The bogus companies exploiting Britain’s registration rules

Britain appears to be enjoying a surge of entrepreneurialism, with more than 200,000 start-ups registered at Companies House between April and June this year alone. However, while many of these are genuine cases of people taking the plunge and embarking on their dream of opening a tea shop, launching a webinar app or whatever, an awful lot are not going to be contributing any cherries to our national pie – and some might well be pilfering a few.

Among those unlikely to be contributing are the 36 companies registered last year to a single address in Bristol – not a business park but a small semi-detached house. Or the 95 registered, apparently by Romanian nationals, at 65 different houses in the same Herefordshire street since January last year. Then there is the bizarre case of 100 businesses registered by Chinese nationals at a semi in Orpington, all in the course of 14 days. When approached, the bewildered occupant of the house denied any knowledge of them whatsoever.

What on earth is going on? In short, mass abuse of Britain’s companies-registration process. Of course, in some ways it is good that the barriers to setting up a company are low, but perhaps not so good that anyone, anywhere in the world, can set up a UK-registered firm for the small fee of £12. They do not need to provide proof of identity, still less that they are making a serious attempt to set up a viable business. All they need is some sort of British address to put on the form: an address which can easily be lifted from the internet. Nor is there much to stop people registering companies with bogus directors, even including people unaware of how their names are being used.