Corporate governance and compliance - Statutory filing and disclosure requirements

Learning Outcomes

This article outlines the principal statutory filing and disclosure requirements for private and unlisted public companies under the Companies Act 2006. After reading this article, you should understand the core obligations related to filing annual accounts, confirmation statements, and notifications of specific company changes with Companies House. You will also appreciate the requirement to maintain statutory registers, including the register of People with Significant Control (PSC). This knowledge is essential for applying the relevant legal principles to SQE1 assessment questions concerning corporate compliance and governance.

SQE1 Syllabus

For SQE1, you are required to understand the practical application of statutory filing and disclosure requirements. This includes identifying the necessary documents, understanding the relevant timeframes for filing, and appreciating the consequences of non-compliance for different types of companies.

As you work through this article, remember to pay particular attention in your revision to:

  • The requirement for companies to file annual accounts and reports, including basic content and deadlines.
  • The purpose and content of the annual confirmation statement.
  • Key event-driven filing requirements, such as changes relating to directors, share capital, and registered offices.
  • The statutory registers companies must maintain, particularly the PSC register.
  • The role of Companies House and the public nature of filed information.
  • Basic consequences of failing to meet statutory filing obligations.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

  1. Within what period must a private company typically file its annual accounts with Companies House after its accounting reference date?
    1. 3 months
    2. 6 months
    3. 9 months
    4. 12 months
  2. Which of the following events generally triggers an immediate filing requirement at Companies House (within 14 or 21 days)?
    1. Holding an annual general meeting.
    2. Appointing a new director.
    3. Declaring an interim dividend.
    4. Entering into a major commercial contract.
  3. What is the primary purpose of the confirmation statement?
    1. To report the company's annual profits and losses.
    2. To confirm the accuracy of information held by Companies House about the company.
    3. To register new charges created by the company.
    4. To provide details of resolutions passed by the shareholders.

Introduction

Compliance with statutory filing and disclosure requirements is a basis of corporate governance for companies registered in England and Wales. The Companies Act 2006 (CA 2006) imposes various obligations on companies to file specific information and documentation with the Registrar of Companies at Companies House, and to maintain certain internal registers. These requirements ensure transparency and accountability, allowing shareholders, creditors, and the public access to key information about a company's management, control, and financial standing. Failure to comply can lead to penalties for the company and its officers. This article details the main statutory obligations regarding filing and disclosure.

Statutory Filing Requirements

Companies must submit regular and event-driven filings to Companies House. These ensure the public record is accurate and up-to-date. The main filings include annual accounts and the confirmation statement.

Annual Accounts

Most companies are required to prepare and file annual accounts for each financial year (s 394 CA 2006). These accounts must provide a 'true and fair view' of the company's financial position and performance (s 393 CA 2006).

Key Term: Accounting Reference Date (ARD)
The date to which a company's annual accounts must be made up. Usually, this is the anniversary of the last day of the month in which the company was incorporated (s 391 CA 2006). Companies can change their ARD by filing the appropriate form.

The accounts typically include a balance sheet (showing assets, liabilities, and equity at the ARD) and a profit and loss account (showing income and expenditure over the financial year). Different rules regarding the content and complexity of accounts apply depending on the size and type of the company (eg small companies have less detailed requirements).

Deadlines for filing annual accounts are strict:

  • Private companies: 9 months after the ARD (s 442 CA 2006).
  • Public companies: 6 months after the ARD (s 442 CA 2006).

Failure to file accounts on time results in automatic civil penalties for the company and potential criminal liability for the directors.

Confirmation Statement

Every company must deliver an annual confirmation statement to Companies House (s 853A CA 2006).

Key Term: Confirmation Statement
An annual filing confirming that the information Companies House holds about the company (e.g., registered office, directors, statement of capital, PSC information) is correct as at the confirmation date. Changes should be reported either before or at the same time as the confirmation statement.

The statement must be delivered at least once every 12 months. The due date is usually the anniversary of incorporation or the date the last statement was made. It must be filed within 14 days of the end of the review period. Failure to file the confirmation statement is a criminal offence committed by the company and every officer in default. Persistent failure can lead to the company being struck off the register.

Event-Driven Filings

Beyond annual requirements, certain events trigger obligations to notify Companies House, typically within 14 or 21 days. This ensures the public register reflects significant changes promptly. Key examples include:

  • Change of Registered Office Address: Must be notified on the relevant form (s 87 CA 2006). The change is only effective upon registration by Companies House.
  • Appointment/Termination of Directors or Secretaries: Appointments, terminations, and changes in particulars (e.g., service address) must be notified within 14 days (ss 167, 276 CA 2006).
  • Allotment of Shares: A return of allotment (Form SH01), including an updated statement of capital, must be filed within one month (s 555 CA 2006).
  • Creation of Charges: Most charges created by a company must be registered within 21 days beginning with the day after the charge is created (s 859A CA 2006). Failure renders the charge void against liquidators, administrators, and creditors (s 859H CA 2006).
  • Resolutions and Agreements: Certain resolutions (e.g., special resolutions, some ordinary resolutions like authority to allot shares) must be filed within 15 days (ss 29, 30 CA 2006). Changes to articles must also be filed (s 26 CA 2006).
  • Change of Company Name: Requires a special resolution and filing of the relevant form (NM01) (ss 77-79 CA 2006). The change is effective upon issue of the altered certificate of incorporation.

Worked Example 1.1

Tech Innovate Ltd, a private company incorporated on 10th March 2023, appoints a new director, Sarah, on 1st June 2024. The company secretary forgets to file the notification form until 20th June 2024. What is the consequence?

Answer: The company and its officers (including the secretary and potentially the directors) have committed a criminal offence under s 167 CA 2006 because the notification (Form AP01) was not filed within 14 days of Sarah's appointment (i.e., by 15th June 2024). They could face fines.

Statutory Registers

In addition to filings at Companies House, companies must maintain several statutory registers, keeping them updated and typically available for inspection at the registered office or a Single Alternative Inspection Location (SAIL). Alternatively, private companies can elect to keep certain information solely on the public register at Companies House.

Key Term: Statutory Registers
Internal records required by the CA 2006, detailing key aspects of the company's structure and governance, such as membership, directors, and charges.

Key registers include:

  • Register of Members (s 113 CA 2006): The definitive record of who owns the company's shares.
  • Register of Directors (s 162 CA 2006): Details of current directors.
  • Register of Directors' Residential Addresses (s 165 CA 2006): Kept separately and not generally available for public inspection.
  • Register of Secretaries (s 275 CA 2006): Required only if the company chooses to have a secretary.
  • Register of People with Significant Control (PSC Register) (s 790M CA 2006): Records individuals or relevant legal entities (RLEs) who meet specific conditions relating to share ownership, voting rights, or influence over the company.

Key Term: PSC Register
A register identifying individuals and relevant legal entities with significant control over the company, typically holding more than 25% of shares or voting rights, or the right to appoint/remove a majority of directors.

Failure to maintain these registers accurately is an offence.

Worked Example 1.2

Alpha Holdings Ltd has three shareholders: Shareholder A (30%), Shareholder B (30%), and Shareholder C (40%). All are individuals. Who should be listed on Alpha Holdings Ltd's PSC register?

Answer: All three shareholders (A, B, and C) should be listed on the PSC register. Each holds more than 25% of the shares/voting rights, meeting one of the conditions for significant control under the CA 2006.

Corporate Governance and Disclosure

Statutory filing and disclosure requirements are essential to the UK's corporate governance framework. They provide the baseline transparency upon which codes like the UK Corporate Governance Code (for premium listed companies) build. While the detailed requirements of the UK Corporate Governance Code are beyond the scope of this article's focus on statutory duties, it is important to recognise that public disclosures mandated by the CA 2006 (like accounts and director details) enable stakeholders to monitor the company's governance and performance.

Larger companies, particularly quoted companies, face additional statutory disclosure requirements, such as preparing a detailed Directors' Remuneration Report and a Strategic Report containing non-financial information (ss 414A, 420 CA 2006). These improve accountability and provide a fuller picture of the company's operations and strategy.

Revision Tip

For SQE1, focus on the statutory requirements under the CA 2006 for private and unlisted public companies. While awareness of the UK Corporate Governance Code is useful context, detailed knowledge is typically relevant only for listed companies, which are largely outside the SQE1 syllabus focus. Ensure you know the core CA 2006 filing obligations.

Consequences of Non-Compliance

Failure to comply with statutory filing and disclosure requirements can have serious consequences for both the company and its officers (directors and the secretary, if appointed).

  • Financial Penalties: Late filing of annual accounts attracts automatic civil penalties from Companies House, which increase over time.
  • Criminal Offences: Many breaches (e.g., failure to file the confirmation statement, failure to maintain registers, failure to notify director changes) are criminal offences, potentially leading to fines for the company and its officers.
  • Director Disqualification: Persistent breaches of filing requirements can lead to directors being disqualified under the Company Directors Disqualification Act 1986.
  • Striking Off: Companies House may strike the company off the register for failure to file documents like the confirmation statement or accounts, leading to the company ceasing to exist and its assets passing to the Crown (bona vacantia).
  • Loss of Validity: Failure to register charges within 21 days makes the security void against insolvency practitioners and creditors.

Exam Warning

Compliance with filing deadlines is critical. SQE1 questions might test your ability to identify the correct deadline or the consequences of missing it. Remember that failure is often an offence committed by both the company and its officers.

Key Point Checklist

This article has covered the following key knowledge points:

  • Companies must file Annual Accounts with Companies House, typically within 9 months (private) or 6 months (public) of the Accounting Reference Date (ARD).
  • An annual Confirmation Statement must be filed to confirm the accuracy of information held by Companies House.
  • Specific event-driven filings are required for changes like director appointments/terminations, share allotments, charge creation, and registered office changes, usually within 14 or 21 days.
  • Companies must maintain internal Statutory Registers, including the Register of Members, Register of Directors, and the PSC Register.
  • The PSC Register identifies individuals and entities with significant control (typically >25% shares/voting rights).
  • Failure to comply with filing requirements can lead to penalties, criminal liability for officers, and potentially the company being struck off.
  • Failure to register charges within 21 days renders the security void against liquidators/administrators/creditors.

Key Terms and Concepts

  • Accounting Reference Date (ARD)
  • Confirmation Statement
  • Statutory Registers
  • PSC Register
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