Critical reporting for company relocations during pandemic
A complex court case over conflicting dispute resolution provisions has highlighted a simple, but vital, takeaway on the importance of corporate reporting requirements for all UK registered companies, as the pandemic sees offices unattended or subject to permanent closure.
The case involved an aircraft operating lease for a Boeing 737 between Helice Leasing and PT Garuda, an Indonesian company with a UK office.
When Garuda defaulted on the payments, the leasing company claimed for unpaid rent. The debt was acknowledged and some of the outstanding sum repaid, but when further defaults followed Helice claimed US$5.15 million plus interest. They served notice of the claim on Garuda, using the address shown at Companies House. By this time, Garuda had ceased operations in the UK and moved to a different address, but a delay by Companies House in registering the new address meant the public record had not been updated by the time the notice was served.
When the case reached court, Garuda argued that the original notice was invalid because it had been served at their old place of business, but the High Court held that the notice was valid and that it was Garuda’s responsibility to manage the change of address process. The company should have ensured that arrangements were made for receiving and collecting correspondence during the period between notifying the change of address and it being recorded at Companies House, and to make sure suppliers and others were made aware of the change.
In giving the decision, the judge highlighted the need for everyone to be able to rely on the information available on the Companies House website.
Said corporate expert Janet Goode: “There is a real challenge for company directors in managing business through these difficult times, and they will have many pressing things competing for attention, but this case shows the critical importance of maintaining basic corporate responsibilities and reporting changes promptly to Companies House.”
Janet added: “A change of address is more likely to have taken place over the last year, with many organisations choosing to permanently or temporarily close offices. Even where it is a temporary solution during lockdown, there is a requirement to notify Companies House within 14 days of changes such as where records are stored, or address details for directors.”
“The staff at Companies House have been affected by the pandemic too, leading to delays in processing changes, so it’s worth remembering that many changes are not in force until they have been approved and published. During that time, it is your responsibility to ensure suppliers and creditors know where to find you, whether by setting up postal redirection or physically checking on post at an old address. It’s also important to notify contacts of the change and to publish the new information via the company website and other communication channels.”