What is a Confirmation Statement and Why Does Your Business Need It?
Whether you’re a new business owner or managing an established company, understanding the Confirmation Statement and its significance can help you avoid penalties and ensure your business stays on the right side of the law.
What is a Confirmation Statement?
A Confirmation Statement, formerly known as an Annual Return, is a document that UK companies are required to file with Companies House. It provides a snapshot of key information about your company at a specific point in time. The purpose of the Confirmation Statement is to ensure that the information Companies House holds about your company is accurate.
Key Components of the Confirmation Statement
Company Details: This includes your company’s name, registration number, and registered office address. If there have been any changes to these details, they need to be updated in your Confirmation Statement.
Principal Business Activities: You must confirm or update the Standard Industrial Classification (SIC) codes that describe your company’s primary business activities.
Share Capital: The statement should include information about your company’s share capital, including the total number of shares and their nominal value.
Shareholders: You need to provide details of your shareholders and their shareholdings. This ensures that Companies House has the most recent information about who owns your company.
Directors: The names and addresses of your company directors must be confirmed. If there have been changes to the board, these should be updated.
Company Secretary: If your company has a secretary, their details need to be included. If not, you should state that no company secretary is appointed.
Persons with Significant Control (PSC): This section requires information about individuals or entities that have significant control over the company. This includes anyone who holds more than 25% of the shares or voting rights.
Why is the Confirmation Statement Important?
Legal Requirement: Filing a Confirmation Statement is a legal obligation for all companies registered in the UK. Failure to file can result in penalties and legal action, including the potential striking off of your company from the Companies House register.
Accuracy of Information: The Confirmation Statement ensures that Companies House has the most up-to-date information about your company. This is crucial for transparency and for anyone looking to do business with you, including potential investors, partners, and clients.
Avoiding Penalties: Timely filing helps you avoid late fees and other penalties. If you fail to submit your Confirmation Statement on time, you could face fines or even face legal proceedings.
Compliance and Good Practice: Regularly updating your Confirmation Statement is part of good corporate governance. It reflects well on your business and demonstrates a commitment to transparency and compliance.
Protection for Shareholders and Directors: By keeping your information up-to-date, you protect the interests of shareholders and directors. This can be important for resolving disputes or verifying information during business transactions.
When and How to File Your Confirmation Statement
Filing Frequency
The Confirmation Statement must be filed at least once every 12 months. The date by which you need to file is known as your “confirmation date.” The confirmation date is usually the anniversary of your company’s incorporation or the date of your last Confirmation Statement.
Filing Process
- Prepare the Information: Gather all necessary details about your company, including updates to shareholdings, directorships, and registered office address.
- Submit Online or by Post: You can file your Confirmation Statement online via the Companies House Web Filing service or by post using Form CS01. Online filing is generally faster and more convenient.
- Pay the Fee: There is a small fee associated with filing the Confirmation Statement. More details about the current fees for online and postal submissions can be found on here.
- Confirmation: Once submitted, Companies House will acknowledge receipt of your Confirmation Statement. Ensure you keep a copy of the confirmation for your records.
Common Pitfalls and How to Avoid Them
- Missing the Deadline: Set reminders to ensure you file before the deadline. Companies House will send reminders, but it’s good practice to keep track of your own deadlines.
- Incorrect Information: Double-check all details before submission. Incorrect information can lead to penalties and additional administrative work to correct.
- Failure to Update: Regularly review and update your Confirmation Statement to reflect any changes in your company’s structure or details.
