The computer infrastructure changes which are taking place at Companies House between 23rd and 25th February 2008 has given rise to further speculation that they will begin offering electronic company formation services to the public.
It is fair to say that there are more than a few registration agents eagerly awaiting both the immediate and longer term results of the technical overhaul.
After making several enquiries at differing levels of the organisation, it is still remains unclear why the replacement of the Companies House mainframe computers was necessary.
Their systems seemed to work fine before and there appeared to be no area of their operations which fell short of a reasonable efficient system.
Of course, as with any computer system, maintenance and timely replacement are all part of a good IT strategy and the work being carried out over this weekend could merely be the latter.
DVLA Lessons
The similar lesson was learnt after the DVLA, the government body responsible for vehicle licensing and registrations began providing personalised car number plates directly to the public in 1989.
Up until that point, the DVLA used a number of independent agents who in turn provided services to individuals. The effects on the market were widely felt as the public choose to cut out the “middle-man” and buy directly, often at a cheaper price.
There are both compelling arguments both for and against Companies House offering online formation services.
Supporting Arguments
Those in the supporting corner would argue that they already have a large fully functioning call centre with skilled staff. They spend their days providing company registration support services at the moment for the relatively complex Form IN01 old style formations.
Advocates might also suggest that incorporation costs could fall as a result of selling directly to the public. The standard company formation fee of £13 currently represents the level at which Companies House breaks even and therefore might be sustainable even when it offers electronic services directly.
Misadventure
Those who would view an incursion by Companies House in electronic incorporations as a misadventure would argue, that the commercial nature of business start-ups is too aggressive, fast moving and generally demanding for a government body to cope with. Its present role and a second tier formation agent and primary contact for expert incorporation businesses is one to which it is suited.
Conclusions
It is unlikely that from Tuesday 26th February 2008 or any time soon after Companies House will offer electronic formation services. There has certainly been no announcement which one would expect to proceed such as move.
Politically, it would be construed by many as an insensitive to the many thousands of registration agents in England, Wales and Scotland.
From a practical point of view, anything is possible but again many would suggest that the risks are too great. After all, it is currently in Companies House’s favour that a commercial buffer should remain between them and the general public.
