance with the incorporation or dissolution of a company, Companies House filings, any other company matter or the 2023 reforms, please contact our expert team of lawyers at newenquiries-coco@chadlaw.co.uk.