Companies House Prosecutions for non-filing of accounts

Anyone facing a prosecution for late filing of company accounts should seek immediate legal advice. The offence is punishable by way of a fine but under the provisions for Directors Disqualification, a director facing multiple convictions for this offence could be looked at by the Magistrates for consideration of disqualification as a director. Penalties for late filing of accounts were brought in in 1992 to encourage timely filing of accounts by directors. All companies are required to file their accounts and reports with Companies House annually. In accordance with the Companies Act 2006, private companies must file their accounts nine months after the end of the company accounting reference period (different rules apply for filing a company’s first annual accounts). If a director submits accounts late, the law imposes an automatic civil penalty.  However, it is the criminal prosecution that is of greater concern for directors.

Criminal prosecution

Failing to file accounts on time (also confirmation statements, annual returns) are a criminal offence under the Companies Act 2006. Directors are ultimately responsible for filing of accounts and if they do not then they could be personally prosecuted in the criminal courts. Non-filing of the above is separate and additional to automatic late filing penalties. Whilst there is no penalty for late filing of confirmation statements or annual returns, the registrar could initiate steps to strike off a company.

Defence

A defence to prosecutions for non-filing of accounts is if the director can show that they took “all reasonable steps” to file the accounts in accordance with the relevant date. However, this is a high threshold and is generally difficult to argue. It is often better to put mitigate and reduce the fine or to negotiate with the prosecution to try to argue that they should not proceed with the prosecution. A director found guilty of non-filing of accounts is liable to an unlimited fine in addition to the automatic statutory civil penalty. The director will also have a criminal record if convicted. If a director has multiple convictions, they could face directors disqualification proceedings.

How we can help?

We can advise on the strength of the evidence against a director and advise on the steps to take. We can negotiate with Companies House regarding the prosecution. We have experience where Companies House have decided to withdraw their action following our representations. Therefore, it is crucial to seek legal advice as soon as possible. If you are facing prosecution for non or late filing of company accounts please contact our team as soon as possible.