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Companies House plans to wipe details

2nd Aug 2016
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Today's front page of The Times reports that Companies House is considering wiping off from the register details of millions of companies that have gone into liquidation or were 'struck off' more than six years ago.

Under current rules application to reinstate a company can be made at any time within 20 years (subject to certain conditions). Hence records on all companies remain on the register for that period of time.

Companies House's considerations are as a result of representations from former directors who want to 'move' on from being associated with such dissolved companies, many of which might have been liquidated/'struck off' through no fault of the directors themselves. Critics are worried that such a move will obstruct investigations into major fraud, money laundering and corruption as well as be contra to the governments dream of greater 'corporate transparency' as shown by the introduction of the PSC (register of persons with significant control').

Why six years?

The representations against the records being held for so long quote the Data Protection Act 1998 but that gives no date by which personal records should be destroyed; it just states that authorities should not hold personal information 'for longer than necessary'. Reference to six years can be found in two separate acts - the Insolvency Act 1986 (IA) and the Small Business, Enterprise and Employment Act 2015 (SBEEA) which refers to pre-pack administrations and the sale of company assets to ‘connected persons’.

The regulations contained in the IA deal with pheonix trading companies and prohibit any person who has been a director or shadow director of a company at any time for a period of 12 months preceding that company entering liquidation from carrying out the following for a period of five years following liquidation:

  • Be a director of a company that operates with a similar name or trading style (so close to infer an association with the liquidated company)
  • Be involved in any way (whether that be directly or indirectly) in the promotion, formation or management of another company with a similar name or trading style
  • Be involved in any business which trades in a similar trading style as the company which entered liquidation

The impact of remaining on the register

The sole function of Companies House is to keep a register of all incorporated companies in the UK. It can take action against companies for failure to deliver documents under the Companies Act 2006 (which can include prosecuting its directors) but that is usually as far as it goes. Practically directors are only brought to account by liquidators (and, following the s 117-119 SBEEA 2016, administrators) who need to prove that a director has wrongful and fraudulently trading and not acted in the interests of creditors (s216 IA 1986) (usually demonstrated by cash being withdrawn when it was known that the company was insolvent). This can be a difficult, time consuming and costly process, invariably only resulting in a director not being permitted to be a director in the future. However, as the directors' personal details remain on the Companies House Register to be viewed by anyone who logs on site the belief is that there may well be a stigma in being associated with a company that has gone into liquidation which might affect a directors' future plans and work e.g. it will be all the more difficult to get a loan for the starting up of a new business.

Not all directors' details are shown on the public record e.g. (again following representations), a director’s full date of birth is no longer given, the reason being that the government viewed this as being a key piece of information that could potentially be used in identity fraud. A director’s usual residential address must be provided to Companies House but it will only be placed on public record if the address is used as a registered office or the director’s service address, otherwise this information will only appear on a restricted private register held at Companies House and only made available to credit reference agencies and specified public authorities.

However, if someone really wants to find out whether a person is still alive and living at a particular address the internet is only a click away, their basic personal financial records are available via one of the Credit Reference Agencies (e.g. Veriphy) for £5 but it is the association with a liquidated or 'struck off' company that is the central concern.

Who is for and who is against the removal?

The Times comments that the names of the former bankrupt Dominic Chappell's past dissolved companies would have been wiped off the register under the new rule “making enquiries into his past dealings more difficult”. As such the Serious Fraud Office and National Crime Agency are thought to be against the move (although no formal comments have been issued).

This move to 'wipe' off some companies does not appear to tie in with the future plans of Companies House stated only a few days ago in a blog written by the new director of strategy and communications the intention being to “link better with other parts of government, and (consider how) the company register can support corporate transparency. It might see the register expanding to include a wider range of company information”.

Comment

  • 20 years is too long a time to be associated with a company from what could be termed as being from another era. 20 years could possibly encompass the whole of a directors' working life. There again, six years is too short a time span as there would be no way of knowing whether that director set up a company, liquidated it and then started again so debts are more likely to be written off/unpaid
  • Whatever Companies House says public record of a directors' personal details – address, month and year of birth- are too intrusive
  • As there is already a 'restricted private register' why not use that register to more effect? Yes, keep all the information required as per the new confirmation statement for 20 years to be available to such bodies as the SFO but not show on the public register for all to see or show for only six years
  • Interested government bodies must surely be able to obtain the details they require from other government sources e.g. HMRC
  • There could be a case for reduced detail to be placed on the public register – e.g. show the name, the fact that the company has gone into liquidation/being struck off, the last registered address but not show the name or address etc of the directors involved. If someone really wanted to investigate further there are other sources of information available
  • There are no plans for a consultation on this important move – this needs to be addressed

Replies (15)

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By jon_griffey
02nd Aug 2016 18:15

Never mind this, the priority of Companies House should be to redact personal details from the public register as this is a fraudsters free for all.

They made a token effort recently to remove the day in the directors date of birth, but this is in most cases ineffective, as the full date of birth is still shown on the previous annual return.

In many cases, an individual director's name, home address, date of birth, a sample of their signature and identity the company's bankers is freely available to any scammer worldwide who cares to search on the beta service.

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Replying to jon_griffey:
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By rememberscarborough
03rd Aug 2016 08:14

Directors are entitled to some privacy but when you opt to take advantage of limited company status then you agree that the public has certain access to your business details. If you want more privacy there are other options but with a heightened degree in risk.

Six years is far too short a period to protect the public from so many con artists using the protection of limited company status to get away with what appears to be legalised theft.

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Replying to jon_griffey:
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By BlueNose1812
03rd Aug 2016 11:53

Just as it is when they sign a cheque and also give their bank account details and specimen signature!

There's too much security angst in the world today.

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Replying to jon_griffey:
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By Queni
10th Aug 2016 16:03

I agree. I think that the problem is that the new Companies House website makes it far to easy to obtain this sensitive and private personal data.

The argument that you accepted that this information would be made public when you took on the role of a company director does not hold up for me. If I became a director 20 years ago I was aware that someone could make an effort to obain the information but I did not agree to have my personal details published on the internet. Newly appointed directors use the company address not their personal addresses but why should long serving and former directors be disadvantaged in this way?

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By alan.falcondale
03rd Aug 2016 11:32

Does one not have to take into account also the trade of the limited companies for records retention policy?
e.g. the records retention for Asbestos data is a lot longer than 6 years (life of the individual?)

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By FionaMacCarthy
03rd Aug 2016 11:48

Suggest
10 years retention, as 6 too short and 15/20 too long
Directors name accompanied by first half of post code at most should be disclosed.
Not home address as if fraudsters are likely to hang around at same abode anyway.
DoB is not a matter for public disclosure other than tombstone engraver.
Horrified by thought of my signature in public domain.

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7om
By Tom 7000
03rd Aug 2016 12:30

Dont you have 2 signatures the proper one and the squiggle you put on work/ public work so you know the difference

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By sherodwilliams
03rd Aug 2016 12:38

I think that 10 years is more reasonable for many of the reasons stated in comments already posted. Surely the idea is to protect the good guys from the bad guys? If someone is jailed for a serious financial crime and serves 7 years. It is likely that he can re-appear with a newco almost with impunity and eg; defraud a whole new set of people because they cannot check him out thoroughly. This is nothing to do with entrepreneurship. If a so called "entrepreneur" has 5 failed companies in 5 years, then my argument is one of competence and should the public not be entitled to their evidence based opinion on that?

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By Ian McTernan CTA
03rd Aug 2016 12:56

I'm in favour of the '6 years publicly held, forever held in the restricted private register' suggestion.
This allows people to move on with their lives but keeps the records for more serious investigations (which can take years in themselves).

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By keithas
03rd Aug 2016 14:20

"many of which might have been liquidated/'struck off' through no fault of the directors themselves".
As compliance with Cos House requirements is part of a director's duties, I'm not sure that this statement can ever be true.
To me, this is part of a general relaxation of standards which companies were once required to adhere to. This follows the route taken with the banks and will, no doubt, end with similar consequences.

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Big Daddy's Diner
By mookgirluk
03rd Aug 2016 16:35

All of this information has been publically available since the inception of Companies House.

You might of had to go to Companies House, request the records and sit at a microfiche reader but it was all there. Full Name, date of birth, nationality, home address, occupation.

In recent years the ability to use a service address for the public record and hide the residential address has come into force, as has the partial suppression of date of birth.

Limited liability has always come at the price that certain information must be publically available.

People didn't seem to mind this information being public when it took a bit of work for someone to find it. It appears the issue is they just don't like people being able to find it easily.

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Replying to mookgirluk:
By jon_griffey
03rd Aug 2016 17:08

mookgirluk wrote:

All of this information has been publically available since the inception of Companies House.

You might of had to go to Companies House, request the records and sit at a microfiche reader but it was all there. Full Name, date of birth, nationality, home address, occupation.

In recent years the ability to use a service address for the public record and hide the residential address has come into force, as has the partial suppression of date of birth.

Limited liability has always come at the price that certain information must be publically available.

People didn't seem to mind this information being public when it took a bit of work for someone to find it. It appears the issue is they just don't like people being able to find it easily.

This is exactly the point. In the past someone would have had to spend time and money to perform a company search to attempt a fraud. That set the bar reasonably high. Now fraudsters have access to this information for free from the comfort of their boiler room anywhere in the world which gives them very low hanging fruit.

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By lawco
03rd Aug 2016 17:03

Madness! The issues that will be avoided should not be avoidable and "go with the territory" of operating a limited company. If Companies House goes ahead, unless legislation is brought in to prevent it, will there not be firms who make it their business to download all company information and then offer it for sale, much as Companies House does at the moment I guess!

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By mickeyparish
04th Aug 2016 09:51

This is a bad move - eradicating history which could be useful to generations of future economists and social historians is unnecessarily destructive, particularly when data storage is getting cheaper all the time. Directors of companies are part of public life whether they like it or not and have to live by the consequences of being so.

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By AndrewV12
17th Nov 2016 15:48

I think a six year period is reasonable, bearing in mind if you want some info on a liquidated Company or dissolved Company it will probably be on the web...somewhere.

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