Confirmation Statement: Legal Requirements & Best Practices
Confirmation Statement is a statutory filing obligation related to UK based companies. The update generated each year for Companies House provides that any and all facts regarding the company shall reflect an accurate and correct status. It is hereby confirmed the correctness of particulars maintained at Companies House including particulars of directors, shareholders, and registered office addresses. Non filing of a Confirmation Statement may incur penalties which may lead to the dissolution of the company and bears heavy consequences upon the legal status and reputation of that organisation.
Who Needs to File a Confirmation Statement?
Every company and limited liability partnership in the UK, irrespective of whether in trade or in dormancy, is required to file this healing measure, ensuring that Companies House has current and up-to-date records of business entities in return. Even when nothing has changed in the company, filing remains a must. Failure to submit the statement in time would incur fines for the company and may even lead to its dissolution. In short, businesses must keep their acts together and ensure compliance so that a nonchalant attitude does not land them in legal trouble.
Key Legal Requirements
The UK laws governing businesses require the following to be followed:
- Filing Deadline: A Confirmation Statement should be filed at least 1 time in every 12 months even if nothing changed.
- Accurate Company Information:Make sure that the registered office address, SIC code, directors, and shareholders’ details are correct.
- People with Significant Control (PSC): Companies should declare who has significant control over the company.
- Submission to Companies House: The Statement must be sent electronically via the Companies House WebFiling portal or in hard copies sent by post.
- Filing Fee: This fee is set at £13 for electronic filing and £40 for filing by post.
Best Practices for Filing a Confirmation Statement
Here are the best practices to avert penalties and ensure conformity:
1. Keep Company Records Update
Reviewing your company records frequently ensures that particulars regarding addresses, directors, and shareholders are accurate. Update records of any changes that occur before filing your Confirmation Statement to ensure there are no discrepancies nor any issues regarding compliance.
2. File on Time
Filing your Confirmation Statement on time avoids penalties and possibly being called upon before the courts. Set calendar reminders or utilise automated services that keep track of deadlines and allow for submitting ahead of the due date.
3. Verify Shareholder Information
Because shareholders contribute to the overall structure of the company, their details ought to be correct. Double check ownership percentages and share allocation before submission to avoid administrative errors or disputes.
4. Use the Companies House Online Portal
Online filing through the Companies House portal is faster and reduces the risk of paperwork errors. Unlike paper submissions, the digital system gives immediate confirmation and minimises the process delay.
5. Understand SIC Codes
SIC codes define the business activities your organisation engages in. The right SIC identification, therefore, dictates the correct categorisation of your company and avoids confusion or misrepresentation with regard to regulatory filings.
Consequences of Non Compliance
Nonsubmission of the Confirmation Statement might incur an injury or consequence as follows:
- Late Fees and Penalties: There can be monetary fines such as late submission costs imposed on companies.
- Dissolution of the Company: In an ongoing series of violations, your business eventually gets struck off the Companies House register.
- Legal Action Against Directors: The directors can face legal action for omissions in submissions by the company.
How much is a confirmation statement in the UK?
For companies operating in the UK, they incur an annual cost of completing a confirmation statement that costs £13 when done online and £40 when filed by paper. This serves to file the company register details about matters such as directors, shareholders, office addresses, etc. in every year, at least once. Anticipated failure to file may also incur penalties or risk the company’s name being struck off the register. The Fees of a confirmation statement include a 12-month period. Multiple confirmations can then be submitted within that time, and no extra amount will have to be paid. Easy online submission and payment are provided by Companies House.
Confirmation statement example
A confirmation statement essentially comprises the details about the concerning company that include its company registered office address, current directors, shareholders and share capital. For instance, ABC Limited hereby assure that its registered office remains at 123 High Street, London, whilst Directors are John Doe and Jane Smith. The company consists of 100 ordinary shares held by Jane Smith (60%) and John Doe (40%). There are no notable changes since the last statement. The statement is filed with Companies House so that they remain updated records.
Difference between the confirmation statement and annual accounts
It is a statement of confirmation which presents a mandatory filing of the verification and updates of the company details related to the directors and shareholders, as well as a registered address office to ensure its accurate recording at Companies House. This does not hold any financial detail, and thus, one would file it once in a year. Annual accounts, on the other hand, represent the financial health of the company in terms of the balance sheet, profit and loss statement, and notes on financial activities. It is then filed to Companies House and HMRC that shows the financial status of the company. The first is merely a compliance check, while the annual accounts form part of tax calculations and financial transparency. Filing deadlines and penalties differ for both types, with the one that applies to the annual accounts being stricter in failure to file.
Conclusion
In conclusion, it is imperative to file a confirmation statement as an important legal requirement applicable to all those businesses registered in the UK to keep the said records well updated at Companies House. In contrast, the annual accounts provide the financial reports of the company. It is nothing but a non financial compliance check. Company formation is vital for any business to gain a solid legal footing from the inception stage. Timely submitting does prevent penalties, dissolution, or legal consequences from falling upon directors.
Keeping updated company records, confirming shareholders’ details, and timely filing using the Companies House online portal are among best practices. Penalties are fines, or else the company is struck off the register.
