The Information Sharing (Disclosure by the Registrar) Regulations 2024 (the “Regulations“) came into force in December 2024. The Regulations enhance insolvency practitioners (including the Official Receiver) (“IPs“) powers of investigation by providing them with greater access to information held by Companies House.
Previous Regime
Before the Regulations came into force, Companies House had powers to disclose information to public authorities to assist them with discharging their public functions. However, as IPs are not “public authorities” carrying out “public functions” (such functions being for the private benefit of creditors), IPs could not previously obtain certain information held by Companies House without first obtaining a court order.
Effects of the Regulations
As a result of the Regulations, Companies House may now disclose information to certain IPs, as detailed in Regulation 3. The Registrar must be satisfied that such information is necessary for the purpose of assisting IPs to make, or determine whether to make, an application to the court for an order relating to (amongst other things) fraudulent trading, wrongful trading, transactions at an undervalue, and preference claims. Regulation 4 details the extent of non-public purposes for which such information may be disclosed to the IP.
Further, the Registrar may disclose information to an IP if satisfied that the information is necessary for the purpose of assisting in tracing, realising, or recovering property in specific circumstances.
Overview
The Regulations strengthen the investigative powers of IPs by permitting Companies House to disclose information to them in a far broader set of circumstances than previously.
As the Regulations do not clarify what “information” falls within their scope, it is not yet clear what additional information will be disclosable to IPs than that already available . However, as the scope is not limited, IPs can assume any information can be accessed in this way, subject to complying with applicable data protection and other legislation.
The intention of the Regulations is to assist IPs in fulfilling their duties more effectively, by making more detailed financial and operational data available to them, thus facilitating the identification of wrongful trading or fraudulent activity, recovery of assets for the benefit of creditors, and ultimately holding directors accountable. The Regulations are a welcome step towards assisting IPs in making decisions on cases and taking appropriate actions to progress claims and protect creditors’ interests without first having to incur the costs of gaining a court order to obtain certain information.
The Regulations may also deter malfeasance in the first place, as they promote transparency, supporting better corporate governance and accountability.
It is likely that officeholders will be expected to deploy a request under the Regulations prior to seeking a court order compelling Companies House to deliver up certain information. However, the ability to obtain the relevant information without incurring the expense of a court application will be welcome news to IPs and creditors.