BIS Companies Investigations Branch
10 Oct 2012
Business Factsheet No. 1
The Companies Investigations Branch is part of the Department for Business Innovation and Skills (BIS).
What do they do?
They investigate companies, usually those that are actively trading, and form a view as to whether any action is required to protect the public from the company. They generally investigate where they consider there are reasonable grounds to suspect fraud, serious misconduct or a material irregularity in a company’s affairs.
They use powers given to them under section 447 Companies Act 1985, to mount a civil investigation into a company, which enables them to request the provision of specific documents and to provide explanations regarding the documentation. This is a compulsory requirement and a failure to co-operate with the Companies Investigations Branch can lead to contempt proceedings.
Their investigations are said to be confidential and conducted in a way which does not pose a risk to the trading business. However they can and do sometimes require third parties, such as suppliers, customers and employees to provide documentation to them.
Where do they get their information from?
The Companies Investigations Branch receives complaints from the police, regulators, Trading Standards and members of the public.
What are their powers?
They can give directions to a company requiring it to produce specified documentation and information to an appointed Investigator. The Investigator can take copies of any such documentation.
If a company refuses to co-operate with an Investigator, the Investigator can obtain a search warrant and attend the company’s premises with the police to search and seize company documentation.
In less serious cases they can take informal action such as issuing a warning to a Company Director and asking them to rectify any faults found.
In more serious cases they can:
- Refer the Company Directors to The Insolvency Service for Directors Disqualification proceedings;
- Refer the company to the police or BIS’s Prosecution Lawyers for a criminal investigation Apply to the Court to close down a company on the basis that this is in the public interest;
- Refer information to other regulators to consider disciplinary action against their members, such as the Institute of Chartered Accountants, or the Solicitors Regulation Authority.
A failure to co-operate with an Investigator can lead to an allegation of contempt of court, which can lead to a term of imprisonment or fine.
How can Richard Nelson LLP help?
Our experienced lawyers can guide you through an investigation by the Companies Investigations Branch. We can advise you regarding what information is being requested and can work with you to asses what the real issues are and to assist you to minimise any consequential commercial risks to you and your business.
To find out more about BIS Companies Investigations and how we can help you to ensure that your business does not experience problems in the future, or if you would like to discuss an issue with one of our solicitors then please: