UK Insolvency Service continues crackdown on firms exploiting Companies House register

The UK Insolvency Service reported on 9 June that it had shut down two more companies as part of its campaign against unregulated firms that have been exploiting the Companies House register to provide more than 12,000 overseas clients with a false UK business presence.

UK Sinosia Business Ltd and Longshine Overseas Ltd, which were both wound up in the High Court in London on 2 June, had registered more than 4,300 UK companies for predominantly China-based clients, diverting all fees to Chinese bank accounts, and providing no evidence that they had carried out the required money laundering checks.

Foreign companies register on Companies House because it provides respectability and legitimacy and potentially opens up new markets and investment. However, companies that have no presence in the UK undermine economic confidence and are at high risk of being used as vehicles for fraud and money laundering.

The UK’s Economic Crime and Corporate Transparency Act 2023 (ECCTA) gave the Insolvency Service a range of tools to tackle corporate abuse and clean up the register. The cases were referred by Companies House, reflecting the two agencies’ close collaboration in cracking down on abuse of the UK company register.

UK Sinosia Business was incorporated in December 2020, with Longshine Overseas following in October 2021. Both companies charged overseas clients to register UK companies, provide registered office addresses and act as company secretaries. Both companies had no presence in the UK and were based in China.

Firms can act as a ‘broker’ for companies and provide registered UK addresses via Companies House. However, there is a legal requirement to register with HM Revenue & Customs (HMRC) as a ‘Trust or Company Service Provider’ (TCSP). UK Sinosia Business’s application was rejected by HMRC and Longshine Overseas failed to register, with no evidence of carrying out anti-money laundering checks.

UK Sinosia Business provided a registered office address to at least 2,597 client companies, while Longshine Overseas acted as company secretary to a further 1,746 and appeared to be squatting in a genuine Fleet Street address without the landlord’s knowledge or consent. They also used a single apartment in London as the registered office for 2,873 companies.

Insolvency Service investigators discovered that client fees were being paid into personal or third-party bank accounts in China and the listed director was on the record admitting that UK Sinosia Business and Longshine Overseas were essentially ‘one company’, with the same operating mode, structure and clients. She further claimed that UK Sinosia Business was registered as a TCSP, but this had been granted to a separate Hong Kong company with no legal standing in the UK.

Both companies were in reality under the control of a single Chinese national up until November 2024. His identity had not been disclosed on the Companies House register, and he denied all knowledge of the companies. But records showed he was proprietor of the leasehold address and had a signed rental agreement with UK Sinosia Business.

Following their winding up, continued enforcement action is being taken by Companies House in respect of the client companies, which were registered as trading in sectors ranging from the wholesale of alcohol to the supply of computer equipment. The clients were predominantly based in China.

The Insolvency Service has now taken action against five companies this year, which had registered more than 12,000 businesses in the UK, mostly from China. Three companies were wound up in January after the Insolvency Service discovered that they had registered more than 8,500 companies to a single address in South Croydon alone.

“Unregulated companies are bad for the economy. Public confidence in the Companies House register depends on the information on it being accurate,” said Dave Magrath, Director of Investigation Services at the Insolvency Service.

“We won’t stand for a business model based on abusing the Companies House register which damages consumer confidence and presents real risks to our economy. We’re working with our partners across government to tackle these rogue entities and protect the UK’s reputation as a trusted place to do business.”

The impact of the ECCTA has been significant. Some 151,000 company addresses have been removed from the Companies House register, almost four million individuals have verified their identities and linked their appointments, and collaboration with law enforcement partners has seen seizure of millions in suspected criminal proceeds.

Companies House is now on track to deliver the next phase of reforms. Further identity verification rollout, enhanced transparency of the Register of Overseas Entities, and a more systematic, intelligence-led approach to enforcement are all underway. It said the next phase will ensure action remains targeted, proportionate and effective, supporting legitimate businesses while targeting those who seek to abuse the system.