Company owners should guard their WebFiling Codes to avoid attempted fraud


Many company directors use online web-filing to make changes in their company’s statutory records at Companies House. Using these codes, it is possible to register appointments and terminations of directors, changes to the company’s registered office, file a company’s annual return (which shows the shareholdings in the company and the identity of the company’s officers). This is very useful and quick, but it can be dangerous too.

We recently came across a case where an unscrupulous employee of a company obtained the webfiling code (from the company’s unwary accountant), and used the code to amend the register fraudulently. He registered his ‘appointment’ as a director and the ‘termination’ of the true director. He also changed the registered office, and filed an annual return that purported to show that he was the sole shareholder!

Fortunately the fraudster was not bright enough the change the webfiling code as well, so the true director/shareholder was able to reverse the changes, and changed the code too, which he then kept very secret.

One of the most troubling aspects was that the company’s bank relied entirely on the registers at Companies House as proof of the directorship and shareholding in the company, and as a result dealt with the fraudster in preference to the true owner. Our client was nearly obliged to apply to court for an injunction against his company’s bank in order to regain control of the company’s bank accounts.

Of course the real proof of the company’s directors and shareholders lies in the statutory books of the company, not in the records at Companies House. The statutory books are normally kept at the registered office of the company, but often these statutory books are not kept properly up to date.

Companies House operates a ‘PROOF scheme’. This scheme sends out emails to pre-specified email addresses, if filings (paper or electronic) are submitted to Companies House for registration.

All companies should sign up for the ‘PROOF’ scheme, whether they use webfiling or not.

Company directors must keep their webfiling codes very securely, and must ensure that the statutory books are properly completed, since these are, in the last resort, the only real evidence of the true state of the companies affairs. As ever, it is better to be safe than sorry.

It is very easy to join the PROOF scheme. More details can be found on the Companies House website at www.companieshouse.gov.uk/infoAndGuide/proof.shtml

by Tony Cheetham from the Wisbech office