Part H Governance and ethical issues relating to business 22: Fraudulent and criminal behaviour 353
6.7 Companies Act 2006 offences
The Companies Act 2006 includes provision for a number of offences in relation to the management and
operation of a company.
6.7.1 Company records
Company records and registers, such as the register of members and record of resolutions must be kept
adequately for future reference. Officers in default are liable to a fine. Falsification of information, hiding
falsification, or failing to prevent falsification are also offences and the wrongdoer is liable to a fine.
6.7.2 Accounting records
Where a company fails to keep adequate accounting records, every officer who defaults is subject to a
fine. However, they have a defence if they acted honestly and the circumstances surrounding the
company's business makes the default excusable.
6.7.3 Trading disclosures
Companies are required to disclose certain information (such as its name) in specific locations. If these
disclosures are not made then defaulting officers are criminally liable for a fine and may also be liable for
losses under the civil law.
6.7.4 Filing accounts
If a company fails to file its accounts within the time limit following its year end then any defaulting
officer is liable to a fine. However they will have a defence if they took reasonable steps to ensure the
requirements were complied with.
6.7.5 False information
Company officers are liable for making false disclosures in relation to the directors' report, directors'
remuneration report and summary financial statements based on those reports. An officer is also liable
for providing false or misleading information to an auditor. Punishment is either imprisonment or a fine.
6.7.6 Annual return
Company officers are liable to a fine for failure to deliver the company's annual return on time.
6.8 The Fraud Act 2006
The Fraud Act 2006, to which directors and secretaries are subject, created a single offence of fraud,
which a person can commit in three different ways by:
False representation: dishonestly making a false representation of fact or law, intending thereby to
make a gain for themselves or another, or to cause another party loss, or to expose that party to
the risk of making loss
Failure to disclose information when there is a legal duty to do so: dishonestly failing to disclose
to another person information which they are under a legal duty to disclose, thereby intending to
make a gain for themselves or another, or to cause another party loss or expose that party to the
risk of making loss
Abuse of position: occupying a position in which they are expected to safeguard, or not to act
against, the financial interest of another person, and dishonestly abusing that position, thereby
intending to make a gain for themselves or another, or to cause another party loss or expose that
party to the risk of suffering loss.