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What is a Companies house web search?

 
Dec 08, 2022 Red Flag Alert
What is a Companies house web search?

 

Companies House is the central registry of all limited companies and limited liability partnerships (LLPs) in the UK. It is a government body that sits within the Department For Business, Energy & Industrial Strategy. Companies House is split into three separate and independent registrars: Companies House Cardiff (covering England & Wales), Companies House Edinburgh (covering Scotland) and Companies House Belfast (Covering Northern Ireland). This is so there is a separate registrar for each jurisdictional district of the UK.

The full list of companies that must be incorporated through Companies House is:

  • Public Limited Company (PLC)
  • Private Limited Company by share
  • Private Unlimited Company
  • Private Limited Company by Guarantee (no share capital)
  • European Economic Interest Groupings (GP04)
  • Limited Liability Partnership (LLP)
  • Limited Partnership
  • European Public Businesses
  • International Companies

Originally formed as part of the Joint Stock Companies Act 1844 to provide transparency around businesses to help protect the public from fraudulent activity, its purpose has remained remarkably similar over the years but has seen some evolution and is currently defined under the Companies Act 2006. Companies House is meant to be the ultimate source of truth relating to limited companies and LLPs in the UK. To submit false information or fail to meet your filing obligations is an offence and can result in professional disqualification or prosecution.

It serves to approve the incorporation of relevant businesses, to handle the dissolution of companies, to be a repository of information on limited companies and LLP, make this data publicly available and in some cases prosecute under the Companies Act 2006.

 Companies House Web search

Companies are required by law to file certain information at Companies House.

These are:

  • Company name
  • Date of incorporation
  • Business activity (SIC code)
  • Registered address
  • Directors’ information
  • Persons of significant control information
  • Shareholders’ information
  • Previous Directors’ information
  • Previous Company names
  • Mortgage information
  • Annual Confirmation statement
  • Annual financial statement (a company with a turnover of less than £10 million do not need to file a fully audited set of accounts.)
  • Insolvency information (only in the case of insolvency)

Any company on the register is required to file an annual financial statement though a company with a turnover of less than £10 million do not need to file a fully audited set of accounts.

Companies House Beta

Beta Companies House Search is the service through which Companies House allows its stored information to be accessed by the public. Companies House Beta is free of charge and can be accessed through the Companies House website.

The aim of this is to lend transparency to business ownership and the state of a companies financial affairs, as well as being a resource for professionals when doing due diligence on a potential business partner or customer. Over 3 million businesses records are accessible through Companies House Beta.

As such, a Companies House search can be used for researching companies you are or are thinking of doing business with. However, there are several major limitations when using Companies House:

  1. Companies with a turnover of less than $10 million a year are not obligated to file a fully audited set of accounts. The only filing requirements are for the balance sheet and any notes; and these do not need to be prepared by a professional accountant. This information is extremely limited and does not give much insight into the financial health of a company. In the UK there are millions of companies that fall below this threshold.
  2. Companies only have to file once a year. Information at Companies House is not in real time and is ‘out of date as soon as it is filed’. A business showing strong financials at the time of filing may experience distress at any time; for example, a major client may go bust, leaving an unabsorbable bad debt. Without up to the minute information to base business decisions on you are opening yourself up to serious risk.
  3. Information is limited. Companies House does not have information such as County Court Judgement (CCJs), petitions or bad debts which are essential for understanding the financial health of a business
  4. The system is abused. It is very easy to set up a company in the UK and there is no verification required as to actual ownership. Unfortunately, this means that the system can be abused and just because a company is on the registrar does not mean it is legitimate and further information is often needed.
  5. It’s inconvenient and inefficient. The financial information that is provided comes as a PDF download. As such, to do any analytics you would have to manually go through multiple previous financial statements to obtain any data, wasting time and money, as well as having the necessary software or expertise to perform any analytics.
  6. It is not meant to be a tool for making sound business decisions. Companies House is not, and does not claim to be, an analytical tool or source of up to the minute data. Companies House exists so there is a legally backed register of UK companies to ensure there is always a measure of transparency and that the legitimacy of companies can, theoretically, be easily confirmed.

All the information available with a  Companies House check is also available on a Red Flag Alert Business Report, presented in a quick and convenient manner with powerful analytic tools. Along with up to the minute data on all aspects of business distress, which has all run through our industry leading algorithm (based on 15 years of insolvency data) to give you the soundest advice on a company’s financial health on 15+ million businesses. 

 Book a demo today to find out how Red Flag Alert’s company checking solution can help your business.

  
Published by Red Flag Alert December 8, 2022

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