Companies Act 2006 - objecting to a registered office address

ACCA is pleased to comment on the consultation on the above. 

Question 1: Do you agree that there is a problem that needs a solution?

The extent of the problem seems low. Even where it occurs, conceivably in some cases the problem will occur for non-suspicious reasons, eg where the failure to change the address is the result of an oversight following a change of accountant or solicitor. But whatever the reason for the default, we would agree that companies should have a registered office address which is indisputably theirs. And as rare as the problem appears to be at the moment, the potential for abuse may increase with the entitlement for directors to use the address of their company as their personal service address. Accordingly, we support the initiative to find a proportionate means of remedying the problem. 

Question 2: If you do agree, does the proposal set out in the consultation paper address the problem or is there another process we should consider? 

How best to proceed on this matter will really depend on how the problem tends to occur in practice. The consultation paper does not shed any light on this. But in terms of procedure the proposed approach make sense, although it is somewhat elaborate. We would only suggest that the proposed procedure provide in some way that any person submitting a notice should be required to confirm, at that stage, that they are the legal occupier of the premises (term to be defined).  

An alternative approach, which might be more appropriate if there is real concern that some companies consciously choose addresses which they know are unconnected with them, would be to make provision for parties to object at the point where the registered office address is initially chosen. This could involve Companies House accepting a nominated address, either at the incorporation stage or under section 87 of the Companies Act, on condition that there will be no objection raised by a person claiming to be the legal occupier within an agreed period. Companies House would then send a notice to the address inviting the occupier to object within a set timetable. If an objection were received, Companies House could then order the company to choose a new address by a specified date and nominate the Gazette for the service of documents if compliance was not forthcoming. 

As an alternative to nominating the Gazette as the replacement address for serving documents on the company, Companies House could also consider the feasibility of warning directors that unless they comply with an order within a given period (and no dispute is referred to the courts) the registered office will automatically become the residential address of the sole or longest-standing natural person director. 

A low-level measure that could be taken would be for official guidance notes and statutory forms to impress on new companies and those proposing to change their address that they should ensure that they are entitled to use that address, and that any necessary permission for the premises concerned to be used for this purpose has been obtained. 

Question 3: We have referred as shorthand to the 'legal occupier' of the premises. Who should be allowed to seek a change of a company's registered office address? 

For this purpose the legal occupier of a property should normally be the freeholder or leaseholder. Any individual, partnership or corporate body occupying a property on a rented basis should only be able to object through the freeholder or leaseholder.   

Question 4: Should the legal occupier of an address (or any other person) have the right to object at any time to the use of the address by a company as its registered office address?

Yes. 

Question 5: When such a person writes to the registrar how should this be done? 

We consider that the notice to Companies House should be in a standard format. As suggested above the notice should include provision for the objector to confirm that they are the legal occupier of the premises. 

Question 6: Who should Companies House inform about an objection?

All the directors and the secretary should be informed of their objection, at their residential addresses. The name of the individual or business making the objection should be omitted. 

Question 7: How long should the registrar give a company to provide a new address or apply to the court before annotating the register? 

We suggest that the notice should be kept to a maximum of 14 days. It will always be open to a company to a company in this position to adopt the address of one of its  directors even if this is not the long-term solution. Should the company wish to dispute the status of the complainant 14 days should be sufficient for them to legal advice. 

Question 8: Is advertising in the Gazette an appropriate means to serve documents on the company in the absence of any other address?

It will be adequate for the purpose of serving legal documents. But it will clearly not help with regard to the location of statutory documents. 

Question 9: Do you agree that, in the event of a successful objection, the old address should remain on the register?

On the basis that the address of a company's registered office is a fact, the old address should remain on the record. 

Question 10: Is strike-off an appropriate sanction in these circumstances?

The Companies Act requires each company to have a registered office and it is reasonable that it be entitled to use whatever premises it nominates for this purpose. But given the current scale of the problem we think it may be an over-reaction, and potentially detrimental to the interests of members and creditors, to provide for companies to be struck off for failure to make suitable arrangements in this matter. We suggest, instead, that where companies fail to take remedial action after any dispute is resolved by the court, the address of the registered office should forthwith revert to the home address of the longest-standing natural person director. We suggest strike-off should only be considered for repeated abuse. 

Question 11: Other comments

The Department may separately wish to consider the situation where a company chooses as its registered office a property which for one reason or another is empty. In such cases, no complaint is likely to arise. But it would be useful for Companies House to have arrangements to intervene where it discovers that a company is using an empty or even non-existent property as its official address.