Top Service News
Companies House changes will fail without reforms
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Government efforts to reform Companies House won’t achieve their aims without closing risky loopholes, insolvency and restructuring trade body R3 has warned.
The Economic Crime and Corporate Transparency Bill aims to address the misuse of UK company registrations and removals by reforming the powers of Companies House.
Nicky Fisher, Vice President of R3 said “The Bill won’t improve transparency over corporate entities and tackle economic crime while companies are dissolved and struck off the Companies House register with no investigation into the conduct of their directors. At the moment, anyone who is looking to avoid investigation can do this by waiting till their company is struck off the Register, as the option of restoring it via the courts to enable an investigation to happen is often too time consuming and expensive for the business’s creditors”.
Emma Reilly, MD of credit management specialists, Top Service Ltd, said “There is no doubt that some directors are taking advantage of the company dissolution process. We see it in the construction sector where a company has traded but then the directors fail to file a Confirmation Statement or accounts and the company gets struck-off and dissolved. When we know that a company is under threat of dissolution we will alert creditors so that they can oppose the striking-off. It would be better if there was a deterrent to abusing the dissolution process in the first place though”.
