What’s changing?

We’re seeing a marked increase in cases where the Department for Enterprise, the Government Department with responsibility for the Companies Registry, are seeking at the High Court of Justice of the Isle of Man a claim for orders pursuant to Section 285(1) of the Companies Act 1931 and Section 26(4) of the Companies Act 1992 to compel companies and their directors to file overdue Annual Returns.

What does that mean in practice?

When the Department goes to court, orders are being sought requiring companies to file all outstanding Annual Returns and pay:

• the annual filing fee (£380 per return)
• the late filing penalty (up to £250 per return)
• the department’s costs

For companies that haven’t filed for several years, this can quickly reach thousans of pounds.

Is this sudden?

No. Before court action, companies and directors are typically sent multiple written notices warning of the consequences of non‑compliance, often escalating to correspondence from the Attorney General’s Chambers urging the company to restore good standing within a set timeframe. Ignoring these notices isn’t a viable option; once a Court order is made, failure to comply can lead to further sanctions

Is this a new power?

Not at all. The Department has long had statutory powers to pursue delinquent companies.  What’s changing is the willingness to use those powers more consistently.  The former practice some adopted, simply allowing a company to be “struck off” and assuming that was a free exit, is increasingly risky and no longer a safe strategy.

What should solvent companies do instead?

Where appropriate, solvent companies can apply for formal dissolution through the Companies Registry (for example, section 273A of the Companies Act 1931 or section 190 of the Companies Act 2006), paying the prescribed fee (currently £95). This is the correct, orderly and cost‑effective route to closure.

Why now?

International scrutiny matters. External assessments (e.g., MONEYVAL, OECD, and EU reviews) look not only at what powers exist in law, but whether authorities are actively enforcing compliance and can demonstrate it. Increased use of court orders aligns with those expectations and encourages better corporate hygiene across the register.

What directors should do next

1. Stop the clock: Don’t ignore reminder letters. If your company has outstanding returns, act immediately.
2. Bring the company back into good standing: File all overdue Annual Returns and settle fees/penalties to avoid court escalation.
3. Choose the right exit (if applicable): If the company is solvent and no longer needed, consider a formal dissolution via the Companies Registry rather than waiting to be struck off.
4. Get advice early: The sooner you review your options, the more flexibility (and lower cost) you typically retain.

Final thought

If you previously decided to “let the company be struck off” in the expectation that the Registry would remove it free of charge, that approach is now high‑risk. The safer move is to regularise your position and where appropriate, proceed with a formal dissolution through the proper channels.

We can help.  If you’d like support bringing a company back into good standing or navigating a formal dissolution, get in touch and we’ll guide you through the process.