UK Companies House shuts down ‘brass-plate factory’ for China-based clients

The UK Companies House and Insolvency Service announced that it had shut down three connected companies providing unregulated company secretary and registration services to more than 11,000 UK businesses for overseas clients, predominantly from China, that had no real presence in the UK.

Yunma Tianlong International Consulting Co. Limited, Busy Secretary Service Limited and J&C Business (UK) Co. Limited were all wound-up at the High Court in London on 29 January. None of the companies were registered with HM Revenue and Customs (HMRC) as trust and company service providers (TCSPs).

They were operating an unregulated business model because they had failed to register as TCSPs, did not conduct anti-money laundering due diligence on clients wishing to register UK companies, and were creating a false impression that their clients had a genuine UK business presence. Investigators found that, as of April 2024, one address in South Croydon had more than 8,500 companies registered to it, but the uncollected post had piled up inside reaching the letterbox.

The three companies also filed dormant accounts at Companies House despite conflicting information that suggesting active trading which could not be verified. They also did not appear to follow UK data protection rules and did not fully co-operate with Insolvency Service investigations.

Registered TCSPs, like Sovereign, are firms that offer services such as forming companies, acting as directors, secretaries or trustees, and providing registered office addresses. They must be registered with HMRC and follow strict anti-money laundering rules.

“Most third-party agents provide legitimate services and play an active role in the creation and management of UK companies,” said Martin Swain, Companies House Director of Intelligence and Law Enforcement Engagement.

“We know however that some agents fail to comply with the rules and are careless, even reckless, in carrying out their duties. We will continue to step up our efforts with our law enforcement partners to crack down on this type of activity and protect the integrity of the register.”

Sovereign Corporate & Trustee Services Limited (SCATS), based in Chester, is supervised as a TCSP by HMRC for Anti-Money Laundering (AML). It specialises in helping UK businesses and individuals comply with Companies House and HMRC regulations, including identity verification, Trust Registration Service data and Register of Overseas Entities (ROE) requirements.

Businesses supervised by HMRC are subject either to fit and proper or approval requirements to ensure that the businesses’ beneficial owners, officers and managers are appropriate people to undertake those roles. Relevant persons must also pass the appropriate test before the business can register, and remain registered, with HMRC.

If you are looking to set up a genuine business presence in the UK, it is essential to use a properly registered and supervised TCSP. More than just a badge of approval, our registered TCSP status formalises our ability to support clients, particularly those overseas, with the evolving demands of UK corporate compliance.