Ractification of the Register of Companies

The Companies Registration Office (CRO) has given a useful clarification of its position on the correction of errors in documents presented to it for filing. Where errors in documents come to light before registration, the document is usually returned by the CRO to the presenter, and a corrected version can be submitted for filing on the register. Because of the backlog situation in the CRO, documents may have ‘received’ status for a considerable period of time and, generally, if a ‘received’ document contains an error that comes to light before registration, it can be amended and resubmitted by the company in question. This does not apply to submissions made pursuant to section 99 of the Companies Act 1963, even those having ‘received’ status, as a section 106 application to the High Court would be necessary if amendment were required to be made to any of the prescribed particulars.

The position is different where an error in a submission comes to light after registration. The registrar has no statutory power to make amendments or corrections to registered documents. For the most part, errors can be corrected in practice by the company filing an up-to-date return, recording the correct information. For example, a new form B10 (change in directors and/or secretary or in their particulars) can be filed where a director’s name was misspelt or the wrong address was supplied on the initial B10. Incorrect information on an annual return is frequently corrected by the following year’s return being accurately completed.

Most difficulties arise, however, in the context of share capital, because of section 72 of the Companies Act 1963.

Section 122(5) of the Companies Act 1963 permits a company to correct an error in its own register of members “without application to court” and to give notice to the registrar within 21 days if the error or omission also occurs in any document forwarded by the company to him.

In the considered opinion of the CRO, the necessary implication of section 122(5) is that, outside this particular scenario, an application to court by the company is necessary in respect of any errors in its own register and corresponding error or omission in any statutory filing.

The CRO has taken the view that, because of the section 72 prohibition on reductions of issued share capital, it was justified in not accepting section 122(5) notifications where registration of the notification would result in a reduction of the company’s issued share capital as recorded on the CRO register. The view of the CRO has been bolstered by the decision of Laffoy J in Air France Aircraft Leasing Limited v Registrar of Companies (unreported, 2007). In the Air France case, Judge Laffoy invoked the inherent jurisdiction of the High Court to correct an error in three forms B5 that had been registered in 2001. She made an order reciting that the forms B5 registered in 2001 contained erroneous information and that the court was satisfied that the creditors of the company in question were on notice of the application and none of them objected to the making of the orders sought. She directed that the register of companies be rectified by removing the three forms B5 and allowing new forms B5 to be substituted containing the correct information. She further directed that an attested copy of her order be placed on the CRO file.

In a more recent case heard by Laffoy J on 28 January 2008, 3V Transaction Services Limited v the Registrar of Companies (unreported), she ordered that the register of companies be rectified by the removal therefrom of a form B5 containing erroneous information and the substitution of a new form B5 containing correct information. She directed that a copy of her order be placed on the CRO file in relation to the company. Judge Laffoy allowed the company to dispense with the requirement to give notice to creditors and was satisfied that the mistake could not have had a material adverse effect on creditors.

Thus, where a registered form B5 overstates the amount of a company’s issued share capital, the mistake cannot be corrected by a simple administrative act of the CRO. The mistake can only be corrected by order of the High Court.