What Happens if You Don’t File a Confirmation Statement?

Every year, all limited companies must provide a confirmation statement. This blog will research what happens if you don’t file a confirmation statement. But Let’s review, what is a confirmation statement and its goals first.

What is a Confirmation Statement?

Here we will explain what a confirmation statement is in short before going towards the details of what happens if you don’t file a confirmation statement. Every year, all companies and limited liability partnerships (LLPs), including dormant or non-trading, submit the Confirmation Statement (Form CS01) to Companies House. This statement is submitted at least once every 12 months to make sure that the data Companies House has, is correct and current. An application must be submitted to verify the accuracy of the company’s data, even if nothing has changed during the verification period.

As of March 5, 2024, all businesses and limited liability partnerships include a “Statement of Lawful Purpose” with their Confirmation Statement attesting to the legality of their upcoming operations. A summary of the company’s essential data, such as its registered office address, directors’ and shareholders’ information, share capital, SIC code, important controllers’ information, and registered email address, is included in the Confirmation Statement.

Why do Companies Need to File a Confirmation Statement:

To make sure that the data kept by Companies House is correct and current, businesses must submit a confirmation statement. This document serves as the directors’ certification that the company’s important information, including the registered office address, director and shareholder data, SIC code, and the individuals with substantial control, is accurate. There may be severe repercussions for the company and its directors if a confirmation statement is not filed within the allotted period. These may consist of monetary fines, a decline in goodwill, and possible legal action, such as deregistration. Frequent filings guarantee that the business continues to abide by UK corporate regulations and help to maintain correct records.

When is the First File Confirmation Statement Due?

Not more than one year and thirteen days after the date of establishment, the first file confirmation statement must be filed. Then, every year, the following statements are executed.

For Example:

A company that was incorporated on January 02, 2023, would have to file its first confirmation statement by January 15th, 2024, and after that, it would have to file them every year.

How to File a Confirmation Statement?

Before sending the electronic confirmation application to the Registrar of Companies, you must verify that the company’s registration details are accurate or change any outdated information. This guarantees that the records of your business are correct and current. You should verify the following details:

• Officers (Directors and Company Secretary if appointed)
• Registered Office Address
• Standard Industrial Classification (SIC) Code
• Legal Record Address
• Registered Office, SAIL Address, or Companies House
• Table of Interest (Share class, rights, number and value of shares, number of outstanding shares)
• Share capital information
• Members  (Limited liability partnership members, guarantors, or shareholders)
• Persons with Significant Control (PSC)
• Status of Share Trading ( Whether or not they are permitted to trade on the market)  Registered Email address
• Certain information cannot be changed in this way, even if you can immediately amend the SIC code, share capital, and shareholder details in the confirmation statement. These consist of:
• Before these modifications may be confirmed on the Verification Statement, you must submit the relevant forms individually. You can use GOV.UK to amend your registered company email address online.

You must fill out the Companies House CS01 form and include the full name, registration number, and confirmation date of the company if you are applying by mail. Should the SIC code, shareholders, share capital, or share trading status have changed during the past 12 months, you will need to finish the form’s sections 1-4. Before submitting your application for confirmation, you must disclose any further modifications individually.

What Happens if You Don’t File a Confirmation Statement?

Section 853A of the Companies Act 2006 mandates that directors of the company file confirmation statements. And What happens if you don’t file a confirmation statement? Here is the answer, Personal accountability, fines, legal action, and even the removal of the business from the register may follow failure to comply with your statement

Section 853L of the Companies Act 2006 tells us what happens if you don’t file a confirmation statement. According to this clause, a business commits an offence if it fails to provide a confirmation statement on time by:

The Business

• All of the company’s directors, including shadow directors
• Each of the company’s secretaries (if any)
• Each additional corporate officer who is in arrears
• A company and its officers could face punishment if they fail to file a confirmation statement because of breaching this Act.
• Each of the corporate officers may be subject to fines.
• Directors may be subject to disqualification orders that prohibit them from serving as company officers for a predetermined period. The business may also be taken off the registry and dissolved by force.
• It is a crime and directors may get a penalty in criminal courts for not filing a confirmation statement. Criminal charges for failing to file confirmation statements are distinct from and additional to any late filing fines imposed on the limited business by Companies House.

A company’s creditworthiness may be impacted in addition to the statutory fines if corporate information recorded at Companies House and published on the public register is not kept up to date. Issues obtaining investment or completing proposed takeovers or mergers may arise if a due diligence effort reveals outdated information on the public register.

Is There a Way to Avoid the Penalty?

Do you know what happens if you don’t file a confirmation statement? It is a great offence and causes penalties but to get rid of these penalties, you must provide a good cause for your delay if you miss a filing date. You must demonstrate that uncontrollable circumstances kept you from filing on time to avoid a penalty. An emergency, a catastrophic illness, or a loss are all acceptable explanations. It’s critical to back up your assertion with pertinent proof. If you can demonstrate that your delay was caused by unavoidable circumstances, you might be able to appeal a late filing penalty in particular circumstances. To learn more about appeals, go to gov.uk, the official government website.

Conclusion:

In conclusion, LLPs and UK corporations are required by law to file a verification statement. What happens if you don’t file a confirmation statement causes serious repercussions, including as penalties, legal action, and harm to your company’s reputation, which may arise from late filing. Directors may be subject to personal liability, and in certain situations, fines may even turn into criminal charges. Make sure your verification application is submitted on time to minimise these dangers, and if any delays cannot be avoided, give a good justification to avoid fines. By following this rule, you may protect your business’s reputation and steer clear of expensive repercussions.

Disclaimer: All the information provided in this article on file a confirmation statement, including all the texts and graphics, is general. It does not intend to disregard any of the professional advice.