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Changes to corporate filing requirements

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22/10/2014

Changes to filing requirements
The Small Business, Enterprise and Employment Bill (the Bill), which the Government anticipates will become law before next May, will introduce changes to a company’s filing requirements.

Annual confirmation statement
The Bill will remove the requirement to file an annual return; instead, all companies will be required to deliver to Companies House a confirmation statement stating that the company has delivered all the information it was required to provide in the period to which the confirmation statement relates. The confirmation statement must be provided before the end of the relevant review period, which will be the 12 months from incorporation and every 12 months thereafter.

The duties to deliver information that are the subject of the confirmation statement include: (i) details of change of registered address; (ii) details of company registers relating to directors, secretaries and persons with significant control (PSCs); (iii) any obligations that arise as a result of a decision by the company to keep any of its registers on the central register; and (iv) details of where a company keeps company records if it uses a single alternative inspection location (SAIL).

When providing a confirmation statement the company will have to provide (i) any notice of change in the company’s principal business activities; (ii) a statement of capital (if there is share capital), unless there has been no change since the last statement was delivered; (iii) a statement as to whether any of the company’s shares were admitted to trading and whether the company is subject to DTR5 of the Disclosure and Transparency Rules (which includes AIM as well as Main Market companies); and (iv) certain information regarding shareholders, depending on the type of company.

Statements of capital
The Bill amends the existing requirements relating to the delivery of a statement of capital, removing the requirement for companies to include the amount paid up and unpaid on each share. Instead, companies will have to specify the aggregate amount unpaid on the total number of shares.

Maintenance of company registers
Private companies will have the option of keeping information that must currently be stored on the register of members, of directors, of directors’ residential addresses and of secretaries, on the public register maintained by the Registrar of Companies, thereby dispensing with the requirement to maintain those registers separately.

Directors’ consent to act
The Bill will also remove the requirement for a newly appointed director to provide a consent to act, and instead the company will be obliged to make a statement that the appointee has consented to act. The Registrar of Companies is also subject to a new duty to notify newly appointed directors, as soon as reasonably practicable after their appointment is registered, of their role and duties as a director.

Directors’ disqualification
The Bill will empower the Secretary of State to apply to the court for a disqualification order on the grounds that a director has been convicted of certain offences overseas. These include offences committed outside Great Britain which correspond to indictable offences under the law of England and Wales (or Scotland) in connection with (i) the promotion, formation, management, liquidation or striking off or a company (or any similar procedure); and the receivership of a company’s property or a person being an administrative receiver of a company (or a similar position).

The Secretary of State will also be empowered to accept a disqualification undertaking from a person instead of applying or proceeding with an application for a disqualification order on this new ground.

The matters that the court must take into account when determining whether a person should be disqualified will be expanded, and will include enabling the court to take conduct in relation to overseas companies into account when considering a disqualification application in relation to the conduct of a director of an insolvent company. The court may also consider (i) the extent to which the person was responsible for the causes of any material contravention by a company of any applicable requirement; (ii) the extent to which a person was responsible for the causes of a company’s insolvency; and (iii) the nature and extent of any actual or potential loss or harm caused by the person’s conduct in relation to the company.

WM comment
The replacement of the requirement to file an annual return with a confirmation statement should make life a little easier for hard-pressed company secretaries. The same is true of the (modest) changes to the completion of statements of capital, which practitioners and company secretaries alike can find troublesome to complete, in particular in the case of large public companies.

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