Failing to File Company Accounts - A Criminal Offence?

Rhys Rosser • December 14, 2024

Complying with the Companies Act and the obligations can lead to serious sanctions, including criminal prosecution

The obligations placed on a Company, and by extension its directors, will differ depending on the size of the corporation. For example, in respect of a micro-entity, the requirements of Section 443A apply:


This requires that the directors of a company that qualifies as a micro-entity in relation to a financial year, must deliver to the registrar a copy of the company’s annual accounts, and may also deliver to the registrar a copy of the directors’ report.


Section 1128 restates section 731(2) to (4) of the 1985 Act which had been repealed. It sets out time limits for summary proceedings. The prosecution must be commenced within three years of the offence being committed, and within one year of the prosecuting authorities receiving sufficient evidence to justify the prosecution.


Section 451 governs the actual offences in respect of a default in filing accounts and reports. If the requirements of section 441 (duty to file accounts and reports) are not complied with in relation to a company's accounts and reports for a financial year before the end of the period for filing those accounts and reports, every person who immediately before the end of that period was a director of the company commits an offence.


It is a defence for a person charged with such an offence to prove that he took all reasonable steps for securing that those requirements would be complied with before the end of that period. However, it is not a defence to prove that the documents in question were not in fact prepared.


An information relating to an offence under the Companies Acts that is triable by a magistrates' court in England and Wales may be so tried if it is laid at any time within three years after the commission of the offence, and within twelve months after the date on which evidence sufficient in the opinion of the Director of Public Prosecutions or the Secretary of State (as the case may be) to justify the proceedings comes to his knowledge.


Whilst the offences are limited to summary conviction, it can still result in a substantial financial penalty and continuing default for the period of non-compliance.


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