HC Deb 11 December 1985 vol 88 cc624-5W
Mr. Knowles

asked the Secretary of State for Trade and Industry what progress has been made by the Companies Registration Office towards meeting the target for improving the reliability of the register of companies.

Mr. Howard

As was reported to the Public Accounts Committee on 20 June 1984, the Registrar of Companies is aiming to achieve compliance by 80 per cent. of the companies on the register by the middle of 1986.

In May 1984 an estimated 457,000 companies were in default. Only 60,000 of those defaults remain unrectified and the majority of the companies concerned are likely to be struck from the register as defunct. Since then, the Registrar has sent out over 1 million letters to defaulting companies and their directors, has prosecuted over 1,500 directors for failure to deliver accounts and-or returns and has struck off 64,000 companies identified as defunct. In addition, a programme of reminders has begun with the aim of bringing to the attention of directors of companies their filing obligations before companies go into default. A total of 286,000 such letters has been despatched.

Of the 1,004,000 companies on the register at 29 November 1985, 66,000 are in liquidation and will ultimately be removed from the register. A further 143,000 are in the course of being struck off the register. There remain 795,000 active companies; 592,000 (74 per cent.) of these are currently up to date with filing accounts and 631,000 (79 per cent) are up to date with their annual returns. A total of 541,000 (68 per cent.) are in full compliance, some 165,000 more than in May 1984.

The proportion of companies in default for long periods has also decreased. In May 1984 an estimated 400,000 companies were in default for more than six months, compared with the present figure of 150,000.

With over 1 million companies now on the register, the 80 per cent. compliance target effectively means that over 800,000 companies would have to be up-to-date with their filing of both accounts and returns. As there are currently over 200,000 companies in liquidation or in the course of dissolution, I think it more sensible to express the target in terms of the number of active companies and, in addition, to require the Registrar to give particular priority to eliminating the number of companies in default for more than six months.

Progress has so far been considerable. Full compliance now stands at 68 per cent. of active companies. 80 per cent. by mid-1986 is an ambitious target and I am satisfied that the Registrar and his staff are making every effort to reduce the amount of arrears with the continuing cooperation of the accountancy profession, which I gratefully acknowledge.