Keeping on top of administrative requirements is critical if you're a small business owner, startup founder, or company director. One key compliance requirement you're responsible for is to file a Confirmation Statement.
But what exactly is it, and why is it so important to comply with the rules surrounding it? Today, we’ll break down the essential details of the Confirmation Statement and answer some common questions to help you better understand how it impacts your business compliance.
What is a Confirmation Statement?
A Confirmation Statement is a mandatory filing required for all companies that are registered. Think of it as an annual "snapshot" of your company’s current details, submitted to the relevant governing body. If you're registered in the UK, for example, this would typically mean Companies House.
The purpose of the Confirmation Statement is to ensure that the information on public records about your company—such as your address, company officers (directors and secretaries), and shareholdings—is accurate and up-to-date. While no significant changes need to be made every year, you’re legally required to review and confirm these details by filing the statement.
Filing this document is not just a legal formality; it plays an essential role in maintaining transparency and compliance for your business. Every company, regardless of size or profitability, must file a Confirmation Statement annually.
What is a Confirmatory Statement?
Although they sound similar, a "confirmatory statement" isn't the same as the official Confirmation Statement. A confirmatory statement typically refers to a formal affirmation or declaration in various legal contexts.
For example, say your business enters an agreement or needs to clarify a contractual obligation. A confirmatory statement could be used to provide a concise acknowledgement of that agreement or situation. This term is broader and used in legal or formal communications, while a Confirmation Statement carries a specific meaning tied to corporate filings.
What Happens If You Don’t File a Confirmation Statement?
Failing to file a Confirmation Statement can have significant consequences for your business. Since it’s a legal requirement, non-compliance may lead to penalties or fines levied against your company. More worryingly, sustained failure to submit your Confirmation Statement could result in your company being struck off the register, effectively dissolving it.
Beyond legal consequences, not filing a statement can damage your company’s reputation. Any stakeholders, such as investors, lenders, or business partners, may find it concerning if your business has compliance issues, which could hinder growth opportunities or future collaborations. If you're required to file a Confirmation Statement and neglect to do so, the repercussions can ripple through both legal and operational aspects of your organisation.
What is the Difference Between a Confirmation Statement and an Annual Return?
It’s not uncommon to confuse a Confirmation Statement with an annual return. They serve similar purposes but are distinct in scope and process.
The annual return was previously used to update Companies House with company information, but in 2016, it was replaced by the Confirmation Statement. While both documents focus on ensuring accurate company details, the Confirmation Statement is designed to be simpler and more streamlined. Additionally, filing a Confirmation Statement involves confirming or updating information already on record, rather than providing entirely new disclosures.
For businesses filing today, the term "annual return" is outdated. What you need to file is a Confirmation Statement.
Do I Need an Accountant to File a Confirmation Statement?
Having an accountant or professional adviser can be helpful if you want to ensure accuracy, especially if your business structure is more complex or you’ve recently made changes to governance, shares, or other critical details. An accountant can assist not just with filing the Confirmation Statement but also with ensuring all your other business filings are in order.
What is an Example of a Confirmatory Statement?
To clarify the term "confirmatory statement," here’s an example:
Imagine your company agrees to license its proprietary software to another entity. Before finalising the transaction, the other party asks for a confirmatory statement clarifying certain terms of the license—for example, whether the license covers exclusive use for a specific region.
A "confirmatory statement" in this context serves as a written acknowledgement or formal confirmation of agreed-upon conditions. This type of statement ensures mutual understanding and agreement between parties. While it is a critical legal document in some settings, it remains entirely separate from the statutory Confirmation Statement, which companies must file annually.
Why Filing a Confirmation Statement Matters
For small business owners, startup founders, and company directors, staying compliant with corporate filing requirements is not just about following the law—it’s about securing the trust and confidence of those who interact with your business. Filing the Confirmation Statement ensures your company’s details are updated, avoids legal complications, and supports seamless business operations.
With today’s technologies, filing the Confirmation Statement online is easier than ever. However, if your business has undergone significant changes throughout the year, enlisting professional assistance can provide peace of mind.
By staying on top of your annual filing, you demonstrate responsibility, professionalism, and commitment to transparency—not just to regulators but also to customers, investors, and other stakeholders.
