October 29th, 2012 / Insight posted in

Setting company records straight

LB writes: I issued some shares to an investor but the solicitors who filed the Companies House form for the share issue (an SH01 form) made a significant error, getting the amount received wrong by almost £100k. Is it possible to re-submit an SH01 to correct the error or can this be rectified in some other way?

It is not possible to re-submit an SH01 as Companies House will not recognise it as a re-submission, writes Jon Sutcliffe, partner at Kingston Smith LLP. Instead, they will treat it as a further allotment of shares, which will lead to an even more inaccurate record.

The only way to correct this particular form would be to apply for a court order to have the document removed from the register, and to submit a form with the correct information.

However, under the Companies Act 2006, you are now required to file a statement of capital with any event that affects your share capital and with every annual return. The statement of capital contains a schedule of shares issued and amounts paid up on such shares.

When you next file a statement of capital, this can be completed to show the shares issued at a premium, and any future statement of capital should continue to show this information. This, together with future accounts showing the share premium, should be enough to indicate the true situation, but will not of course remove the original error.

You do not have to wait until your next annual return is due; there is nothing to stop you filing an annual return made up to an earlier date, with a corrected statement of capital.

To give it further emphasis, you could pass resolutions (i) ratifying the breach of the duties of the director who signed the SHO1 (this is optional); (ii) stating the error in filing; and (iii) stating the true position. Companies House would be obliged to place this on record. This would of course bring it to the attention of your shareholders who would need to pass the resolutions, which may not be desirable. But as the SHO1 is a public record, the shareholders may notice the error at some point.