What can people see online about your business finances?

Kirsty Young Limited Company

We get asked this question all the time from business owners who are worried about their online privacy.

In this blog we take a look at what other people can find out about your business online in terms of its finances.

 

Sole Traders

If you are a sole trader, there is very little that can be found out online. If credit searches are carried out, they are done on you as the owner. Your business is not a separate ‘entity’ in the legal sense.

Beyond what you put on your website, Facebook, LinkedIn, etc., financial information is hard to come by. Your tax return is for your accountants and the HM Revenue & Customs eyes only.

 

Limited Companies

As an owner of a limited company, you have to submit company accounts to Companies House each year. These accounts are publicly visible. Details are held in a searchable database at the Companies House website. It’s like ‘Company Google’; you just type in a name and search for information.

The type of information anyone searching on Companies House can view includes:

  • Directors and officers of the company
    • Address (more on this below)
    • Date of birth (not the day of the month)
    • Nationality
    • Occupation
  • Who owns the company:
    • In many cases you can look at previous ‘Confirmation Statements’ and other documents to figure out who the shareholders (owners) are.
  • Company financials:
    • You can see the filed accounts.

Types of company accounts you can view

Searching the Companies House database will let you view four types of company files:

– Dormant Accounts

If a company hasn’t traded yet, or has “paused” trading for a while, it usually has dormant accounts filed. Dormant accounts are often filed when someone wants to keep the company name , isn’t trading at the moment, but may want to restart trading again in the future.

As a result, there won’t really be any information to view. All you (or other parties) will know is that the company wasn’t trading in the period of those filed accounts.

– Full Accounts

You generally only see these for larger companies (such as PLCs like Royal Mail). These companies do not have a choice to file any other types of accounts.

Full accounts will usually show:

  • a Profit and Loss report that breaks down all of the income and expenses of the company
  • a Balance Sheet which shows the overall position of the business

HM Revenue & Customs need full accounts for any size of company, as this information accompanies your company tax return. This information isn’t publicly visible.

As the owner of a small limited company, you can by choice submit full accounts. However, most owners don’t, as they would rather not reveal the detailed income and expenses (and profit) to the public. So they choose to submit one of the two account types below.

  • Micro Entity Accounts

Some very small companies will submit micro accounts where they can choose to do so. Micro accounts have very little detail in either the notes or the Balance Sheet ,and do not contain a Profit and Loss (income/expenditure) report. If privacy is a concern, then these are a solid option.

Micro entity accounts are also a little less complex to put together, and there is a free HMRC software tool than can be used. Just to say, this should be used with extreme caution as it is complex, and you still need knowledge of tax and accounting rules/‘standards’.

The downside to submitting micro accounts is the lack of information. If you wish to go for lending, credit accounts with suppliers, or investment, you may find it more difficult as those parties cannot see enough information to make a decision.

  • ’Filleted’ Accounts:

The middle ground for small companies is often ‘Filleted’ accounts. These used to be known as ‘Abbreviated’ accounts. This type of accounts is much like full accounts but with no Profit and Loss report. So much of the detail remains hidden.

Filleted accounts do contain more information than Micro Entity accounts. This can be a good thing for the long term, or in a case where you need to show your finances to other parties but want to retain privacy. Filleted accounts still don’t show anything really sensitive

There are also some other accounting benefits in terms of flexibility that we won’t bore you with here! In summary, they can help better demonstrate the position of your Company’s financials.

There are various other forms that can be seen on Companies House, but the types listed above are the main ones financially.

 

A word on addresses at Companies House

The address shown for the company’s registered office, or the director’s ‘service address’ can be a paid-for address. It’s quite normal to have your accountant’s address as the company registered office, for example.

Most owners prefer not to publicly display their home addresses, although we come across plenty of owners that haven’t realised this is what can be seen.

When you form a new company, you still have to supply your personal address to Companies House, but they are not shown on the public record if you chose to supply a director’s service address as well.

 

A note on ‘Open Banking’

Although not publicly available for all, it is worth mentioning that it is possible to share your bank data with 3rd parties. With some apps this a great feature (like accounting software). You will have to give your express permission to share this data with a select few.

 

How your accountant can help

As you can see, it’s possible to limit the amount of information publicly available, with how you prepare your returns and accounts at the forefront of this. Talk to your accountant if you’re still unclear about where your business finances might be visible, and also to check how your accountants keep your details and filed accounts secure.

If you don’t have an accountant or feel your information might not be as secure as you’d wish with your current accountants, call us. We’d love a chat about how we can help.