Company Health Check

Do your clients’ Limited companies comply with company law?

As a company law agency we always do a full review on the companies that we are working on to see if they are compliant before commencing the work.
A high proportion are not, and we have seen many instances of problems arising on the sale of a business or on investigation by HMRC.

Common scenarios include: –

  • Shares being allotted and then ignored on all subsequent Confirmation Statements/Annual Returns and Accounts. These shares are issued and valid so should form part of the issued share capital but if unreported the company is non-compliant
  • Shares allotted on a company with pre-2006 Companies Act Articles and exceeding the authorised share capital. The authorised share capital still exists on pre-2006 companies unless changed by Resolution
  • Share restructures created by filing a form SH01 only, with no details of the rights. No resolutions no forms to reclassify and no amended Articles stating differential dividends or other rights
  • Purchase of own shares dealt with by filing one form with no other paperwork. No resolution(s) or contract created. Failure to do this procedure correctly will invalidate the transaction
  • Reductions dealt with by one resolution only with no Companies House forms or statement of solvency

These are just a few scenarios and it’s quite common to see these mistakes. Companies House accept all documents in good faith and leave it to others to make a complaint.

Ramifications of non-compliance

  • If a complaint is lodged then the company could receive a fine or prosecution
  • The Directors are also liable for prosecution
  • If the company is being sold it is always checked for compliance, so non-compliance could hold up the sale
  • If HMRC investigates the company it could be a major issue if the company hasn’t got the correct wording to allow differential dividends

How can we help?

For a small fee of £15.00 + vat per company we will complete a full company Health Check and produce a Report.

This will include: –

  • Review of the company from incorporation
  • Review of the Articles (including the share capital)
  • Ensure all paperwork for all events have been completed correctly and comply with company law
  • We will also issue recommendations if the company is non-compliant

For companies over 20 years old it may be necessary to obtain a DVD history and so we will advise an extra fee of £25.00 for the registrars’ fee for the DVD.

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If you have multiple companies you wish to check, or you require further information feel free to contact Steve Blackmore on 029 2022 9080, or email steve@fcls.co.uk