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Company Investigations

One of the main drivers of The Service’s enforcement regime is to clamp down on corporate abuse, whether by directors involved in companies which have become insolvent or by companies which are still trading.  

In relation to companies which are still trading, we use powers under the Companies Acts to conduct confidential, fact-finding investigations into the activities of live limited companies in England, Scotland and Wales. Since October 2009 we have also been responsible for the investigation of companies in Northern Ireland.

Note – the following information relates to the investigation of companies that are actively trading, or which have ceased trading without entering into insolvency proceedings, using powers of investigation under the Companies Acts. For information on investigations into companies which have entered into formal insolvency proceedings click here

 

 

How do I complain about a company?

Before making a complaint about a company, please make sure you have read the section about when can The Service investigate and when can’t The Service investigate.  Having read this, if you feel you wish to continue with your complaint there are various ways to do so:

Online Complaints Form:

Please provide as much of the information asked for as you can, as this will give us the best start to considering your complaint and where we might go for further information. We appreciate that you may not be able to provide all the information requested, but any information you give will greatly help any enquiries that may be undertaken into your allegations.

When you have completed the form, click on the submit button. The following will happen automatically:-

  • We will instantly receive a copy of your complaint.
  • You will receive immediate confirmation that the complaint has been received.
  • You will receive an acknowledgement by e-mail together with a copy of the completed complaint form and a unique reference number.

Click this link to open the complaints form

Submitting complaints or intelligence by Post:

Please send as much information as possible to: 

Intelligence and Enforcement Directorate
Investigations and Enforcement Services
Insolvency Service
3rd Floor Cannon House
18 Priory Queensway
Birmingham B4 6FD

Please provide the same basic information as required on our complaint form, otherwise we will only have to ask for it later. This could delay consideration of your complaint.

Alternatively, our email address for matters relating to live companies is:

  Intelligence.live@insolvency.gsi.gov.uk

Contacting our Investigations Hotline

Our investigations Hotline number is – 0845 601 3546. This is a 24 hour facility which allows you to leave your contact details so we can acknowledge your contact and send you the appropriate questionnaire.  You should note that we do not routinely return calls

Supporting Documentation:

You may have a number of documents that you feel support your complaint. This should not prevent you from using the online complaint form or make you feel that you must submit your complaint by post. The complaint form asks you to state what information you have, and our staff will call for relevant information when they consider your complaint. In fact, if your concerns are more appropriate for another public body, there may be no benefit (and unnecessary effort on your part) in sending the documents to us.

Can I complain anonymously?

There is no real benefit in doing so. We will treat any information you provide in strictest confidence. In particular, if we do investigate, we do not tell the company who has made the complaint or what we are looking at. If we decide not to investigate, we do not tell the company that a complaint has been received.

If your concerns are more appropriate for another public body, we would normally pass on your complaint. However, if you do not wish us to do so, please make that clear in your complaint.

Also, if you complain anonymously, we will not be able to obtain further information from you or discuss your concerns, and this could reduce the prospect of an investigation being commenced (by us or any other body).

 

What will happen to my complaint?

On receipt of a complaint:

  • The information is assessed and a decision is taken as to whether the complaint is capable of being addressed by our powers, and also whether or not it is in the public interest to proceed. This may involve obtaining additional information however we do not approach the companies at this stage.
  • Where we decide that there is sufficient good reason to investigate, and that investigation is in the wider public interest, we will appoint investigators under the authority of the Secretary of State.
  • We may decide there is no basis for investigation (see section on when can’t The Service investigate)
  • We may decide not to investigate ourselves, but to pass the information to another public or regulatory body, which may be in a better position to investigate or act on your concerns.

·        We issue press releases when action has been successfully completed. 

Where investigators are appointed they will then call, often unannounced, at the companies premises to talk to the companies officers.  They will ask questions of those who appear to be in charge and require sight of document which they feel will be useful in the enquiry, taking copies of anything they consider important.  The investigator also has the facility to obtain electronic copies of information held on computers.

Investigators can demand detailed information not only from a company’s directors but also from other company employees and third parties who may be in the possession of relevant documents and information.

For further information see ‘how do you investigate corporate abuse

 

When can The Service investigate

There must be reasonable grounds to suspect fraud, serious misconduct, material wrong-doing or significant irregularity in a companies affairs for us to investigate.

The Insolvency Service does not only investigate the affairs of companies that are subject to insolvency proceedings. It can also investigate companies that are actively trading, or which have ceased trading without entering into insolvency proceedings, using powers of investigation under the Companies Acts.

Please note – ‘company’ can also refer to an Limited Liability Partnership.

There must be reasonable grounds to suspect fraud, serious misconduct, material wrong-doing or significant irregularity in a companies affairs for an investigation to take place.

The Service can investigate:

  • Limited companies and Limited Liability partnerships that are active and have a business address in England, Wales, Scotland or Northern Ireland, including overseas registered companies which are operating within the UK.
  • Companies that are actively trading, or which have ceased trading without going into compulsory insolvency proceedings.

Investigations are fact finding in nature.  They are not criminal investigations, although they may address conduct which could amount to criminal behaviour. 

Our approach is to take a proportionate and realistic view of issues brought to our attention, and to investigate aspects of corporate behaviour which might harm both the business community and the public generally. 

With this in mind we wish to know about the activities of any company which appears to be causing significant harm to consumers, trade suppliers, service providers, investors etc., who have had dealings with it.  Also where there is any strong indication of serious misconduct in the management or affairs of a company. 

Such activities would include companies that:

  • Are set up for an illegal or improper purpose (‘Sham’ companies)
  • Engage in, mainly consumer targeted, ‘scams’ where there is little or no intention of supplying or providing the ‘products’ promised,
  • Promote, advertise or otherwise participate in bogus investment schemes or other ‘get rich quick’ opportunities
  • Engage in asset stripping operations
  • Target vulnerable groups using high pressure selling techniques,
  • Take fees, deposits or other advance payments, in circumstances where there is little or no reasonable prospect of providing the goods or services offered,
  • Falsely claim to ‘ring fence’ or otherwise protect customer or client monies/funds in their possession,
  • Falsely claim to honour guarantee or warranty obligations,
  • Falsely claim official status, approval, authorisation, bonding, licensing etc., from or by a government or other official body,
  • Falsely represent, or otherwise abuse charitable, educational or religious status,
  • Falsify their accounts, documents of contract or account, or security or references etc. In order to present their affairs more favourably,
  • Improperly (and successfully) evade debt and/or transfer assets at under value to the detriment of third parties who have dealt in good faith,
  • Are managed or controlled by persons who are prohibited, by law, from participating in the control or management of a company’s affairs,
  • Are improperly managed such that reputational damage to the UK corporate regime is likely to result.

You can lodge a complaint or provide information of undesirable activity or behaviour in a variety of ways.

See the section about how to complain

 

When can’t The Service investigate?

 

The Service can’t investigate

·         companies which do not carry on business in either England, Wales, Scotland or Northern Ireland.  
 

·         companies which have been dissolved.  
(The Registrar of Companies will be able to tell you if a company has been dissolved).  

Note: Companies in compulsory liquidation are administered and investigated by the Official Receiver

It is important to note that we cannot assist you in the ways described below. However, if you have any information to suggest that the company may be involved in a pattern of misconduct (for example, you are aware of others in the same position) we may be able to put a stop to it if you provide us with details.

  • We cannot help you resolve any differences you have with a company, such as a dispute over the quality of goods or services provided.
  • We cannot help you to recover any money that you are owed as enquiries are not an alternative to any legal remedies that may be available to you).
  • We cannot intervene in any dispute between a company and its shareholders. In particular, the fact that some shareholders are unhappy with decisions made by the directors is not a basis for an enquiry.  (It is the job of the directors to manage the company and for the shareholders to vote on the appointment of the directors and any resolutions required to be passed by shareholders. Remedies may be available to shareholders under the Companies Acts or through the courts if they are unhappy with the decisions made by the directors or any failure to act).  
  • We cannot intervene in any dispute between the company’s directors.  
    (It is the job of the directors to manage the company and resolve any disputes between them, taking appropriate legal action where necessary).  
  • We cannot give you any advice or guidance on what course of action you could or should take if you are in dispute with a company.  
  • We cannot comment on whether or not a company is reputable, or provide you with  references (credit, or otherwise) for a particular company.  

Please note that our investigations are confidential. We can neither confirm nor deny than an investigation is taking place, and by law we cannot provide you with any details of what we find. We will however take action or make the information available to other regulators and enforcement agencies if we have any concerns.

If the issue you are concerned about is something we do not or cannot do you may find that another organisation is better placed to deal with those concerns or your problem. See the list of other such organisations provided

 

How do you investigate corporate abuse?

Complaints may be made against a limited company where there are concerns about serious misconduct or malpractice.  Company Investigation officials have the power to investigate companies which are still active, and to apply to the court for a company to be wound up where there is sufficient evidence that it is in the public interest to do so. Officials carry out investigations prompted by the receipt of complaints.

In order to carry out this function effectively, Company Investigations exercise the Secretary of State’s powers of investigation under the Companies Acts. 

These acts grant the power to undertake focussed, fact finding investigations into a company.  These are not criminal investigations. Investigators take an appropriate and realistic view of issues brought to their attention and seek to investigate aspects of corporate behaviour which might cause harm to the business community and/or the wider public.  They do not carry out exhaustive enquiries into all aspects of a company’s activities. 

When an investigation takes place, Company Investigations officials will: 

  • Visit the company without warning.
  • Speak to the company’s officers and ask questions.
  • Examine relevant paper and electronic documents and take copies.

They can also, by law, ask wide ranging questions and demand detailed information from:

  • Company Directors
  • Company Employees
  • Third parties in possession of relevant documents and information.

They also have the power to enter and remain on premises considered to be used in a company’s business.

Investigators can apply to the Magistrates Court for a search warrant if the company under investigation fails to co-operate, or there is a real possibility of documents being destroyed. 

A lack of co-operation by an individual can be reported to the Court which may hold that person in contempt of court, which may be punishable by a fine or imprisonment. 

If it is in the public interest the information may be used for civil proceedings brought by the Secretary of State or in regulatory or disciplinary proceedings.  This may include applying to the Court for the company involved to be wound up, or to seek disqualification orders against its directors. 

The information obtained from an investigation can however, be used to launch a criminal investigation. Such an investigation may be conducted for example by BIS or the Police. 

The results of an investigation can only be disclosed to specified people or organisations, and for specific purposes.  As a result the information obtained cannot be disclosed to individuals who are seeking to recover money or other items from a company. 

The length of any investigation depends on various factors such as complexity and the amount of co-operation received.

Company Investigators aim to complete 90% of investigations within six months. 

 

 

What action can be taken against a company?

We may decide that there is insufficient good reason or that it is not in the wider public interest to investigate.

However, where we do decide to investigate:

  • Where the investigation shows that the company’s business is being operated contrary to the public interest (e.g. in a manner likely to cause harm, detriment or loss to third party consumers, investors and traders or otherwise a significant adverse impact on the commercial market)  then we can ask the Court to make a winding up order. This will put the company into compulsory liquidation and thereby prevent it from further trading. This is the follow up action that we are most likely to take. The purpose is to stop the immediate mischief or undesirable trading activities as soon as possible, but this cannot stop the individuals involved with the company from trading through another company, or on their own.
  •  The information we obtain may be passed to Prosecution Lawyers, police or other investigation agencies, with a view to them carrying out a criminal investigation, where it appears that criminal offences have been committed by the company or its officers.
  • The investigation may provide us with information which we can pass on to another regulatory organisation which has powers to deal with what we have found.
  • Exceptionally, where we have concerns about a company’s trading activities or the administration of its affairs, but there is no basis for formal action or the management appear capable of remedying the position, we may take some other action such as an “informal warning” letter. This will set out our concerns and the improvement expected. We may ask for proof that appropriate action is being taken.

It is not our role to monitor the affairs of any company or to provide feedback to a company following an enquiry. This exceptional step will be taken only if it is the appropriate outcome in the wider public interest. We may make further enquiries to confirm that improvements have been made, particularly if other complaints are received. 

The investigation may show that the original concerns were unfounded, and no other concerns have arisen, in which case no further action will be taken.

 

The Companies Acts

Most of our investigations are carried out under section 447 of the Companies Act 1985.

This enables the Secretary of State, if he/she considers that there is good reason, to require a company to produce documents and information to an appointed investigator.

Investigators can also be authorised to enter and remain on premises which they believe are used wholly or partly for the purpose of the company’s business. (There are certain rights and obligations which will be explained by the investigators if this power is exercised).

If a company’s management refuses to co-operate with investigators, or there is a risk of documents being destroyed, we can ask a magistrate for a search warrant. The police and investigators can then search premises on which there may be company documents and seize them.

Investigators can also ask any person involved with a company, now or in the past, or any third party, to provide documents, explanations of the documents, or any other information about the company. These questions can be wide-ranging. Those being asked the questions are obliged by law to provide an answer.

A lack of co-operation can be treated as a Contempt of Court and will also be taken into account when we consider what further action may be required against the company and its officers.

 

What other organisations could I contact regarding my complaint?

You may find that the following organisations may be better placed to deal with your concerns or assist you with your problem.

Organisation & address Type of complaint
Trading Standards

www.tradingstandards.gov.uk .

Breaches of the law controlling the supply of goods and services – consumer complaints.
Citizens Advice Bureau

Email: www.citizensadvice.org.uk

 

Free, confidential and impartial advice on many subjects including consumer rights
Consumer Direct

Email:  www.consumerdirect.gov.uk

Tel:      08454 04 05 06

A telephone and online information service for consumers in Great Britain, supported by the Office of Fair Trading
Office of Fair Trading

Email: www.oft.gov.uk

 

Complaints about unfair trading practices, misleading advertising, breaches of the Consumer Credit provisions and unfair competition.
Serious Fraud Office

www.sfo.gov.uk

 

Criminal investigations into large and complex frauds, usually where losses exceed £1 million
Companies House

Email: www.companieshouse.gov.uk

 

Only has a limited investigation capacity, usually regarding defaults in filing documents
Department for Business Innovation & Skills (BIS)

Email: www.bis.gov.uk

 

BIS is responsible for the policy and the law relating to consumers, companies and competition.  They investigate and prosecute criminal matters such as breaches of the Companies Acts.
Advertising Standards Authority

Email: www.asa.org.uk

 

Complaints about advertisements, sales promotions and direct marketing in the UK. It does not have an investigative function but refers such cases to the Office of Fair Trading
The Charity Commission

www.charity-commission.gov.uk

 

Can investigate and if necessary intervene in the affairs of a charity
Office of the Scottish Charity Regulator

Email: www.oscr.org.uk

 

Similar to the Charity Commission but in relation to Scottish companies
Department of Enterprise, Trade and Investment (Northern Ireland)

Email: www.detini.gov.uk

Complaints against companies based in Northern Ireland

 

 

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