The benefits of electronic filing with the UK Companies House
The UK's Companies House is a government section within the Department for Business, Innovation and Skills (BIS). The Companies House monitors the regulation and incorporation of limited liability partnerships and limited companies within the UK. It serves as the official registrant for all such companies and partnerships in Northern Ireland, Scotland, England and Wales. The types of companies regulated by the Companies House include:
- Public Limited Company
- Private Limited Company by Share
- Private Unlimited Company
- Private Limited Company by Guarantee
- European Economic Interest Groupings
- Limited Liability Partnership
- Limited Partnership
- European Public Businesses
- International Companies
Upon formation, these companies must register with the Companies House. Each year, these companies must also update all information and report to the Companies House via the UK Annual Accounts report. Information gathered by the Companies House is entered into a register of UK Companies that is accessible to the public.
The information available in this public database includes:
- The company's name
- The company's Registration Number
- Date of incorporation
- Company type
- Accounting reference date
- Previous company names
- Nature of business
- Full list of shareholders
- Current and resigned secretaries and directors
- Registered office address
Increasing Transparency With UK Companies House
This registry provides the public with a searchable database of UK companies, allowing anyone to validate information on company ownership, shareholders and business types. Maintenance of the registry is an effort to increase overall economic transparency and to combat money-laundering and corporate fraud.
In order to assist with these registration and monitoring processes, the Companies House provides electronic filing services for all companies required to file. These services give companies a safe, efficient and secure alternative to paper-post filing. The majority of files required by the Companies House are now available in electronic form. The associated files available for electronic delivery include:
- Annual accounts
- Annual returns
- Change of company details
- Dormant or inactive accounts
- Appointment and removal of secretaries and directors
- Copies of resolutions
- Shares allotment
Despite the convenience of electronic filing, there remains a committed contingency of dedicated professionals determined to file their Companies House documents via paper and post. Neil Butler, Business Liaison Manager at the Companies House, reports working with these individuals and trying to address their concerns about electronic filing. Butler tries to point out to them the speed, efficiency, cost-management benefits and security of electronic filing.
Electronic Filing Advantages With UK Filing House
First among the benefits of electronic filing is the speed at which the process can be achieved. In the past, filing annual reports and gathering all the information for company formation was a laborious and often costly task. Electronic filing has sped up these time-consuming activities and streamlined the process to a greater extent. Duncan Nicholas, an Associate at Moore Scarrott, speaks of the ability to review changes with a client one moment, and then register those changes with Companies House the next. Compared to the previous system of filing each individual change via post, this type of instant accessibility makes keeping up-to-date information on current shareholders, directors and secretaries much easier and less complicated. In addition, the electronic filing system provides notification that the filing has been received and accepted, giving you or your clients peace of mind that their filing is complete.
Along with being exponentially faster, the electronic filing system increases overall efficiency and workflow in regard to preparing annual account reports. Because digital filing allows users to introduce processes of standardization and automation, companies have been able to decrease the risk of filing errors and reduce the time spent on corrections or amended filings. Many filing services also provide alerts for users, notifying them of upcoming registration deadlines, thus reducing the likelihood of late filings. The penalties for late filing can range from ''150 for companies who miss the deadline by less than a month to ''1,500 for those who are delinquent by six months or more. Equally as damaging as the penalty fees is the taint in reputation a company faces for having missed these deadlines. The speed and convenience of electronic filing make these missteps easy to avoid. In addition, web filing may be done at any time, 24 hours a day, seven days a week.
According to Butler, some companies have been hesitant to adopt electronic filing, citing concerns about the software costs of various web-filing services. He points out that though account preparation software can be an investment, in the long run, these technology updates tend to pay for themselves as you process and file more documents. Web filing through the Companies House website is available without charge for those who want to forgo the use of an outside service. Beverley Flanagan, Managing Director of Flex Accounting Services, cites the additional, often overlooked cost of stationary, postage and the production of cover letters, all of which can be avoided through online filing.
Lastly, one of the most persuasive reasons to switch to online filing is the added security it provides. As noted above, the Companies House gathers and publishes information and documents verifying the details of companies throughout the UK and makes those details available to the public via a searchable online registry. For documents filed in the traditional paper-post manner, this means images of authorizing signatures are made public, which some individuals have maintained is a security risk. Electronic filing removes this risk by replacing the signatures with a secure Authentication Code. Authentication Codes are only revealed to the Companies House, the company itself and a third-party filing service, if one is used.
The combination of the company's web filing password and the Company Authentication Code assures users that only the company or a person authorized by the company will be allowed to submit data to the Companies House. The Companies House protects and manages all data in accordance with the GDPR standards, and uses encryption protocols to ensure that no outside parties can intercept your information.
Reap the Benefits of Electronic Filing
Electronic filing through the UK Companies House offers the benefits of speed, efficiency, cost management and security. Whether you are in the process of filing your first formation documents or planning your next annual account reports, Diligent can help you make sure all of your files with the Companies House are in perfect order.
