COMPANIES HOUSE IN THE 1970S

Who can believe it? I’ve been in the corporate information services provision industry for over 50 years!

When Iwas a fresh-faced 13-year-old my sister, Mary (Lovell), managed to get me a casual job at Companies House in City Road, London EC1, during my school holidays, working for pocket money with her employer D&D Law Agency Services Limited (D&D), based in Lincoln’s Inn Fields.

My role was to look up company numbers. This would entail moving metal flipcharts from side to side to locate company names that were alphabetically placed in the carousels. When a company was registered with Companies House it would produce a thin sliver of card containing the company name and number. The sliver of card would then be manually inserted into the relevant flipchart. Ioften watched Companies House staff inserting companies into the flipcharts by moving the existing card entries up and down. Ithought that this was an inefficient and laborious task that could surely be improved in some way or form. Iwas paid the princely sum of three pennies per number– that’s three pennies before decimalisation (12 pennies to the shilling and 20 shillings to the pound) and is the equivalent of 1.25 pence in today’s money.

As a progression over the next few years, Iwas trusted to cross the road to the Registry of Business Names (RBN), which contained hard-copy papers for all non-limited businesses. There, Iwould locate business name entities and partnerships and transcribe the details from file entries onto a report template.

The Registry of Business Names was created under the Registration of Business Names Act 1916. It was initially intended as a record of enemy aliens or former aliens who were not trading under their own names, but later served as a register of persons or firms trading under a business name other than their own. Persons or bodies trading in their own names were not required to register. Under the Companies Act 1947, the register was extended to cover limited companies trading under a different business name.

The register was never comprehensive. It has been estimated that only 50-60% of those required to register did so, and that many cessations and changes of ownership were never registered. Following a review of company and business name registrations in 1980-81, the Companies (No. 2) Act 1981 repealed the Companies Act 1916 and the relevant sections of the Companies Act 1947. The RBN was then closed on 26 February 1982.

At the age of 16, Ileft school after being offered a full-time job with D&D. Ijoined as a junior search clerk with the ambition of becoming a manager by steadily working my way up the ladder.

During the 1970s, every registered company would have its documents inserted into a hard file, which was the size of a large loose-leaf register with paper documents bound together by a string inserted through punch holes in the documents. Some large companies had huge files that were sometimes six to twelve inches thick with several volumes, so you could end up with five to ten files that were a foot thick to search just one company’s records. To obtain a company file or files, you would first need to look up the company number from the metal flipcharts, purchase and write out a ticket, and then submit it. The files were delivered to the Agents’ Room, which was large and housed around 50 to 100 search agents each day. Copies of the documents were available if you chose to do this yourself from the photocopiers provided in the Agents’ Room. Still, as you can imagine, it was a considerable task to unpick the string, make the relevant copy, return the document to the correct place, and re-string the file. As a result, most of the information was obtained by leafing through the document pages and transcribing the relevant company information onto a pre-printed template.

Once all the required information was gathered and handwritten onto a full search or other pre-printed template, it was then taken back to our offices in Lincoln’s Inn Fields and typed onto a report sheet. The report was then generally posted or delivered to clients.

The reports were typed either by using a manual typewriter or a state-of-the-art golf ball typewriter. For those of you who are not old enough to remember, this was a typewriter that featured a spherical typing element with an interchangeable head, often likened to a golf ball.

In 1976, Companies House relocated its headquarters from London to Cardiff, the same year the then Queen sent her first email on the precursor to the internet, ARPANET, and Apple was founded in the United States by Steve Jobs and Steve Wozniak. Companies House also started microfilming, creating microfiche copies of new paper documents.

The introduction of microfiche revolutionised the corporate services information industry. This meant that we no longer needed to sit in the Agents’ Room all day and extract information on companies; instead, we could take the microfiche back to the comfort of our offices and type the required information directly onto a full search report sheet, using the microfiche copies of company files. We could also provide copies of documents using a microfiche reader/printer. However, these machines were largely heat-based and often caught on fire. We could also look up numbers from our roll microfiche film, which was updated weekly and viewed through special roll film microfiche readers by scrolling left and right to find the relevant company along with its company number.

PROGRESSION DURING THE 1980S

In 1980, the Companies Act 1980 was introduced. During the same year, Tim Berners-Lee began working on ENQUIRE, the system that would eventually lead to the creation of the World Wide Web, something many of us are fond of now. In 1981, another Companies Act was introduced (Companies Act 1981, surprisingly enough).

In 1981, my sister Mary and Idecided to go it alone and start our own business, based in Cardiff. This was a strategic move, given that Companies House was then headquartered in Cardiff, and, of course, the fact that Cardiff was a far cheaper place to set up a business than London.

We purchased an existing tiny micro business from a gentleman, whose solicitor son had set him up with a few small law firm clients to carry out company searches. We paid the princely sum of £1000 for the business, which was called Severnside Searches. We immediately changed the name to Severnside Company Services to reflect that we not only provided UK company searches but also offered a range of company formation and secretarial compliance services.

The corporate searches we provided at this time were essentially for companies registered in England and Wales. However, we would sometimes be asked to provide searches on Scottish and Northern Ireland companies, whose files were kept, at this time, in their respective registries. We also conducted a few searches in offshore jurisdictions, such as Jersey and Guernsey, primarily through an agent.

The business continued to tick along for the next few years. However, Iwas still relatively young and missed the bright lights of London, so in 1984 Idecided to sell my share in the business and move back to London. My sister Mary continued for a few years after Ileft, along with an accountant who had purchased my share of the business. My sister would then go on to sell her share to one of her employees a few years later.

Upon returning to London, Iwas offered a job as General Manager at my former employer, D&D, which Iaccepted.

In 1985, Companies House introduced Stem, which was its first computerised information processing system. That year, Vodafone launched the UK’s first mobile phone network.

My career was going well working for D&D and Iwas eventually offered a directorship, which Iaccepted. During this period, technology was advancing rapidly, and the use of facsimile (fax) to send reports to clients quickly sped up the process, making it the state-of-the-art method for sending reports and documents. However, compared to modern methods of scanning and emailing, it was a protracted exercise, as it could take several minutes for the fax to scan each page.

In the short space of history between the typewriter and the personal computer sits the electronic word processor. We purchased one of these machines to help with typing our memoranda and articles of association for our company formation work. They resembled large typewriters in appearance and represented a significant improvement over their mechanical counterparts. However, every set of bespoke memorandum and articles typed using word processors still had to be meticulously checked, as due diligence in providing the correct constitution for the company remained, and remains, an essential aspect of company formation services.

During my years working at D&D Ibecame the company’s representative for the Law Stationers Association, a trade body that looked after the interests of company search and formation agents. This body then evolved into the European Association of Company Registry Users (EACRU), with David Durham as its Chairman– he had previously served as Companies House’s Registrar of Companies.

EACRU became an essential body during the period, as it opposed several, what we would describe as, madcap changes that Companies House was seeking to impose. One of these changes was to sell its entire microfiche library to a commercial company, which would have left a vast gap in company documents that it could not then provide to the general public. EACRU opposed this vehemently, which culminated in meetings with Ministers, which Iattended. The ultimate result of this lobbying was that Companies House eventually dropped the idea of selling the microfiche library, which was a great relief to the corporate information services industry and its clients.

INNOVATION DURING THE 1990S AND BEYOND

In 1990, Companies House opened regional offices in Manchester, Birmingham, and Leeds. In the same year, Tim Berners-Lee defined the web’s basic concepts, including URL, HTTP and HTML, and wrote the first browser and server software.

In 1992, whilst my position at D&D was secure, Ifelt that the Company was not going in the right direction for me, so Idecided to approach the owners of Severnside Company Services to buy back in and set up a London office for the partnership. The idea was to enhance the existing business, which was solely trading in Cardiff, by targeting clients in the lucrative London market.

The owners of Severnside agreed with my proposition, and Ithen joined the Company as part-owner and Partner.

During these years, Iremained fully involved with EACRU and played a key role in rebranding the organisation as the Association of Company Registration Agents Limited (ACRA). In later years, ACRA would go on to serve as a powerful lobbying tool for my business, the broader industry and its partners. My involvement in ACRA was also instrumental in my endeavours to act in the best interests of our clients, who are primarily law librarians, to keep them up to date with the intentions of Companies House and influence their decisions in the interests of the corporate information services industry.

Following the retirement of David Durham as Chairman of ACRA, Iwas primarily involved in securing the appointments of two further Registrars of Companies, Stephen Curtis and the current Chairman Gareth Jones. In recent years Iwas instrumental, on behalf of CRO Info, in shaping the current Companies House Service into a fit-for-purpose platform, which replaced Companies House Direct. This was achieved through CRO acting as unofficial consultants to Companies House, providing suggested enhancements and pointing out anomalies to bring the service up to scratch and make it fit for purpose.

In 1995, digital scanners were introduced in Companies House. Also this year, Microsoft introduced its operating system, Windows 95, featuring new functionalities such as the taskbar and Start menu. To install Windows 95, it required 13 floppy disks, but as painstaking as this process was, it revolutionised home computing.

In 1997, Companies House introduced Companies House Direct (CHD), its first online search system. Its website was also launched this year. Aside from the website and CHD, other significant tech developments included IBM’s computer, Deep Blue, beating the human world chess champion Gary Kasparov.

Given the imminent rise of the Internet, we decided to create our first website. The domain ‘www.severnside.co.uk’ was already taken by a large waste management company in Wales, so we decided to register the alternative, but phonetically similar, domain of ‘www.7side.co.uk’. We also started using email, which signalled a new era in digital communication for us, and this would prove to be a central feature in our future communications.

In 1998, Companies House introduced e-filing of directors’ and annual return forms. In the same year, Google was incorporated in America by co-founders Larry Page and Sergey Brin. Their office? Agarage in Menlo Park, California, handling 10,000 queries a day.

In 2000, Companies House introduced WebCheck online search provisions aimed at smaller, casual users.

The introduction of CHD by Companies House was the game-changer for us, though. This allowed us to capture digital images of documents. We were also one of the first companies to introduce the Companies House extranet service for our clients’ usage. This service enabled our clients to access our CHD account and order individual documents or document packages. We would then invoice each client at the end of the month, saving them the bother of maintaining an account with Companies House. More importantly, as an added value proposition, we were there to address any anomalies and issues that often arose with the CHD system, which saved our clients time and hassle that they would have otherwise incurred by dealing with Companies House directly.

However, all the documents were also available on microfiche, and it was still more cost-effective to copy the documents from the microfiche records and deliver them to clients. As a result, we employed 10 extra staff members, purchased an additional five microfiche reader/printers, and began to see a significant surge in demand for our corporate information services.

In 2001, the Companies House WebFiling service went live, and electronic incorporations commenced. Also, Apple introduced the iPod. The Walkman generation was amazed at the whopping 1000 songs they could keep in their pocket.

Much to our annoyance, given the investment we had made, Companies House stopped updating microfiche in 2002. Its rationale was that more than 60% of all live companies had a complete electronic record.

In 2003, Companies House announced that, due to technical advances, it would be closing its regional offices in Manchester, Leeds and Birmingham. Also in 2003, more technical advances were witnessed as the Human Genome Project was completed, successfully sequencing the human genome.

The year 2003 also saw a significant change in our business. The then Managing Director retired, and we converted the business from a trading partnership to a limited company, changing our name to 7side Limited to align with our domain name.

Over the next few years we experienced steady growth in the business, and we took a significant step by introducing worldwide corporate searches to our portfolio. Whilst we had already provided searches in offshore jurisdictions such as Jersey, Guernsey, and the Isle of Man, as well as Ireland and Scotland, the move to provide searches worldwide proved pivotal to the overall success of my businesses to date.

In 2006 the Companies Act 2006 received Royal Assent (and was implemented in October 2009). In the same year, Twitter was launched.

In 2008 the Companies House Information Processing System (CHIPS) was introduced. This system replaced its then-20-year-old electronic processing system, Stem. In the same year, the world’s most powerful particle collider, the Large Hadron Collider, began accelerating particles, enabling scientists to explore fundamental questions about the universe.

Another part of our business was to provide property search services, including personal local authority searches, drainage and water searches, all related to property conveyancing transactions. The then Labour Government introduced, under the Housing Act 2004, a Home Information Pack (HIP), sometimes referred to as a Seller’s Pack, which was to be provided before a property in England and Wales could be put on the open market for sale with vacant possession. We invested heavily in HIPs as we were certain at the time that it would be a growing and lucrative market in which to participate fully. The whole dream came crashing down when, in May 2010, the incoming Conservative/Liberal Democrat coalition government announced its intention to scrap HIPs with immediate effect.

Not to bang my drum too loudly, but one of the initiatives Iam particularly proud of, which made a profound difference for our law firm clients, was creating and introducing Companies Court checks (winding up searches). Imanaged to make this happen by arranging a meeting with the Manager at the Royal Courts of Justice (RCJ). The only way to search the central index of winding up petitions at the time was to use a premium-rate telephone line or visit the counter at the RCJ to inquire whether there were any pending winding up petitions on corporate entities. This was a laborious and lengthy process as you would either have to telephone the premium rate line, which was often very busy or engaged, or join the queue up at the counter at the RCJ to ask one of the counter staff to carry out the check for you.

At the meeting with the Manager of the RCJ, Iexplained that we already dealt with most of the law firms that would call its overstretched premium rate line and that we could ease the pressure on the RCJ if it provided us with access to the system to carry out the checks. Aweek later, Ireceived an email from the Manager, who stated that they would provide access via public terminals at the RCJ and that we could access these for an agreed fee.

The result of this initiative today is that we now carry out, on average, over 400 winding up searches per day for law firm clients, saving them a considerable amount of time and cost.

Around a year later, the effects of our futile investment in HIPs left our company in a weaker financial position. However, our corporate information services division continued to grow, particularly with the introduction of new international search services and our winding-up search service.

In 2011, and partly as a result of the money we wasted on investing in HIPs, the company needed financial investment to progress. We were subsequently approached by a prominent Australian organisation called Globalx, the business model for which was largely aligned with our own. We shared a similar vision to move the business forward, and as a result, we sold our company to Globalx later that year. One of the conditions of sale was that Istay on as Executive Director to run the business for them.

The next few years were difficult as, unfortunately, Iwas directed to go down a different path by the new owners, whose vision began to diverge from my own. Imanaged to stay in my position for three years before Ifinally left the company.

Several years previously, a fellow director of The Association of Company Registration Agents Limited, Phil Vibrans, had indicated that he’d like to go into business with me at some point. As a result of leaving my position at Globalx, Phil and Iagreed that Iwould invest in his business, which was then known as Company Registrations Online Limited, to create a corporate information services division, which we would name ‘CRO Info’.

In 2015 Companies House provided the public with free access to all digital data via the Companies House Service (CHS) and an application programming interface (API).

CHS is currently the system provided by Companies House to obtain UK company documents and, as previously mentioned, we at CRO were instrumental, through consultation, in ensuring that Companies House made the system fit for purpose before it decommissioned Companies House Direct in 2023.

The CRO Corporate Services team in Cardiff– Sam has had a long association with the city

THE LEGACY

CRO Info has been providing corporate information services for over 10 years. As a result, we have substantially grown our business, enabling us to work with the majority of the UK’s top 100 law firms. Earlier this year, we changed our company name to CRO Corporate Services Limited, as this more accurately reflects the company’s current products and services.

As a result of our continued success, we were approached by large organisations to sell our company. However, having personal experience of selling my previous company to Globalx, Iwas extremely wary about agreeing to a trade sale, given that out of the nearly 30 people we employed at 7side, only one person remains from the original workforce. My experience was that, despite receiving assurances from the purchasing company not to rationalise and eliminate existing staff, the opposite occurred, which appears to be the norm when large organisations acquire smaller entities.

In addition, Phil and Iare not ready to fully retire at this current time, and we both agreed that we did not want to eventually sell the company as a traditional trade sale, as we wanted to leave a lasting legacy for our loyal employees and clients. We then found out about a brilliant alternative to a conventional trade sale, following some advice from our lawyers.

In August 2023 my business partner and Isold CRO to an Employee Ownership Trust (EOT). The way we structured our EOT means that the Trust now owns the entire company on behalf of our employees. The Trust is managed by trustees who represent the interests of all employees. The structure allows employees to benefit from the company’s success without holding individual shares or having direct voting rights. This means that our employees receive a substantial tax-free bonus each year. Additionally, after the shareholders receive the valuation payment for their shares, the employees will all share in the total distributable dividends payable each year. This will result in employees receiving life-changing amounts of money on a continual annual basis.

I won’t deny that there are tax advantages for the outgoing shareholders relating to the sale price, but the main reason we opted for this was so that our employees, some of who have been with us for over 20 years, benefit from the EOT. We are already seeing enhanced employee engagement and commitment, which has led to improved performance and innovation from our employees.

Finally, on a personal note, the legacy Iwant to leave when Ifinally retire, which will not be anytime soon, is that our loyal customers will always receive the same level of service from our employees, which will be achieved through effective succession planning. The integrity, identity, values and culture of the company will remain, as the very nature of an EOT means that it will always be there for the benefit of its loyal employees and customers.