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As of 1 April 2007 the deposit to be submitted when filing a winding up petition at court will increase from £655 to £670 (SI 2004/593 as amended by SI 2007/521). |
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Winding up petition deposit increase See CLM: ¶7639, ¶7640, ¶7659 |
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LEGISLATION |
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DTI consultations on implementation of EC Directives The DTI has published consultation papers on the implementation of four EC Directives. |
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EC Directive on capital maintenance and share capital See CLM: ¶730 As part of its consultation on implementation of the Companies Act 2006, the Government has published its consultation on implementation of the EC Directive on capital maintenance and share capital (EC Directive 2006/68). The Government’s view is that although the limited amendments permitted by the Directive might provide some additional degree of flexibility for companies, it will increase legislation in an already complex area of company law. Further, UK law is considered to be wholly consistent with its provisions. As a result, the Government does not propose to take any further action to implement the Directive. The consultation can be found at paragraphs 6.8 to 6.23 of “Companies Act 2006 – A Consultative Document”, which may be downloaded from the DTI’s website (www.dti.gov.uk/bbf/co-act-2006/index.html). Comments are requested by 31 May 2007. EC Directive on company reporting See CLM: ¶4226+ On 5 March 2007, the DTI began consulting on proposals to implement the new EC Directive on company reporting (EC Directive 2006/46) which must be implemented into national law by 5 September 2008. The Government intends to include the necessary provisions in the package of secondary legislation that will implement the accounting provisions in the Companies Act 2006. The main proposals are: » to increase the thresholds for small company/group status to £6.5 million (turnover) and £3.26 million (balance sheet total); » to increase the thresholds for medium-sized company/group status to £25.9 million (turnover) and £12.9 million (balance sheet total); » to permit, but not require, all companies preparing accounts under the Companies Act using UK Financial Reporting Standards (FRS) to use fair value in accordance with IAS 39 in both their individual and consolidated accounts. The ASB will consider what, if any, action needs to be taken in respect of UK accounting standards; » to require all medium-sized and large companies to disclose off-balance sheet arrangements (medium-sized companies will be allowed to limit their disclosure to information about the nature and business purpose of the arrangements); » to require all medium-sized and large companies which prepare Companies Act accounts using UK FRS to disclose related party transactions (there will be an exception for transactions in a group provided any subsidiaries involved are wholly-owned; the Government is considering whether any exemptions should apply to medium-sized companies); and » to require listed companies to produce an annual corporate governance statement in the annual (directors’) report or as a separate report. The consultation paper can be downloaded from the DTI’s website (www.dti.gov.uk/consultations). Comments are requested by 1 June 2007. EC Directive on statutory audits See CLM: ¶4290+ On 5 March 2007, the DTI began consulting on proposals to implement the new EC Directive on statutory audits (EC Directive 2006/43) which must be implemented into national law by 29 June 2008. The Government plans to bring into force the majority of implementing regulations in April 2008. The provisions would apply to reporting periods beginning on or after the date when the regulations come into force. The main proposals are: » to make new regulations regarding the maintenance of a public register of auditors. This will be fully operational by June 2009; » to amend the new Companies Act (Sch 10 CA 2006) so that an outgoing auditor will be obliged to provide all relevant information to the incoming auditor. The detail of this provision will be set out in rules of the recognised supervisory bodies who are responsible for supervising the auditors registered with them (currently these are ICAEW, ICAS, ICAI, ACCA and AAPA); » to amend the Ethical Standards set by the Auditing Practices Board so that audit fees cannot be influenced or determined by the provision of additional services to the audited company nor based on any form of contingency; » to ensure that statutory auditors (whether individual or firms) may be dismissed only where there are proper grounds. Currently, the Government prefers that: the dismissal of an auditor without proper grounds should be treated as unfairly prejudicial to the shareholders entitling them to make an application to court; and the court should be able to order the re-appointment of the original auditors, the appointment of new auditors, or any other remedy which it deemed appropriate; » to amend the regulations regarding the disclosure of auditor remuneration so that medium-sized companies will have to supply additional information on non-audit services in response to a request from the Professional Oversight Board. The Government is considering whether the same should apply to small companies who have an audit; » various provisions relating to the audit of public interest entities (these are listed companies, banks and building societies and insurance undertakings); and » various provisions relating to third country auditors (these are the auditors of non-EU companies who are listed on an EU regulated market). The consultation paper can be downloaded from the DTI’s website (www.dti.gov.uk/consultations). Comments are requested by 1 June 2007. EC Directive on cross-border mergers See CLM: ¶6530+ On 5 March 2007, the DTI began consulting on proposals to implement the new EC Directive on cross-border mergers (EC Directive 2005/56) which must be implemented into national law by 15 December 2007. The Directive introduces for the first time a legislative framework that enables cross-border mergers between companies in the EEA; UK law does not provide for cross-border mergers at present. The Government plans to implement the Directive by a single set of self-standing regulations which will come into force on 15 December 2007. The new law will apply only where there is a genuine cross-border element to the merger. This means that the merger must involve at least two companies governed by the laws of different member states. It is proposed that the types of companies which may be involved in the merger are: » public and private companies limited by shares or guarantee; » unregistered companies; and » unlimited companies. The proposed merger procedure is similar to the current UK law on domestic mergers of public companies (see ¶6536+). It will allow for three types of merger: » merger by absorption (where an existing company absorbs one or more other merging companies); » merger by formation of a new company (where two or more companies merge to form a new company); and » merger by absorption of a wholly owned subsidiary. The Directive also requires employee participation in the merger where such arrangements exist in one or more of the merging companies. Employee participation means the right of employees to influence board appointments. This right does not exist in the UK, although there is nothing to prevent employers and employees from creating such arrangements voluntarily. Employee participation does exist in other member states (such as Germany, Austria, the Netherlands and Sweden). Therefore, a company resulting from a cross-border merger that has its registered office in the UK may have to provide for employee participation. The proposed employee participation arrangements are similar to the current UK law on establishing a European Company (see ¶95+). The consultation paper can be downloaded from the DTI’s website (www.dti.gov.uk/consultations). Comments are requested by 1 June 2007. Comment: In the UK, corporate restructuring practice has seen greater use of takeovers rather than mergers. As part of the consultation, the Government is asking for views on whether companies would consider using the merger framework to undertake a cross-border merger in the EEA. It will be interesting to see whether the market feels the need for this procedure. |