Remedying filings with Registrar of Companies

The administrators of the company filed a statement of affairs with the Registrar of Companies containing, in error, the schedules referred to in rule 3.30(6)(b) Insolvency Rules (schedules of employees and consumers claiming amounts paid in advance for the supply of goods and services). Rule 3.32(2) prohibits the filing of these schedules by administrators, quite aside from any possible breach of data legislation in relation to the employees.

The administrators asked the Registrar to remove the filing of the non-compliant statement of affairs (including the schedules) from the register. The Registrar refused to do so without a court order.

The administrators applied to the court which decided that:

  • The court in fact had no power under s1096 Companies Act 2006 to order rectification of the register as the material provided was not invalid, ineffective or factually inaccurate.
  • However, the schedules were ‘unnecessary material’ and the Registrar had a discretion whether to register the document either in the state it was submitted or with the unnecessary material removed. The Registrar in not exercising that discretion had done so irrationally or unreasonably, as the rules prohibited these schedules being on the register so it could not be lawful to leave them on it.
  • As the Registrar had a discretion which he should have exercised to remove the schedules, he was liable for the costs of the administrators because the need for a court application was due to the Registrar’s failings, not the administrators’ original error.

Peter Jones (China) Limited v The Registrar of Companies [2021] EWHC 215 (Ch)

In this case distributions were made partly out of distributable profits and partly out of capital. The court concluded that the directors were in breach of their duties in authorising the distribution, but that did not invalidate the whole distribution, only that part which exceeded the amount of the available distributable profits (around £316k of a distribution of £830k).

The shareholder was found liable to repay the distribution and the directors were liable to compensate the company for their breach of duty to the tune of £316k. However, one of the company’s four directors was relieved of liability under s1157 Companies Act 2006 in respect of his breach of duty as:

  • He had no financial or accounting experience and so relied on what he was told.
  • The other three directors were the main decision makers so the company would do whatever they decided.
  • His role in considering the distribution was very limited.
  • He had no later involvement in approving the amount of the management charge or effecting accounting entries.

SSF Realisations Limited (in liquidation) v Loch Fyne Oysters Limited and others [2020] EWHC 3521 (Ch)

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