Company Law Reform

This article, written in December 2005, has now been superseded with the introduction of the Companies Act 2006.

After 3 years of consultation, the Government has now published proposals to update the UK's arcane company law system. The report suggests a raft of measures aimed at cutting red tape, improving transparency and clarifying the duties of companies and their directors.

The main areas of change, which will affect small companies, are as follows:

• Increasing the turnover threshold, below which companies are entitled to exemption from a statutory audit, from £1m to £5.6m (already enacted),
• Simplifiying the statutory format for small company accounts,
• Removing the option which allows companies to file abbreviated accounts, instead of full accounts, on the public record at Companies House,
• Reducing the Companies House filing deadline for accounts from 10 months after the year end to 7 months, for private limited companies,
• Removing the requirement for small companies to hold an Annual General Meeting,
• Abolishing the office of Company Secretary in small companies,
• Authorised Share Capital should be abolished.

"Most of the above proposals are now either already enacted or are at the White Paper stage", commented Ian Piper, a partner at Whiting's Ely office." The broad thrust of the project has to be commended, as most proposals will help the thousands of small corporate businesses in this country."

Practical Examples of our Limited Company Accounting Expertise

Incorporating new companies with more than one class of share, to facilitate greater flexibility in control and future dividend payments. Advising in relation to a shareholders agreement, between the founders, on day 1.

Advising in relation to your IR35 and section 660 settlement legislation tax exposures. Attending Board and General Meetings, taking minutes and advising on correct procedure.