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COMPANIES ACT 2006: IMPLEMENTATION |
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The final text of the Companies Act 2006, explanatory notes and tables of destinations and origins are now freely available to download at: http://www.opsi.gov.uk/acts/acts2006a.htm. The Act received Royal Assent on 8 November 2006. To see when specific sections of the Act will or have come into force, check the implementation timetable on the FL Memo Ltd newsletter homepage (follow the link to “Companies Act 2006 implementation timetable”). This document will be updated as new secondary legislation is passed and further announcements are made. The implementation timetable is up to date to the recent announcements (see CLM 2007 Newsletter Issue 10). |
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Companies House consultation on late filing penalties See CLM: ¶4281 Companies House has issued a response to last year’s consultation on the subject of penalties for the late filing of accounts (“Late Filing Penalties: Implementation of Section 453 of the Companies Act – Response to Consultation”). The proposed level of penalties is set out in regulations on the subject (see below). The regulations generally received a positive response, with the majority of respondents holding the view that the proposed penalties would encourage more companies to file their accounts on time. Some respondents expressed concern that the regulations will impose an unjustified and disproportionate financial burden on small companies who do not file their accounts late deliberately, as many (such as small charities) do not have spare funds to meet any penalties imposed. A number of respondents also called for higher penalties for larger companies. Although sympathetic to the needs of small companies, Companies House has confirmed that the proposed penalties will remain applicable to all companies. Although some respondents called for punitive penalties to be imposed on companies that purposely or repeatedly file their accounts late to keep their accounts out of the public domain, Companies House did not consider this would be appropriate. Instead, directors who employ these tactics can be criminally prosecuted and disqualified. Companies House has the discretion not to impose penalties in certain circumstances. The consultation posed the question of whether Companies House will exercise its discretion differently under CA 2006 and the new regulations. Companies House has confirmed that its strict approach will not change. This means that penalties will not be collected only where the company can prove that exceptional circumstances prevented it from filing on time. |
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Secondary legislation In December, BERR published various regulations under the new Companies Act (see CLM 2007 Newsletter Issue 10). Some of the regulations are still in draft form pending parliamentary approval and others have already been made, subject to parliamentary objection. These regulations can be found on BERR’s website: http://www.dti.gov.uk/bbf/co-act-2006/made-or-before-parliament/page35232.html.
Trading disclosures See CLM: ¶259, ¶585 The new draft of the Companies (Trading Disclosures) Regulations 2008 is very similar to the previous one (see CLM 2007 Newsletter Issue 6). Several provisions have been reworded to make them easier to understand, for example “company record” is a defined term and the requirement to display a company’s name at the registered office and inspection place and at other business locations has been separated out into two separate regulations. Because of this, the regulation numbers have changed. Other than the clearer wording, there are only two new additions: » “orders for money” have been added to the list of a company’s documents that will have to display its registered name; and » companies will also be required to disclose on request their registered office address and the type of records kept there. The previous draft only required them to disclose the locations of any other inspection place and the type of records kept there. These draft regulations are due to come into force in their final form on 1 October 2008, along with the relevant provisions of the new Companies Act.
Records of debentures See CLM: ¶4007, ¶4019 New regulations under the Companies Act 2006 were published in December dealing with the fees that a company can charge for inspecting and copying its records of debentures. The Companies (Fees for Inspection and Copying of Company Records) (No. 2) Regulations 2007 (SI 2007/3535) are due to come into force on 6 April 2008, along with the new statutory provisions about debentures. They will replace the current provisions (in SI 1991/1998). A company will be able to charge £3.50 for each period up to an hour that a person spends inspecting its register of debenture holders (reg 2). For copies of the register, it will be able to charge the recipient for the reasonable costs of sending the copies to him, plus (reg 3): » £1 for each of the first 5 entries; » £30 for all or part of the next 95 entries; » £30 for all or part of the next 900 entries; » £30 for all or part of the next 99,000 entries; and » £30 for all or part of the remainder of the register. For copies of a debenture trust deed, a company will be able to charge (reg 4): » 10p for each batch of up to 500 words; plus » the reasonable costs of sending the copies out.
Company accounts See CLM: ¶4185+ Revised drafts of the following regulations were have now been published: » Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008; » Large and Medium-sized Companies (Accounts and Reports) Regulations 2008; and » Companies Act 2006 (Amendment) (Accounts and Reports) Regulations 2008. The original drafts of these regulations were discussed in CLM 2007 Newsletter Issue 6. The new drafts make minor changes to the previous drafts, including some changes to references (see January 2008 updates).
Late filing penalties See CLM: ¶4281 A new draft of the Companies (Late Filing Penalties) and Limited Liability Partnership (Filing Periods and Late Filing Penalties) Regulations 2008 replaces the previous draft entitled the Companies (Late Filing Penalties) Regulations 2008. The previous draft was also discussed in CLM 2007 Newsletter Issue 6. The regulations set out the same penalties as the previous draft. The only difference is that it also sets out the penalties for LLPs as well. Companies House has issued a response to last year’s consultation on the subject of late filing penalties, which is discussed above.
Audit See CLM: ¶4290 A final version of the Statutory Auditors and Third Country Auditors Regulations 2007 (SI 2007/3494) has been published. The regulations implement part of the EC Statutory Audit Directive (EC Directive 2006/43) and are due to come into force on 6 April and 29 June 2008, along with the relevant provisions of the new Companies Act. These regulations amend provisions of the new Companies Act that deal with the regulation and supervision of auditors, including those from outside the EEA. A final version of the Independent Supervisor Appointment Order 2007 (SI 2007/3534) and a new draft of the Statutory Auditors (Delegation of Functions etc) Order 2008 have also been published. They: » appoint the Professional Oversight Board (POB) as an independent supervisor to review the performance of statutory auditors’ duties; and » delegate the secretary of state’s functions under the new Companies Act in respect of supervising the auditing profession to the POB. The POB is part of the UK’s Financial Reporting Council that has overall responsibility for audit regulation within the UK. |