Late Filing of Accounts
Late filing penalties were introduced on the 1st July 1992 to encourage directors of limited companies to file their accounts on time because of the obligation to provide statutory information for the public record. A few years ago, before Companies House became computerised it used to take them twelve months or more to discover whether a particular company had filed its accounts late, but now with the advent of computerisation, they not only know when each and every company is one day late, they also have the right and the ability to issue automatic penalties. Section 242A of the Companies Act 1985, imposes an automatic penalty on any company that delivers its accounts to Companies House outside the statutory time allowed for filing.

The amount of the penalty is on a sliding scale as follows;

Private Companies have ten months after the end of the relevant accounting period to file its accounts at Companies House.

Public Companies have seven months after the end of the relevant accounting period to do likewise.

However, if the company's first accounts cover a period of more than 12 months, they must be delivered to Companies House within 22 months of the date of incorporation for Private Companies and 19 months for Public Companies.

A penalty imposed upon a Company for the late filing of accounts is a civil penalty and is payable by the Company. However, if the director of the Company fails to deliver accounts, he may be prosecuted in the criminal courts and a fine levied upon the director personally. There is therefore the risk to directors of incurring a criminal record and finding that a civil penalty must be paid in addition to a criminal fine for the same set of accounts.

Only under very exceptional circumstances will the registrar accept any mitigating factors for the late delivery of accounts to the extent that it is almost not worth enquiring.

If the filing deadline is close, we would advise that directors use a guaranteed delivery service rather than relying upon the postal service.

If your accounts are rejected by Companies House because of defects such as them not being signed, they will be returned for amendment. If they are subsequently returned to Companies House after the deadline for filing accounts, a penalty will be incurred.

Our Advice to You
1. Diarise the end of year as to when the accounts should start to be prepared and also diarise the deadline for filing accounts as appropriate for Private or Public Companies.

2. Make your Accountant or Auditor aware of the deadline for filing accounts and chase them regularly to prepare them.

Remember, it is the directors duty to file the accounts and the Company will be penalised for late filing of them. A penalty will not be issued to your Accountant but if your Accountant has acted negligently, it may be that you can invite them to pay the penalty.

Other Filings
There are many many provisions in the Companies act 1985 which require notification to be made to the Registrar of Companies in the prescribed form, usually within 14 days or one month.

In respect of each of those provisions there is a related subsection which states, "if default is made in complying with this section, every officer of the Company who is in default is liable to a fine and, for continued contravention, to a daily default fine."

It will be apparent from the above that fines are imposed upon officers of the Company rather than the Company and there is therefore personal liability. Furthermore, reference to "officers" means that Company Secretaries can be liable in addition to the directors of the Company.

Our Advice to You
Be aware of what statutory forms must be filed with Companies House and when, and if in doubt, seek legal advice.

We will be happy to advise on any aspect of the filing requirements with Companies House.