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December 2009

 

Government begins consultation on misuse of the Registered Office

BIS Consulation DocumentThere is growing concern about the complaints that Companies House receives each year regarding the misuse of registered office addresses. This, at best, is an annoying problem for the companies involved but for several it will have been the basis of a company identity fraud. There is probably further misuse that is not reported to Companies House and probably misuse that is not known to the victims. Fraud is just one of a variety of motives.

Section 86 of the Companies Act 2006 requires every company to have a registered office to which all communications and notices may be addressed.  Apart from the requirement for the physical location of the office to be in the UK jurisdiction stated in its incorporation document no restrictions apply to the choice of address.  Many companies nominate their solicitor or accountant, and there are many other legitimate possibilities. 

Fraudulent or inaccurate material may be removed from the Companies House Register, but in the opinion of the Department for Business Innovation and Skills (BIS) the removal of a registered office address genuinely supplied by a company officer may not be removed in this way.  This can leave innocent businesses or individuals receiving invoices, correspondence and threats of legal action.  It can be, to say the least, very annoying.

BIS is considering a change to the law so that a registered office address can no longer be used where the occupier does not want it used for this purpose.  This could work by introducing a new statutory procedure under which the legal occupier of premises could object (by notice to the registrar of companies) to the use of the premises.

This step would of course have implications and safeguards would be necessary.  The proposal envisages that if the company does not change its registered office within the period required, does not apply to the court within the period required, or applies to the court but loses, the address on the register will cease to be the company’s registered office address.  Companies House will make a note on the company’s file (which will be visible to those searching the company’s records) to show that until further notice, documents may no longer be served on the company at that address and instead can be served on the company by placing a notice in the Gazette.

The new procedures would not leave shareholders and creditors in a worse position.  It would leave them with a way to serve documents on the company in place of the incorrect address.

BIS is consulting on the proposed changes and would welcome your views.  Consultation will end on 19th January and full details can be found by clicking here.


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