Limited company whack a mole
Discussion
A business I know of (an IT shop/service company) has been trading for about 15 years but never submitted any accounts. They setup a new limited company every 18 months or so, trade under that company for 12 months, then when the first lot of accounts are due, apply for an extension to get them to 18 months. But still never file and eventually get struck off. Then they setup a new ltd co and rinse and repeat. There's a trail of these companies going back about 15 years, I can link about 5 of them fairly easily on webcheck. As far as I know the same owners at the helm. It's really difficult to follow them on Companies House/Gov webcheck because often the director's names don't tie together properly - they use different abbreviations, middle names, suppsed typos and spelling mistakes etc. But even when the names look identical, Companies House hasn't linked them as the same person.
They been trading at the same address all this time (name above the door is different, often doesn't show the ltd co name at all), but quite regularly switch their registered address to somewhere else, including the property next door (part of the same building/ownership I'm guessing). They also never declare who the persons with significant control are, online it just says: "The company knows or has reasonable cause to believe that there is no registrable person or registrable relevant legal entity in relation to the company". But surely they have to declare shareholding when they register a new company? Actually, having just tracked down their latest company, they have withdrawn the above statement for that one, and have now delcared a person with significant control for the first time (same name that crops up on all the other companies records).
The whole thing stinks, I can see no legitimate reason for reregistering with a different company like this. But how on earth are they getting away with it? Does Companies House not pickup on this rinse and repeat cycle? Does lack of submitted accounts to CH also mean that they aren't submitting to HMRC? Would HMRC also miss this and let them get away without paying corporation tax too?
They been trading at the same address all this time (name above the door is different, often doesn't show the ltd co name at all), but quite regularly switch their registered address to somewhere else, including the property next door (part of the same building/ownership I'm guessing). They also never declare who the persons with significant control are, online it just says: "The company knows or has reasonable cause to believe that there is no registrable person or registrable relevant legal entity in relation to the company". But surely they have to declare shareholding when they register a new company? Actually, having just tracked down their latest company, they have withdrawn the above statement for that one, and have now delcared a person with significant control for the first time (same name that crops up on all the other companies records).
The whole thing stinks, I can see no legitimate reason for reregistering with a different company like this. But how on earth are they getting away with it? Does Companies House not pickup on this rinse and repeat cycle? Does lack of submitted accounts to CH also mean that they aren't submitting to HMRC? Would HMRC also miss this and let them get away without paying corporation tax too?
This used to be quite common practice in the 90s with printing companies until the paper merchants began to do what the government should have been doing and investigate the probity of owners before granting any form of credit.
As Eric says, the efficiency of the relevant government authorities is found wanting. There's also 5.5m companies in the UK so even if they were the benchmark of excellence, it's not possible for them to check every single one which provides the environment for nefarious operators to thrive.
If you feel strongly about it, you can report them. I've only ever done this once - 10 years ago. We found out that a competitor was employing short-term staff on freelance contracts which wasn't permitted for the type of work that was being done. They were able to undercut us and others by as much as 25% because of this. I'd normally not get involved but in this case, our business was being impacted by the non-legal practice of another. They started to recruit and employ properly so I assume that our reporting of them did have an effect.
As Eric says, the efficiency of the relevant government authorities is found wanting. There's also 5.5m companies in the UK so even if they were the benchmark of excellence, it's not possible for them to check every single one which provides the environment for nefarious operators to thrive.
If you feel strongly about it, you can report them. I've only ever done this once - 10 years ago. We found out that a competitor was employing short-term staff on freelance contracts which wasn't permitted for the type of work that was being done. They were able to undercut us and others by as much as 25% because of this. I'd normally not get involved but in this case, our business was being impacted by the non-legal practice of another. They started to recruit and employ properly so I assume that our reporting of them did have an effect.
M1AGM said:
Whoever it is cant find getting trade credit very easy if at all. No accounts and newly incorporated….
Not every company needs credit. The one thing I would have thought they'd have an issue with is bank accounts but the banks only refer to the information that's at Company House. Eric Mc said:
Companies House, like most government regulators, no longer carries out its functions properly.
I once reported a disqualified director who was still running his business (he was using his wife's name as Director). However there was clear evidence that he was still running the company including being signatory on the bank account, employing staff and turning up to work every day although his wife never set foot in the place. Plus he was up to his previous tricks by not declaring all income to HMRC. They did nothing.
This sort of thing is annoying I work in the car trade and know of an actually fairly big car dealer that does exactly this.
Whilst the owners might think they are clever avoiding tax it must hold then back in terms of getting credit/being able to move premises with sketchy trading history no bank or landlord will touch you.
In the trade I know loads of people that skirt around ducking and diving every tax and never even declare earnings but they just don't realise they are holding themselves back.
Whilst the owners might think they are clever avoiding tax it must hold then back in terms of getting credit/being able to move premises with sketchy trading history no bank or landlord will touch you.
In the trade I know loads of people that skirt around ducking and diving every tax and never even declare earnings but they just don't realise they are holding themselves back.
mjb1 said:
StevieBee said:
If you feel strongly about it, you can report them.
I'm not sure what rules they're actually breaking, if any?I would only consider going this route if you or your company are being unfairly disadvantaged.
We'll see if it ends up working but the impending Economic Crime and Corporate Transparency Bill is aimed at preventing this sort of thing.
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