Statement of lawful purpose - by the accountant?

How can an agent sign off on the "intentions" of the directors?

Didn't find your answer?

When filing a confrmation statement on behalf of a client we now have to tick the box "I confirm that the intended future activities of the company are lawful."  How can we make that statement? At the least I suppose we need clients to make the statement to us first, but even with that evidence I don't see how we can be certain of their intentions. Many people have made the point that the statement is pointless because crooks don't tell the truth anyway, but I tell the truth, and even though I consider my clients to be trustworthy (or I would have got rid of them), I still can't be certain of their intentions. Am I alone, or are others concerned about this?

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RLI
By lionofludesch
15th Mar 2024 14:56

There was a thread on this last week.

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By whatdoyoumeanwashe
15th Mar 2024 15:06

Would you mind sharing a link to it please? My searches have not found it.

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Replying to whatdoyoumeanwashe:
RLI
By lionofludesch
15th Mar 2024 15:39

whatdoyoumeanwashe wrote:

Would you mind sharing a link to it please? My searches have not found it.

No, not at the moment. It was Monday or Tuesday last week.

Mrs Lion's a big believer in "I can't find it, can you find it for me?"

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Replying to lionofludesch:
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By whatdoyoumeanwashe
15th Mar 2024 15:46

I hear your pain. School parents' WhatsApp groups are full of people who treat a group chat like a Google search. The worst example was one particular parent who once asked the group what the time was.
But in this case I genuinely had searched and the results I found did not address my question.

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Replying to whatdoyoumeanwashe:
RLI
By lionofludesch
15th Mar 2024 17:11

I was just about to set off for the match against Toulouse.

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By More unearned luck
15th Mar 2024 15:04

1) You have no choice: you can't file without making the declaration
2) If you have reason to believe the client intends that its future activities will be unlawful why is it your client?

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Replying to More unearned luck:
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By whatdoyoumeanwashe
15th Mar 2024 15:13

1) Of course I have a choice (and if I didn't have a choice, I'm not a lawyer, but I think something signed under duress carries little legal weight).
2) As per my post, I don't have reason to believe that, I simply can't prove otherwise.

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Replying to whatdoyoumeanwashe:
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By Roland195
15th Mar 2024 15:23

You are thinking about it too much. It's a meaningless sop by the powers that be to pretend they are taking such issues seriously.

Get the client to sign the declaration the rest of us are going to do and try not to get up thinking about your handyman client who doesn't pay for the correct permit at the tip.

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Replying to whatdoyoumeanwashe:
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By More unearned luck
15th Mar 2024 17:13

1) I meant if you want to file you must make the declaration. Yes you have the choices of not filing (which will result in the company being struct off and its assets becoming bona vacantia and a law suit from the client) and getting the client to file its own CS (which may prompt the client to change accountants (why keep a dog and bark yourself?)).
2) You are not required to prove beyond reasonable doubt that the client has no felonious plans. If you comply with you AML obligations, PCRT and ethical rules and you intend to retain the client, then it is difficult to understand how you can have any reasonable doubt about the continued honesty of your client.

If the company does go on to do something unlawful, what evidence would there be that the intention to do so was formed before the CS was submitted or the company formed?

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Replying to More unearned luck:
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By whatdoyoumeanwashe
15th Mar 2024 17:31

Thank you. Yes, I get what you're saying. I'd prefer it if the statement referenced reasonable doubt, or "to the best of my knowledge". The way it's phrased is very black and white when I think by definition it's impossible to be absolutely certain of someone else's intentions.

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By Tom+Cross
15th Mar 2024 16:43

There you go.

https://www.accountingweb.co.uk/any-answers/confirmation-statement-filin...

I often find that the Aweb search engine runs on steam!

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Replying to Tom+Cross:
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By whatdoyoumeanwashe
15th Mar 2024 17:14

Thanks. That post definitely didn't come up in my searches!

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By Leywood
15th Mar 2024 17:51

Dont use the aweb search function.

Use google (and add 'aweb')

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By David Ex
15th Mar 2024 17:09

whatdoyoumeanwashe wrote:

When filing a confrmation statement on behalf of a client we now have to tick the box "I confirm that the intended future activities of the company are lawful."  How can we make that statement?

If you are just confirming the 'intention' at the time you tick the box, then that's not as bad as being asked to predict the future activities. As of this minute, I intend to wash my car tomorrow morning. Ask me later and I suspect that intention may have changed.

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Replying to David Ex:
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By whatdoyoumeanwashe
15th Mar 2024 17:18

I intend to wash my car tomorrow too. But I may or may not be telling the truth. I'm sure you're happy to sign a statement about your intentions for tomorrow, but are you happy to sign one about mine?

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Replying to whatdoyoumeanwashe:
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By David Ex
15th Mar 2024 17:51

whatdoyoumeanwashe wrote:

I intend to wash my car tomorrow too. But I may or may not be telling the truth. I'm sure you're happy to sign a statement about your intentions for tomorrow, but are you happy to sign one about mine?

If it’s causing you as much stress as it apparently is then don’t do it. As MUL suggested, you can either tick the box and file or not file. I can’t see a third option.

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By whatdoyoumeanwashe
15th Mar 2024 21:47

I guess the third option would have been, if lots of people were concerned about it, putting pressure on CH to amend the wording, perhaps to include "to the best of my knowledge". Or perhaps forcing directors themselves to make the declaration, as they do for some other forms E. G. a DS01.

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By adam.arca
15th Mar 2024 18:46

I’m with Roland, the OP is over-thinking this one.

Ultimately, as agents, we the accountants are making a declaration on behalf of our clients. As long as we have in some way got the client to sign off on the legal activities confirmation, we’re in the clear.

Obviously, if we then come across info which suggests the activities are not “legal” (whatever that means in this context), we’ve got an entirely different issue and the confirmation statement part of that is the least of our worries.

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Stepurhan
By stepurhan
15th Mar 2024 20:59

So you've not been concerned about confirming who are the persons of significant control, what the company does, who are the shareholders, but this is a bridge too far for you?

If you are filing confirmation statements on behalf of clients, you are working on the information they have supplied. You should be getting clients to confirm the information is correct before you file. If you haven't been doing that up to now, the introduction of this statement is the least of your worries.

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By whatdoyoumeanwashe
15th Mar 2024 21:41

If you can't or don't want to be helpful, please can you refrain from commenting? You are making outrageous assumptions about what I do or don't do, with no justification whatsoever. If you can't see the distinction between matters of demonstrable fact like who a company's shareholders are, and something abstract like another person's intentions, perhaps you'd be better suited to a simpler career.

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By FactChecker
15th Mar 2024 22:15

(deep, deep sigh)

1. You don't get to decide who replies or what they say (within the bounds of decency and criminal law) ... that's the nature of a public forum.
2. stepurhan has been a member for even longer than you, and is in the habit of posting a lot of replies (the vast majority of which people find very helpful).
3. I see nothing in their comment that warrants your extraordinary reaction.

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By whatdoyoumeanwashe
15th Mar 2024 22:58

He outright accused me of not doing my job properly, based purely on his own entirely incorrect inferences. His comment had nothing to do with my post. You're right I don't get to decide who replies or what they say, but what possible value is there in throwing baseless accusations at me?

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Replying to whatdoyoumeanwashe:
Stepurhan
By stepurhan
15th Mar 2024 23:17

If you can't understand that the shareholders could have changed without you knowing, and that persons of significant control is not dependent on just shareholding, then perhaps it is you that should seek a simpler career.

But, ignoring that, you are still relying on your client confirming that things are unchanged. If a share transfer form is completed, but you have not been informed about it then it would be easy to submit a confirmation statement that was incorrect. If you are confirming you have been told of all share transfers with your client then how does asking them to confirm this statement as well change things? As long as you honestly believe it is correct, based on information the client has given you, what difference does it make to you?

I should note, my comment was written on the assumption that you WERE confirming details with clients, but pointing out the problem you would have already if you weren't. Even if I wasn't, it is not your place to dictate how people respond on a public forum. If you think I've broken the site rules, report me. Otherwise, it is you who should not be posting questions here if answers you don't like are going to upset you so much.

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Replying to stepurhan:
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By whatdoyoumeanwashe
16th Mar 2024 00:28

Thank you for elaborating. I understand better where you are coming from now. You're right it's possible that a client fails to inform me of a share transfer and also fails to flag it in the confirmation statement data I send them. In that eventuality I can sleep easy. I think it's the wording of the statement that bothers me. On a VAT return there's a similar "I confirm" in ones own name, but it ends "to the best of my knowledge and belief" which is a lot more palatable. But clearly others aren't worried so that gives me comfort and I shall stop worrying myself.

Re your original reply - perhaps it was not your intention but it came across as very accusatory. I think I asked a legitimate question and I'd like to think this is a friendly forum on which to do so, as it usually is, without being patronised.

Thank you for taking the time to respond again.

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Replying to whatdoyoumeanwashe:
Stepurhan
By stepurhan
16th Mar 2024 20:52

whatdoyoumeanwashe wrote:

Re your original reply - perhaps it was not your intention but it came across as very accusatory. I think I asked a legitimate question and I'd like to think this is a friendly forum on which to do so, as it usually is, without being patronised.


It was not intended as accusatory, but your responses very much were. If you like to think of this as a friendly forum, then you are as responsible for that as I am. Automatically assuming the worst and writing a borderline abusive response is doing exactly the opposite of that.

You know what else would have helped make this a friendly forum. Skipping this entire paragraph where you effectively blame me for your over-the-top response. You literally said that I accused you of not doing your job properly, which I did not do. You were the one that misinterpreted my words to reach that conclusion.

Take some responsibility for your own actions.

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By bernard michael
16th Mar 2024 09:48

The answer's simple. Make the client complete the form, which gets rid of another piece of nonsense

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