§ Mr. Austin MitchellTo ask the President of the Board of Trade (1) how many incorporated companies have failed to file accounts at Companies House for each year since 1985;
(2) what action he takes when a company fails to file its annual return within the prescribed period;
(3) if he will provide a list of the number of companies which have been fined or have been disincorporated as a result of failure to file annual returns for each or any of the years since 1985.
§ Mr. Neil HamiltonThese matters are for Companies House. I have therefore asked the Chief Executive, David Durham, to write to the hon. Member.
Letter from D. Durham to Mr. Austin Mitchell, dated 18 March 1994:
Mr. Hamilton, Parliamentary Under Secretary of State for Corporate Affairs, has asked me as Registrar and Chief Executive of Companies House Executive Agency, to reply to the following Parliamentary Questions which you tabled:*How many incorporated companies have failed to file accounts at Companies House for each of the years since 1985.*What action is taken when a company fails to file its annual return within the prescribed period.*How many companies have been fined or have been disincorporated as a result of failure to file annual return for each or any of the years since 1985.The statistical information which you have requested is published by the President of the Board of Trade in the general annual report of matters within the Companies Act, which is laid before both Houses of Parliament pursuant to section 729 of the Companies Act 1985. However, for your convenience, I have extracted the relevant figures from the reports for each of the years in question. I shall now attempt to clarify the remaining points which you have raised.Companies House tries very hard to ensure that each individual company is reminded of its obligation to deliver annual returns and accounts. On average, some two million letters are issued each year, as a timely reminder before documents become due and, if needs be, in an attempt to secure compliance of the law where documents are found to be outstanding.Where it is established, having issued reminders, that a defaulting company remains in business or in operation, every effort is made to encourage the company to file with the minimum of delay. Regrettably, however, it is sometimes necessary to institute criminal proceedings in order to secure delivery of the required documentation. Failure to file annual returns or accounts is a criminal offence and, on conviction, a fine of up to a maximum of £5,000 can be imposed upon directors personally by the Court for each separate offence.In addition, where annual accounts are delivered outside the statutory time provided by the Companies Act, the company itself is liable to a civil penalty of up to £1,000 for private companies and £5,000 for public companies, depending on the lateness of the 229W accounts. I must stress, however, that the system of late filing penalties is designed to encourge timely filing, with the ultimate aim being that no penalties are levied because all companies file on time. There is no late filing penalty payable in respect of the late delivery of annual returns.With regards to disincorporation, or dissolution of companies. Section 652 of the Companies Act 1985 provides me with authority to strike off and dissolve a company where I have reason to believe that it is no longer in business or in operation. Before dissolving a company, I am required to issue a number of notices to the company at its registeredd office address, inquiring if it remains in business or in operation. In the absence of any response, a notice is published in the London Gazette warning of my intention to strike the name of the company off the register. A copy of this notice, which is also sent to the company, is placed
Compliance rates for annual returns and accounts, 1984 to 1993 Thousands of companies Percentage of companies on effective register
Companies up-to-date in filing: Effective register Compliant annual returns Default annual returns Compliant accounts Compliant for both returns and accounts In default for both return and accounts (thousands) (thousands) (percentage) (thousands) (percentage) (thousands) (percentage) (thousands) (percentage) (thousands) (percentage) England and Wales May 1985 810 544 67.1 266 32.9 518 63.9 471 58.1 — 41.9 June 1986 785 692 88.2 93 11.8 663 84.4 623 79.4 — 20.6 June 1987 824 731 88.8 93 11.2 699 84.9 665 80.7 — 19.3 June 1988 872 775 88.8 97 11.2 742 85.1 697 79.9 — 20.1 June 1989 936 817 87.3 119 12.7 787 84.1 734 78.4 — 21.6 June 1990 964 868 90.0 96 10.0 827 85.7 784 81.3 — 18.7 June 1991 931 799 85.8 132 14.2 802 86.1 725 77.9 — 22.1 June 1992 921 825 89.6 96 10.4 844 91.6 781 84.8 — 15.2 June 1993 900 821 91.2 79 8.8 848 94.2 792 88.0 — 12.0
Convictions by the Department under the Companies Act 1985–93 (inclusive) Directors convicted Companies involved 1985 1,699 775 1986 1,694 899 1987 1,628 927 1988 1,448 1,016 1989 1,269 956 1990 1,245 1,005 1991 1,581 1,284 1992 1,549 1,080 1993 1,897 1,168
Companies removed from the registers, 1985 to 1993 Number 1985 51,100 1986 95,500 1987 74,300 1988 67,200 1989 103,000 1990 82,726 1991 95,886 1992 128,760 1993 108,798