The address is a standing duty, not a box on the form

What I had wrong about the word appropriate

For 2 years I described the registered office as a registration question. Pick an address that satisfies the test, put it on the form, move on. That is how the guidance reads if you meet it while incorporating a company, which is where almost everybody meets it, and I met it there myself in 2019.

The statute does not read that way at all. Section 86 of the Companies Act 2006, as replaced by section 28 of the 2023 Act, opens with a duty rather than with a condition: “A company must ensure that its registered office is at all times at an appropriate address”.

At all times, in those 3 words. I had read the guidance for years and never once opened the section behind it, and the section runs to 5 subsections on a single screen. I went looking for the appropriate address rules after a client's post came back marked as undeliverable, and reading the section took me most of an afternoon once I had the guidance open beside it. It changed 3 things I tell people.

The 2 tests, and which one decides cases

The definition is 1 sentence with 2 limbs. An address is appropriate if, in the ordinary course of events, “a document addressed to the company, and delivered there by hand or by post, would be expected to come to the attention of a person acting on behalf of the company”, and “the delivery of documents there is capable of being recorded by the obtaining of an acknowledgement of delivery”.

The first limb is the one people plan around. The second limb is the one that decides arguments, and I think it is the more demanding of the 2 by a wide margin.

It is not asking whether post arrives. It is asking whether arrival can be evidenced by somebody standing outside your company, which is a strange requirement to place on your own office until you notice who sends the documents that matter: a court, a creditor, the registrar, and in that order of unpleasantness.

The part that is not a fine on the company

Subsection 3 is 2 lines long and it moves the risk off the balance sheet. Where a company fails, without reasonable excuse, to comply, “an offence is committed by” the company “and every officer of the company who is in default”.

Every officer, without qualification. A director who never chose the address, never visited it and never thought about it is inside that sentence if they were in default, and reasonable excuse is the only door out.

Subsection 4 then splits by nation, which I did not expect and had to read twice. On summary conviction it is a fine in England and Wales. In Scotland or Northern Ireland it is “a fine not exceeding level 5 on the standard scale” and, for continued contravention, “a daily default fine not exceeding one-tenth of level 5 on the standard scale”.

A daily fine prices delay rather than the original mistake. I have read a good deal of material written for people setting up a UK company from abroad and I have not seen 1 piece mention that clause. I keep thinking about it, because it is the only number in the section that grows while you do nothing at all.

You certify it yourself, every time you move

The 2023 amendments did something quieter that sits in the notice rather than in the rule. Section 87 now carries a new subsection 1A: a notice of change of registered office “must include a statement that the new address is an appropriate address”.

So the test is not applied to you by an official. You assert it, in writing, on every move, and I suspect that shift is deliberate.

I find that a more useful way to hold the whole thing than the guidance manages. Nobody at Companies House is checking your address against the 2 limbs when you file. You are declaring that it passes them, and a declaration is something you can be wrong about in a way that a form field is not.

The confirmation statement became the enforcement point

This is the change I would put in front of anybody running a UK company from another country, because it turns a dormant problem into a dated one.

New section 853CA says that where a company makes a confirmation statement, its registered office is not at an appropriate address, and no change notice is already awaiting registration, then “The company must deliver a notice under section 87 at the same time as it delivers the confirmation statement”.

The confirmation statement comes round every 12 months whether anything has happened or not. A bad address can therefore sit quietly for most of a year and then has to be dealt with on a date you already knew about, alongside a filing you were already making.

That is sensible drafting and it is also a trap for anybody who files that statement in 10 minutes out of habit, which is roughly how long it takes when nothing has changed.

A short digression about the default address

Subsection 5 has nothing to do with your paperwork and I have not stopped thinking about it. The duty “does not apply in relation to a company during any period for which the address of its registered office is a default address” nominated by the registrar under section 1097A.

Read that subsection backwards for a moment. It tells you the registrar can move a company to an address of its own choosing, and that while your company is parked there the standing duty is switched off, because the address is no longer yours to fix.

I do not know how often that power is used. No figure for it is published anywhere I have looked, and I would guess it is rare rather than routine, though that is a guess and I am recording it as one. Anyway, back to the address you pick yourself.

What the plain guidance adds

Two prohibitions live in the ordinary guidance rather than in the statute, and both catch people who are buying an address rather than occupying one.

The first is blunt: “You can no longer use a Royal Mail PO Box as your registered office address. This includes similar services from other companies”. The ban is drafted to catch the substitute rather than the brand, which is unusual and, I think, aimed at exactly the market that grew up around the old rule.

The second is quieter and more useful. Where you use a provider's address, an accountant or a solicitor for example, “this address must meet all of these requirements”. Buying an address does not outsource the duty at all: it moves the letterbox and leaves everything else exactly where it was, on the company and on the people who signed the notice saying the address was appropriate in the first place.

The consequence stays where it always was: “Your company could be struck off the Companies House register if you do not provide a registered office address that meets all of these requirements”.

So do you need a UK address

Yes, you do, and the better question is what the address has to do rather than where it has to sit. It has to be a physical address in the UK, in the same country the company is registered in.

Beyond that it has to satisfy the 2 limbs continuously, not on 1 day in the company's life. A registered office service can do all 3 of those. The virtual office companies house will accept is the one where somebody is physically present to take delivery, and a forwarding box that nobody signs for is not it. The difference between the 2 is not the monthly price.

I would ask a prospective provider 1 question before anything about cost. Will a courier get a signature at that address on a Tuesday afternoon. If the answer describes scanning and forwarding, that is an answer about the first limb and silence on the second, and the second is the one in the statute twice.

What I cannot tell you

What level 5 on the standard scale is in pounds today. It is set elsewhere, I have not checked it, and I am not putting a number on a criminal penalty from memory.

Which providers Companies House regards as failing the test. No list is published anywhere, the registrar does not comment on individual addresses, and I would simply be inventing a name if I offered one, which is exactly the sort of invention that gets repeated by somebody who trusted it.

How the registrar decides an address is inappropriate in the first place. Section 86 gives the consequence and the guidance gives the requirement, and neither of the 2 describes the assessment that sits between them.

What I got wrong is the shape rather than any single fact. I filed an address in 2019 and treated the matter as closed, and the section I had not read describes a duty that never closes, an offence that reaches the officers rather than the company, and a filing that asks the question again every 12 months.