Only one overseas company has been prosecuted for failing to register with Companies House after opening a British business in the past five years – despite 90 public complaints in that time.
The figures were revealed by the small business minister Anna Soubry in two parliamentary answers to Louise Haigh, the Labour MP for Sheffield Heeley. Ms Haigh told The Independent that the low prosecution rate showed the Government was “soft on corporate crime”.
The Overseas Companies Regulations were introduced in 2009 and both simplified registration rules and stipulated that foreign companies had to file copies of their annual accounts with Companies House. These are the accounts of a business’s work all over the world, not just in the UK. Directors also have to disclose certain personal details and the company’s constitution must be provided.
Supporters of the regulations argue that they can help customers swindled by overseas companies to track down the directors.
When it receives a complaint about a registration failure, Companies House investigates the potential breach. If an offence is thought to have been committed, the case is referred to solicitors at the Department, who consider whether there should be a prosecution – though this is described by Government as “a last resort”.
Ms Haigh said: “This Government is soft on corporate crime. Labour brought in these rules for good reasons but they aren’t being enforced.
“There are cases where companies have been involved in outright criminality, and yet it is near impossible to prove who the owners or directors are because they’re registered abroad – so they are being let off the hook. It’s about time for action to protect law-abiding businesses and people who are the victims.”
A spokesman for Companies House said it always seeks to make sure firms “achieve compliance with the law”.
He added: “Companies House will have entered into correspondence with all companies against which a complaint was made, the vast majority of which then comply.
“There was only one company which did not comply and against which there was sufficient evidence of a breach to justify a prosecution.”
