The requirement for companies to notify Companies House of subsidiary undertakings is covered in sections 409 - 410 of the Companies Act 2006 (it was formerly section 231 of the Companies Act 1985). Sections 409 - 410 should be read in conjunction with SI 2008/409 and SI 2008/410.
Unless an exception applies all companies with subsidiary undertakings must disclose them in a note to their accounts at the end of each financial year.
Alternatively, if section 410(2) applies a company can opt to provide a full list of subsidiaries as an annex to the company's next annual return but this would also need to be explained in the notes to the accounts in question.
If a company fails to comply with this requirement the company and every officer commits an offence. The fine for this offence on conviction is one not exceeding level 3 of the standard scale which is £1000 and for continued contravention, a daily default fine not exceeding one-tenth of level 3 of the standard scale.
Enforcement wise Companies House only deal with this type of breach following a complaint. In the last five years we have had only two complaints where compliance was achieved without prosecutions taking place.