Guidance

Live company investigations - what we do

Updated 13 February 2023

This guidance explains what we may do and how you can submit information to the Insolvency Service if you suspect a live company of corporate abuse.

This guidance only covers reporting companies where the company’s status is described as ‘active’ on the Company Register held by Companies House (this is what we refer to as a ‘live’ company). It also covers limited liability partnerships and overseas registered companies which are carrying on or have at any time carried on a business in Great Britain and Northern Ireland.

We have other guidance available if you want to complain about:

• a dissolved company
• a company in administration or liquidation
• the re-use of a company name
• · phoenix companies
• a disqualified director
• someone who is bankrupt, has a debt relief order or is subject to bankruptcy or debt relief restrictions

1. What we do

We can investigate complaints about corporate abuse by live companies. This may include serious misconduct, fraud, scams or dishonest practice in the way the company operates.

We have been given this power by the Companies Act 1985.

Our powers are discretionary. This means that we do not have to investigate everything that is reported to us. We get a high number of complaints and we do not have the resources to investigate everything that is reported. The purpose of any investigation is to protect the general public and/or the business community. We prioritise the complaints received and target the companies that present the greatest risk of harm to the public.

These powers do not allow us to recover any assets for creditors or assist with the repayment of any amounts that may be owed.

Our investigations are civil. If you consider that a crime has taken place, you should also report it to Action Fraud either online at www.actionfraud.police.uk/report_fraud or by telephone on 0300 123 2040.

2. What we can investigate

We can only investigate:

• active companies registered in the UK
• active overseas companies that trade in the UK
• active limited liability partnerships (LLPs)

You can make a complaint to the Insolvency Service if you have reasonable grounds to suspect any of the above of:

• causing significant harm to groups of customers, suppliers or other stakeholders
• trading dishonestly such as carrying out a scam

3. What we cannot investigate

We cannot use our powers to investigate:

• sole traders or partnerships (unless they have limited liability, such as an LLP)
• dissolved companies. We have separate powers for investigating dissolved companies

We do not usually use these powers to investigate companies:

• that have stopped trading
• that have isolated instances of misconduct, there must be a deliberate pattern
• that are in administration or liquidation. We have separate powers for investigating insolvent companies
• where the sole complaint is that there is a ‘phoenix company’ or a new company is re-using the name of a company that has ceased trading
• where the concerns are being or have been investigated by other regulators (such as the police, Trading Standards, the Financial Conduct Authority or another regulator)
• where the main misconduct is something that should be investigated by another, more appropriate, regulator
• where the complaint is in relation to the conduct of the company’s director(s) and not the trading activities of the company
• where the sole complaint is in relation to the company trading whilst insolvent
• where the complaint is about tax matters. This should be reported to HMRC

• where the complaint is about the company failing to file documents with Companies House or has filed fraudulent documents with Companies House. This should be reported to Companies House

• where the complaint is consumer related such as goods or services paid for not being received, or goods or services being substandard (for further details, please visit the Trading Standards website)
• where the complaint is about not paying an individual creditor (such as a customer or supplier). There is separate guidance on your options if you are owed money.
• where your complaint is against a government department, agency or company. This should be raised via their complaints procedure.
• where we do not consider the misconduct to be serious enough

4. What our investigations cannot resolve

Our investigations look into misconduct and wrongdoing by companies.

Our investigations cannot:

• help you recover any money a company owes you
• help you resolve any differences you have with a company
• get involved in disputes between a company and its shareholders (minority shareholders have rights under the Companies Act and may wish to get independent advice)
• resolve a dispute within a company’s own management
• get involved where commercially there is a breach of contract, breach of an agreement or other contractual disputes

In these circumstances, you may wish to seek independent legal advice. You can also contact Citizens Advice, or alternative advice agencies. We cannot give you advice because we are not an advisory body.

Other regulators or organisations may be able to provide advice, but they may charge a fee. You should always check what this fee is when you contact them.

We are not allowed to comment on whether or not a company is reputable, or give you references (credit or otherwise) for a particular company.

5. How to report a company

You can complain about an active company to the Insolvency Service by:

• completing our online form
• writing to:

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

• Or by telephone to 0303 003 1744 (24-hour answer phone) if you are unable to complete a written complaint.

6. Confirmation that we have received your concerns

We acknowledge receipt of all complaints in writing.

7. Review stage

We do not formally investigate every concern that we receive about a company’s suspected misconduct.

Before we begin a formal investigation, we review the information you have provided. We also look at any other information about the company that is available to us.

We will not approach the company at this stage.

During our review we consider whether:

• we can investigate your concerns (we can only investigate if the concern is within our remit and we have the legal power to do so)
• it is appropriate for the Insolvency Service to investigate (it must be in the public interest and a good use of public spending for us to investigate)

We get a high number of complaints and we do not have the resources to investigate everything that is reported. The purpose of any investigation is to protect the general public and/or the business community. We prioritise the complaints received and target the companies that present the greatest risk of harm to the public.

We aim to complete our review within two months of receipt of a complaint.

We may ask you for more information in order for us to make a decision.

Following our review, we will decide whether or not to formally investigate the company.

8. If we decide not to investigate

We will write to you if we decide not to investigate the company following this review.

Our decision not to investigate is not an endorsement of the company or its trading activities. It does not mean that your concerns cannot be investigated by another public body.

Our decision to investigate can sometimes subsequently change before an investigation takes place due to other factors, such as resourcing issues.

9. If we decide to investigate

Any investigation may not take place immediately after our review.

We do not have the resources to investigate all cases put forward for investigation. This means that some cases which are approved at our review stage may not be investigated. In these circumstances we are not able to let you know that your complaint will not be investigated.

Our investigations are confidential. This means that we cannot let you know if we decide to investigate. We cannot provide you with updates following our review.

10. How we investigate

We carry out fact finding investigations. They are not criminal investigations, even though they may be about potential criminal behaviour.

We do not have to restrict our investigation to your original concerns. If we find other things that concern us, we can investigate them.

Our investigations are confidential, so we do not tell:

• company directors the specific reasons why we are investigating their company
• the company being investigated who made a complaint
• the complainant that we have decided to investigate a company
• the complainant what we have found if we do investigate a company

11. Possible outcomes after an investigation

If we decide to investigate a company, there are several possible outcomes:

1. Our investigation may show there is no, or not enough, evidence of misconduct or corporate abuse. We will not take any action against the company.
2. If there is enough evidence and it appears to be in the public interest, we can apply to the court to wind the company up in the public interest and therefore stop it trading. It will be for the court to make this decision.
3. If there is evidence of misconduct by the company’s directors, we can start proceedings in court to disqualify them from managing a limited company for a period up to 15 years. It will be for the court to make this decision.
4. We can disclose information about suspected criminal behaviour to a law enforcement body such as the police.
5. We can pass on information to another regulatory body that has more appropriate powers to deal with the concerns identified within the investigation.
6. We can give a company and its directors a warning and ask them to improve their conduct.

We will not contact you to let you know the outcome of our investigation. We may issue a press release if the court makes an order to put the company into liquidation or if a director is disqualified.