As the register of overseas entities (“ROE“) marks its one-year anniversary, the overseas entities (“OEs“) on the register must prepare for the first annual update, if they have not done so already.
The updating duty is the annual obligation to file an update statement (“Update Statement“) at Companies House. This will either confirm that the information currently on the register remains correct, or update (following verification) any information that may have changed since the initial registration.
The trigger date for filing (also known as the statement date (“Statement Date“) is 12 months from the later of (i) the date the OE first registered on the ROE and (ii) the date it last provided an Update Statement to Companies House.
The Update Statement must be filed within 14 days of the Statement Date, which can be found by searching for the entity on the Companies House register. It is a criminal offence not to file the annual Update Statement. The overseas entity and every officer of the entity in default may face prosecution or a financial penalty (of up to £50,000) for failing to comply. Another consequence of late filing is that the OE’s registration will become invalid until Companies House records are updated, meaning that the OE will not be able to buy, sell, transfer, lease or charge property or land in the UK.
Parties to contracts for the sale and purchase of land involving OEs should also consider having adequate warranties in place regarding the OE’s status where completion takes place after the OE’s updating duty deadline.
How to file the Update Statement
Companies House have issued guidance outlining the process that OEs need to follow in order to file an Update Statement. Important points to consider include the following:
- There are different processes depending on whether trusts are involved. Where trusts are involved, the OE’s Update Statement must be filed on paper (rather than online). Note that because of a change in the Companies House process to a web-based system, if there is a trust to disclose, substantial work will be required, even if there has been “no change”.
- An Update Statement must be filed even if there are no updates.
- In order to file online, the OE must obtain an authentication code.
- There is a Companies House fee of £120 to file the update.
Any changes made in the Update Statement must have been verified by a UK-regulated agent, such as an accountant or solicitor, no more than three months before the date of the Update Statement.