The Insolvency Service (‘IS’) has publicly stated that it intends to take a more proactive approach to policing and enforcing Directorial and Shareholder compliance in all areas of its operations. This will include obligations under the Insolvency Act 1986 and the Companies Act 2006 (as amended from time to time).
This means that company directors in the UK now face increasing risk of criminal prosecution for compliance failures. This article highlights a recent case involving the Insolvency Service and outlines the serious consequences of non-compliance.
Recent example – What happens when a director fails to maintain the People with Significant Control (PSC) register?
Our Director (‘D’) client was charged with failing to keep a register of people with significant control of a company pursuant to section 790 M(1) Companies Act 2006.
Or in the alternative, D was charged with failing to give notice to the Registrar of Companies of an entry, alteration or note of its PSC register within 14 days of the change being made (contrary to section 790 VA Companies Act 2006).
Surely this is small beer and not a really serious offence? Anything but…
Having been charged with the above two offences by postal requisition, D was summoned to appear before the City of London Magistrates Court in September 2025 to answer the charges.
The stated consequence of non-attendance at that hearing, was that the case would likely be heard in D’s absence with D running the risk of a Warrant being issued for his arrest if he failed to attend. Serious stuff indeed.
The prosecution was carried on by the Department for Business and Trade, acting via the Insolvency Service on behalf of the King.
What are the consequences of the Insolvency Service’s process and a successful prosecution?
If found guilty, D runs the risk of sentencing consequences.
In addition, D incurred substantial legal fees to try and resolve the problem, including representation at Court by a Junior Barrister instructed by Solicitors. All of this was so easily avoidable.
A successful prosecution also ran the very real risk of D gaining a criminal record with consequential travel restrictions to some countries and irreparable reputational damage.
How can directors avoid prosecution? Takeaway points
There is an obligation to keep a company’s records at Companies House up-to-date. It is perhaps inevitable in this new compliance era that a failure to do so whether in relation to Accounts or any other returns, will result in the threat of, and if the contravention continues, an actual prosecution.
The message to Directors and Shareholders is therefore to keep company compliance absolutely up-to-date at all times or face the consequence of a criminal prosecution for company directors in the UK.”
Frequently Asked Questions
Can company directors in the UK be criminally prosecuted for compliance failures?
Yes. Under the Companies Act 2006, directors may face criminal prosecution for failing to maintain accurate statutory records, including the PSC register. The Insolvency Service has recently pursued such cases through the courts.
What are the consequences of a successful prosecution?
A conviction may result in sentencing penalties, legal costs, reputational damage, and travel restrictions. Directors may also gain a criminal record, which can have long-term professional consequences.
How quickly must changes to the PSC register be reported?
Any entry, alteration, or note must be reported to the Registrar of Companies within 14 days of the change, as required by section 790VA of the Companies Act 2006.
Who enforces these prosecutions?
The Department for Business and Trade, acting via the Insolvency Service, prosecutes on behalf of the Crown.
