Confidentiality orders in relation to a director's residential address

Summary

On 2 April 2002 sections 723B-F Companies Act 1985, and regulations made under these sections, came into force: together, these sections and the regulations allow an individual who is or proposes to become a director or secretary of a relevant company, or a permanent representative of an oversea company with a place of business or branch in Great Britain, to apply to the Secretary of State for a confidentiality order. (For convenience all these persons are referred to below as "directors"). Such an order will in effect disapply the provisions in the Companies Act which require the public disclosure of the normal residential address of the director. The Secretary of State will only grant a confidentiality order if she is satisfied that the availability of the director's usual residential address for inspection by the public creates, or is likely to create, a serious risk that the director or a person who lives with him will be subjected to violence or intimidation. The DTI have emphasised that confidentiality orders will only be granted in favour of directors who are at genuine risk. In practice, the Secretary of State is most likely to rely on the views of the relevant local police force as to whether the director in question (or someone who lives with him) is likely to suffer violence or intimidation if details of their residential address are made public.

Equivalent regulations which came into force on the same date allow a member of a limited liability partnership to apply for a confidentiality order.

Method of Application

A director can apply for a confidentiality order by sending a completed form 723B to Companies House in Cardiff, from where it will be passed to the Secretary of State. The form requires the director to supply his name and usual residential address, a different 'service address' (see below), details of all directorships, a summary of the risks considered to be relevant and details of any threats received. The form also requests the director to supply details of any supporting evidence (such as police reports) and any steps taken to make secure his usual place of residence. Although the regulations do not expressly contemplate this, it must be assumed that the latter will be taken into account by the Secretary of State in determining whether or not an order should be made. A fee of £100 is payable on application.

The making of a confidentiality order will effectively disapply the requirement for the director's residential address to be publicly available at Companies House. Instead, the record will show a service address for the director. The residential address supplied with form 723B will only be available for disclosure to certain prescribed categories of persons, such as police forces and regulatory, competition and tax authorities.

Key provisions

• A confidentiality order remains in force for 5 years and cannot be revoked by the director even if he ceases to be at risk. An order can be renewed by application prior to the expiry of the previous order.
• An order can be revoked by the Secretary of State if it is found that the director provided false or misleading information, failed to supply a valid service address, or failed to supply details of any amendments to his directorships, residential address or service address.
• The effect of an order is that the only persons who can inspect, copy or otherwise have access to the director's residential address are the specified 'competent authorities' (generally police forces and regulatory, competition and tax authorities). These competent authorities do not need to show reason for any application to inspect the residential address.
• The service address supplied by a director must be the same for each of the companies in which he holds office as a director, secretary or permanent representative. The address must also be of a place at which service of documents is capable of being effected by physical delivery, and cannot be a PO box or DX number. The address must be in a state within the EEA.
• A search of a director's details at Companies House will not reveal whether the address given is the director's residential address or a service address.
• It is a criminal offence to knowingly or recklessly make a false statement in an application for a confidentiality order.
• It is also a criminal offence for any person to disclose a residential address which is protected by confidentiality order where the information is obtained from Companies House or from the company in question, unless the disclosing party can show that he acted in the course of his duties or functions and that he exercised due care and diligence to preserve the confidentiality.
• A confidentiality order will not have retrospective effect, i.e. directors will not be able to apply to have existing details of their residential address removed from the register. Confidentiality orders are therefore only available if a person becomes a new director of a company or an existing director changes his residential address.

Comment

The DTI have stated that the regulations are expected particularly to assist directors of companies in the biotech, pharmaceutical, research, chemicals, oil and defence industries.

In advising the Secretary of State whether or not an order should be made in favour of a director, it seems likely that the police will take into account evidence of:

• Violence or intimidation previously suffered by the applicant director;
• Violence or intimidation previously suffered by other existing or previous directors of the same company or group of companies; and
• Violence or intimidation previously suffered by directors of companies whose business is similar to that of the company in question.

If a director has not himself suffered violence or intimidation but believes that he is at genuine risk of suffering in the future, it is likely to help his application if he can identify other specific named directors who have so suffered. This should help the police to find and consider evidence of violence or intimidation suffered by these persons.

For further information, please contact:

Mike Rich, corporate partner

Phone: +44 (0)20 7367 2121

Email: [email protected]

Peter Bateman

Phone: +44 (0)20 7367 3145

Email: [email protected]

The firm also has experience in providing advice on legal remedies for directors and employees who may suffer harassment or attacks by activists or other groups. For further information on this please contact:

Mark Tyler, healthcare partner

Phone: +44 (0)20 7367 2568

Email: [email protected]