All limited companies are required to file a confirmation statement each year. In this blog, we will outline some of the consequences of failure to submit a confirmation statement. But first let’s recap the purpose of a confirmation statement.
Why do companies need to file a confirmation statement?
A confirmation statement is essentially a confirmation by company directors that the information held on a company by Companies House is accurate and up to date. All companies are required to file confirmation statements – including those which are not trading or are dormant.
Even if all the information is exactly the same, directors must file a confirmation statement at least once every 12 months. Each 12 month period is known as a review period. Failure to meet the submission deadline can result in a variety of problems for the company and its directors.
What happens if you do not file a confirmation statement?
Company directors have a legal duty to file confirmation statements under section 853A of the Companies Act 2006. Failure to do so can result in personal liability, fines, prosecutions, and even the company being struck off the register.
Failure to file a confirmation statement is dealt with by section 853L of the Companies Act 2006. Under this section, if a company fails to deliver a confirmation statement on time, an offence is committed by:
- the company,
- every director of the company (including shadow directors),
- in the case of a private company with a secretary or a public company, every secretary of the company, and
- every other officer of the company who is in default.
If a company does not file a confirmation statement, both the company and its officers may be subject to prosecution as a result of breaching the Companies Act 2006. Fines of up to £5,000 can be levied on each of the company officers. Directors can receive disqualification orders, precluding them from holding company officer posts for a certain number of years. The company can also be struck off the register.
Failure to file confirmation statements is a criminal offence and directors can be personally fined in the criminal courts. Any criminal proceedings for not filing confirmation statements are separate from – and in addition to – any late filing penalties issued by Companies House against the limited company.
Aside from the statutory penalties, failure to maintain the accuracy of company information held by the registrar of companies can affect the creditworthiness of a company.
Furthermore, any discoveries of incorrect information held on the public register during a due diligence exercise could lead to problems with securing investment or succeeding in planned takeovers or mergers.
What happens if you file late?
If a company does not file a confirmation statement by the relevant deadline, it can still be filed late. There are no automatic financial penalties for failure to file a confirmation statement on time.
Companies House will generally issue an automatic warning if a filing deadline is missed. This will serve as an initial reminder and provide a chance for the company to meet its filing responsibilities without being penalised.
But if reminder notices are ignored, Companies House will eventually take legal action against the company and its officers. As discussed above, this can result in fines for company directors and the company being struck off the register, as well as director disqualification.
How can I make sure that I file on time?
Company directors need to ensure they file a confirmation statement at least once in every 12 month review period.
For new companies, this review period begins on the date of the company incorporation. For companies that have already submitted a confirmation statement, review periods begin on the date the last confirmation statement was submitted. Therefore, the deadline can vary if the confirmation statement is filed early.
The company must file a confirmation statement at least 14 days after the end of each relevant review period. Although it can be submitted earlier, filing a confirmation statement early will automatically trigger the next 12 month review period. Therefore, there is generally no obvious reason to file a confirmation statement early.
However, submitting a confirmation statement earlier in the review period can help to ensure it is submitted in good time. Preventing any rush can also reduce the likelihood of mistakes creeping in.
Another method of avoiding confirmation statements being missed or overlooked is to sign up for email reminders from Companies House. Once set up correctly, this service will send out an email notification reminder regarding the due date of a confirmation statement.
Aside from their duty to file a confirmation statement each year, company directors must also remember to pay the annual fee in respect of confirmation statements. This fee covers the filing of any confirmation statements submitted during a certain period of time, known as the payment period – distinct from the review period.
In respect of new companies, the payment period runs for 12 months from the company incorporation date. For older companies, the payment period is 12 months from the date of the last payment.
Please note: Companies can file confirmation statements multiple times during any specific payment period; there is no additional payment. The annual fee only needs to be paid the first time a company files a confirmation statement in each payment period.
What information do I need to include when I file a confirmation statement?
The first step is to check the details of your company currently held by Companies House, which can be viewed online. Ensure that any company details which are out of date are updated as appropriate. Some of these details can be updated using the confirmation statement, including:
- Principal business activities or standard industrial classification (SIC)
- Statement of capital
- Trading status of shares
- Exemption from keeping a register of people with significant control (PSC)
- Shareholder information
Other information may need to be updated using the Companies House WebFiling service, such as:
- Registered office address
- Single Alternative Inspection Location (SAIL)
- People with Significant Control (PSC)
- Company directors and secretary
Even if there are no changes to report, it is still necessary to file a confirmation statement.