Draft Companies (Address of Registered Office) Regulations 2016 Draft Registrar of Companies and Applications for Striking Off (Amendment) Regulations 2016

Jonathan Djanogly Excerpts

Thursday 17th March 2016 General Committees

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I wholeheartedly welcome the regulations. They are an important contribution to the fight against corporate fraud.

I have seen addresses being hijacked on three occasions. It can lead to all sorts of complications and go on for a very long time. People who are using the wrong address inadvertently will want proof that it is the wrong address; it can really be very complicated indeed. I take the point made by the hon. Member for Cardiff West that we need to query what penalties there are for people who use addresses wrongly.

Do the regulations on directors extend to shadow directors—not just to a bog-standard director, but to people who should register and therefore should be included in the regulations?

[Anna Soubry]

We have had some very good and interesting questions. I think I will be able to respond—[Interruption.] Ooh, as if by magic! I may have to write to hon. Members in relation to some of their questions.

Every company must have a registered office to which all communications and notices may be addressed. A company might provide an address that turns out, effectively, to be a bogus one. We have a really good set of regulations to deal with that. I was really struck—and I did not know this until I looked through my notes—that Companies House alone receives 100 complaints a month about the unauthorised use of addresses. That is an astonishingly high number of complaints. There is a real problem out there.

On the basis that companies must provide a registered address, if a company provides one that is then found to be bogus, it is already breaching the law and action can be taken. I suggest to the hon. Member for Cardiff West that there are those powers, because a process will be triggered. Clearly the company does not have a registered address if a complaint has been made that a false address has been used. The company is therefore in breach of existing law.

[Mr Djanogly]

My right hon. Friend mentioned companies giving a bogus address. What happens if individuals hijack a company and give a bogus address?

[Anna Soubry]

I do not know the answer to that question, but I might be able to answer it in a few moments. If not, I shall write to my hon. Friend.

In response to my hon. Friend the Member for Totnes, the registrar is now required to write to every newly appointed director, which will give them the opportunity to object if they have been falsely appointed. I hope that that deals with her question.

Returning to my hon. Friend the Member for Huntingdon, the regulations do not extend to shadow directors. They apply only to directors registered as such at Companies House.

--- Later in debate ---

[Mr Djanogly]

The other aspect is alternate directors, who have a duty to register. I would have thought that the regulations should apply to them. Do they?

[Anna Soubry]

At the moment, I do not know the answer to that. I will write to my hon. Friend. Is it not excellent that we have Members on the Back Benches who know what they are talking about? They have huge experience of these things. [Hon. Members: “Hear, hear.”] My hon. Friend is a very good example of the wealth of experience that exists in this place.

By way of magic, I can say that section 1095 of the Companies Act 2006 provides a way for the registrar to remove factually inaccurate or forged information or material deriving

“from anything invalid or ineffective or that was done without the authority of the company”.

That may be helpful in answering my hon. Friend’s excellent questions.

I am pleased that the regulations are not contentious. Some important and interesting points have been raised, and I will deal with them all by way of letter.