You’ve seen us rant and rave in the past on a number of topics, but when something serious comes up we try to cut through the bluster and keep the message simple. This is one of those occasions. Urgent action is needed to address the current scanning approach at Companies House before they cause serious problems with the validity of an insolvency appointment.
Since the start of this year we have heard two clients say that documents had been returned by Companies House because the ink used to complete entries was too light, and in at least one case that was because the print and font in a standard Turnkey IPS document was lighter than the rest of the print. They have also had documents returned because they had been printed on both sides of the paper. We have gone public because we see this as a significant threat, but we would be glad to hear from you if you have received similar treatment, so that we can confirm that these were not just isolated examples.
Why are we making such a big deal out of this? We produced an earlier Blog here about delivery to Companies House, but, in short, a document is not “delivered” to Companies House until they have received it, correct and complete, in a format that they are prepared to file on the Register. So, if they turn a document away because their scanner cannot read it, or it has been printed double-sided, then it is not yet “delivered”. Imagine what would happen if the document is a notice converting an Administration to a Creditors’ Voluntary Liquidation. That has to be “delivered” before the anniversary of the administration, or the administration expires. It would be harsh if that happened because the IP had made a minor error on the form to cause the return, but in a situation where Companies House are having scanning problems, that would be totally unfair. Perhaps the courts would rule that there should be some sort of automatic extension of the administration in such circumstances, but who is going to pay the cost of such an application?
Most of this is simply unnecessary and could have been dealt with by some clear communication before it became an issue. If Companies House have got new scanners, or have set new minimum standards for the density of print in documents, surely they should have told the profession and the software providers, allowing time for systems to be adapted to produce the required darker print. Similarly, by making it clear to IPs that documents would need to be darker, say using black ink only, and that only single sided printing was allowed, that would have given them time to adapt and cascade the message to staff, directors of insolvent companies (so that they use a black pen to complete SAs and notices), etc. It does make us wonder, however, why someone thought it was a good idea, in these days of carbon savings and environmental assessments, that an outfit like Companies House, that must deal with billions of sheets of paper each year, should use scanners that can only handle single-sided documents!
That got dangerously close to being a rant again, so we’ll conclude by repeating the message. Urgent action is needed by Companies House and the Insolvency Service to ensure that the new print quality and other conditions are clearly communicated to IPs and the software providers and that some form of concessionary period is introduced, at least as an interim measure, to ensure that documents that have been delivered correct in all legal particulars, but in a lighter print than the scanners can handle, or double sided, are treated as “delivered” and valid under the legislation, despite having to be resubmitted to Companies House. Longer term, Companies House should surely consider obtaining scanners that can adapt to lighter print and handle double sided documents.
