Insolvency Service shuts two more businesses exploiting UK business register for China-based clients

The Insolvency Service has announced that it has closed two more companies in its campaign against unregulated firms exploiting the Companies House register.

The overseas companies register on Companies House is a legitimate platform for companies seeking to open up new markets and attract investment for them. However, companies which have no presence in the UK undermine economic confidence by eroding trust in the register. They are also high-risk for being used as vehicles for fraud and money laundering.

Extensive powers under the Economic Crime and Corporate Transparency Act 2023 have given the Insolvency Service a range of tools to tackle corporate abuse and clean up the register.So far this year, the Insolvency Service has taken action against five companies which alone have registered more than 12,000 businesses in the UK, mostly from China.

Three companies were wound up in January after the Insolvency Service discovered that they had registered more than 8,500 companies to a single address in South Croydon alone.

In the latest move, two further companies following the same business model have been shut down after referrals to the Insolvency Service from Companies House.

UK Sinosia Business Limited and Longshine Overseas Limited were wound up at the High Court in London on Tuesday 2 June. Between them, they had registered more than 4,300 UK company addresses for clients predominantly based in China. The client companies were registered as trading in sectors ranging from the wholesale of alcohol to the supply of computer equipment.

It is legal for a business to act as a ‘broker’ for companies and to provide registered UK addresses via Companies House. To do this, a firm has a legal requirement to register with HM Revenue and Customs (HMRC) as a ‘trust or company service provider.’ However, UK Sinosia Business Limited’s application was not approved by HMRC and Longshine Overseas Limited failed to register, with no evidence of anti-money laundering checks being carried out.

Continued enforcement action by Companies House is being taken in respect of the client companies. UK Sinosia Business Limited was incorporated in December 2020, with Longshine Overseas Limited following in October 2021. The companies charged overseas clients to register UK companies, provide registered office addresses and act as company secretaries.

UK Sinosia Business Limited provided a registered office address to at least 2,597 client companies. Longshine Overseas Limited acted as company secretary to a further 1,746 and appeared to be squatters in a genuine Fleet Street address without the landlord’s knowledge or consent.

They also used a single apartment in London as the registered office for 2,873 companies.

Insolvency Service investigations discovered that client fees were being paid into personal or third-party bank accounts in China. The listed director was on the record admitting UK Sinosia Business Limited and Longshine Overseas Limited were essentially “one company”, with the same operating mode, structure and clients. She claimed UK Sinosia Business Limited was registered as a trust and company service provider, but this was granted to a separate Hong Kong company with no legal standing in the UK

Both companies appeared in reality to be under the control of a single Chinese national up until November 2024. His identity had not been disclosed on the Companies House register, and he denied all knowledge of the companies. But records showed he was the proprietor of the leasehold address, and had a signed rental agreement with UK Sinosia Business Limited

The Official Receiver has been appointed liquidator of Longshine Overseas Limited and UK Sinosia Business Limited.

Dave Magrath, Director of Investigation Services at the Insolvency Service, said “Unregulated companies are bad for the economy. Public confidence in the Companies House register depends on the information on it being accurate.

“In this case, thousands of companies with no UK base were registered by UK Sinosia Business Limited and Longshine Overseas Limited. Both companies also had no presence in the UK and were based in China.

“We won’t stand for a business model based on abusing the Companies House register which damages consumer confidence and presents real risks to our economy. We’re working with our partners across government to tackle these rogue entities and protect the UK’s reputation as a trusted place to do business.”

Martin Swain, Director of Intelligence and Law Enforcement Engagement at Companies House, said “The Companies House register is a trusted foundation for doing business and plays a vital role in supporting economic growth.

“We are committed to working closely with enforcement partners to identify and tackle misuse of the register, improve transparency and ensure the register reflects accurate, reliable information.”