Removal of caps on fines for Companies Act offencesPrint publication
The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Fines on Summary Conviction) Regulations 2015 came into force on 12 March this year. The Regulations give effect to section 85 of the Legal Aid, Sentencing and Punishment of Offenders Act 2015, removing the cap on the maximum fines levied for summary offences under the Companies Act 2006 (2006 Act), previously set at £5,000 [or more] in the magistrates’ courts. Magistrates can now impose whatever level of fine they consider appropriate for such offences.
In the past some company directors may have taken a fairly relaxed approach to ensuring that, for example, the annual return is filed on time, in the knowledge that the fine, should one be imposed, would not be substantial. Such an approach would not be wise in the future – fines for non-compliance could be large.
Corporate offences that will be subject to the new fining regime include breaches of the following sections of the 2006 Act:
section 167 – the duty to notify the Registrar of Companies of a person becoming or ceasing to be a director
section 438 – the failure by a public company to lay accounts and reports
section 451 – default in filing accounts and reports
section 858 – failure to deliver the annual return.
Some companies may need to revisit their approach to compliance with the 2006 Act filing requirements to ensure they do not end up with a substantial fine.