Corporate mistakes your business may have made

...and what you should do about them.

Corporate requirements can be fiddly and, sometimes, unintuitive. It is easy for businesses to trip up on corporate issues. In this series we look at 10 of the most common corporate mistakes companies make, and, more importantly, what they should do about them.

When does it happen?

Companies House filings are managed on an ad hoc basis by external accountants or employees for whom the filings aren’t a priority.

What mistakes are made? 

Filings are incorrect or missing.  

Why does it matter? 

It is an offence for certain filings not to be made, though in practice mistakes are rarely (if ever) prosecuted. The practical issues are:

• Confusion! Decisions are (rightly or wrongly) very often based on Companies House filings. If these aren’t right, then further mistakes will follow. For example, shareholder resolutions may not be validly passed because they haven’t been sent to an up-to-date list of shareholders – this could result in a whole manner of issues, such as shares not being validly issued.
• Investors or other shareholders will be concerned if publicly-available shareholding information is incorrect or missing. It will also make disputes with shareholders much more likely, especially in conjunction with other errors.
• Companies House filings are a first port of call for clients / suppliers and banks to understand your business (e.g. who the directors are, who owns the business etc.). It may make opening bank accounts etc. and getting new clients/suppliers more difficult.
• If you seek to sell your business in the future, potential buyers will review your filings with a fine toothcomb. The buyer will want certainty on the fundamental facts about your business (who owns the shares, who the directors are etc.), and Companies House filing mistakes may act as red flags and hinder a sale process.

What can you do about it? 

Review filings now before problems arise. This means that mistakes can be rectified promptly (where possible) and not compounded by further errors being made as a result.

Interested in reading what other mistakes you business may have made? You can read the full article with #1 – 10 here.