Charitable companies need to comply with the filing requirements of both Companies House and the Charity Commission, which brings with it an extra layer of compliance requirements compared to Charitable Incorporated Organisations (CIOs) and trusts.
One of these requirements relates to how annual accounts need to be signed and filed with Companies House. Whereas charities can upload electronic accounts (without physical signatures) to the Charity Commission, there is no equivalent service for Companies House. Charitable companies are still not allowed to use Companies House’s online filing service for micro companies, even if the system doesn’t in practice prevent its use for these companies. Electronic filing for charitable companies can only be done using specific software, to which very few charities have access.
Charitable companies must file physical paper accounts, until recently with so-called “wet” signatures in black ink. Companies House then scans these accounts to make them available online. Accounts without these “wet” signatures in black ink would be rejected. Clearly, this represents an additional compliance burden, and is one of several reasons why charitable companies have been converting to CIOs.
Restrictions on meeting in person and on travelling during the pandemic increased the practical difficulties in coordinating these signatures between trustees, accountants, independent examiners and auditors, which could be inefficient and time-consuming (especially for volunteers) even before 2020. During the pandemic, Companies House also closed their Westminster office for walk-in and postal filings, and all accounts currently have to be sent by mail to their Cardiff office. This can be problematic with tight filing deadlines if the accounts were rejected for any reason.
But – there is good news! Companies House have now updated their rules and have confirmed to us that they will accept a range of different types of signature, not just black ink – although this has not yet been formally announced on their website. The decision follows a Law Commission report in recent years which clarified that various types of signature are legally acceptable.
The signatures they now accept include the following:
- Digital signatures provided by DocuSign or similar providers
- Fonts. This means a font type keyed in word processing packages such as Microsoft Word and similar (in addition to the printed name, or Companies House will regard it as unsigned);
- Images of signatures pasted into a document
- Original signatures (exception: see below)
- Rubber stamp signatures
- Company seal
- A thumb/finger print
What is not accepted, you might well ask?
- Pencil signatures.
These changes should make it easier and more efficient for charitable companies to file their accounts with Companies House, until a facility for electronic filing for these charities becomes available more generally.