Not filing confirmation statements, annual returns or company accounts is a criminal offence under Section 451 of the Companies Act 2006. This constitutes a criminal offence and a director can be left with a criminal record as well as an unlimited fine. In certain cases, where a director may have more than one conviction this could also potentially result in disqualification proceedings being brought against that director.

All private limited and public companies must file their accounts at Companies House in accordance with the provisions of the Companies Act 2006.

If you are a director of the company, you are personally responsible for delivering your accounts before the time allowed runs out.

Extending the time for delivering the accounts

Companies should take appropriate measures to ensure their accounts are filed on time. However, if there are particular reasons why the accounts might be filed late you can apply for more time to file

your accounts if the deadline has not passed. An extension will only be granted if the reasons are exceptional though.

What are the consequences of not filing accounts?

Not filing confirmation statements, annual returns or accounts is a criminal offence and directors can be personally fined in the criminal courts.

If Companies House, choose to prosecute then the directors of that company will receive a postal requisition to attend at Cardiff Magistrates Court to face criminal proceedings. Thousands of company directors are prosecuted every year and it would appear that Companies House are taking a harsher stance – prosecutions have become increasingly common in recent years.

A director found guilty of an offence under this section is liable to an unlimited fine in addition to a daily default fine for continued contravention. The director is also left with a criminal record and if someone has more than one conviction, this can result disqualification proceedings being brought against the director to prevent them from acting as a director of a UK company.

The criminal record itself has practical consequences, for example it will have to be declared when travelling to certain countries and could be disclosed on certain DBS checks/vetting. Conviction for this offence has serious consequences for those who wish to travel to America. The consequences are particularly draconian for individuals who are directors of companies in the United States. The consequences of conviction could therefore be totally disproportionate and unanticipated by those behind the original legislation in the UK.

Any criminal proceedings for not filing company accounts is separate from any civil late filing penalties issued by Companies House against the company.

Defences to Companies House prosecutions for not filing accounts

These prosecutions are difficult to defend because the offence is a strict liability offence. If accounts are not on time, then an offence is committed unless the director concerned can demonstrate that they ‘took all reasonable steps for securing that those requirements would be complied with before the end of that period.’

There is also a further defence if it appears that the director acted “honestly and reasonably and that having regard to all the circumstances of the case he ought fairly to be excused”, however both of these defences set a high threshold.

Therefore, it is only in exceptional circumstances that directors are able to successfully be found not guilty.

What can be done?

In some cases, it may be possible to seek to persuade Companies House to discontinue proceedings. Every case is different and the strategy will depend on the specific facts of the case and so it is

important to seek legal advice at an early stage. We have experience where Companies House have decided to withdraw their action following our representations that a prosecution is not in the public interest having regard to the fact that all outstanding accounts have been filed.

In some circumstances, Companies House may also issue a compulsory strike-off notice against the company if it considers that the company is no longer in operation because documents have not been filed. Therefore, not filing accounts can lead to larger problems if this is not acted upon quickly.

It is crucial to seek legal advice as soon as possible. If you are facing prosecution for late filing of company accounts, please contact our team to discuss how Olliers can assist.