Business News - July
Companies Act
Businesses need to start thinking ahead now about the next wave of changes to be introduced under the Companies Act, say Clay Shaw Thomas.
Implementation of the Companies Act 2006 – the longest piece of legislation ever passed by Parliament – began in January 2007. The latest measures were introduced on 6 April 2008 and additional sections will come into force in October 2008 and October 2009. Key sections introduced in April include:
- for accounting periods beginning after 5 April 2008, private companies will have nine months instead of ten to prepare and file accounts with Companies House. For public companies, the period falls from seven months to six.
- private companies no longer need to have a company secretary.
- an auditor and a company can make a limited liability agreement, under which the auditor’s liability for losses suffered by the company due to negligent auditing of its accounts can be limited to a proportion of losses or an upper limit.
Now Clay Shaw Thomas is warning that businesses also need to get to grips with future changes, so that they understand how they could be affected. These include:
1 October 2008: all companies must ensure that at least one director is a “natural person” (an individual, not a corporate body). This is designed to reinforce money laundering regulations by reducing the risk of transactions favouring anonymity.
1 October 2008: company directors must be at least 16.
1 October 2008: the restriction on private companies from giving financial assistance to help acquire or purchase its own shares is removed.
1 October 2009: all addresses held for directors will default to service addresses. Directors will be able to keep residential addresses private and undisclosed on the public record.
Other changes linked to the Companies Act include increased penalties for the late filing of accounts. From 1 February 2009, penalties for private companies will range from £150 for up to a month late to £1,500 if accounts are late by more than six months; for public limited companies, the penalties for the same periods are £750 and £7,500.
And from 1 October 2008, there will be a Companies House requirement for companies to file annual returns electronically. More than 80 per cent of all annual returns are now submitted electronically and as implementation of the Companies Act requires amendments to the annual return in October 2008 and 2009, Companies House believes the time is right to scrap paper returns in favour of online filing.
Clay Shaw Thomas director David Thomas said: “The Companies Act involves some complex issues and companies need to be clear about how they are affected by existing and future measures. An example of this is that most of our Limited Company clients will have to adopt or revise their existing Memorandum and Articles to come into line with the new act. Anyone seeking clarification or advice is very welcome to contact us.”
To find about more about how we can help you, contact us on 01656 867167 or at tellmemore@clayshawthomas.com to arrange a free, no obligation first meeting.
