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DRAFT SECONDARY LEGISLATION UNDER CA 2006 |
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Over the last few weeks, BERR has published various draft statutory instruments under CA 2006 covering a variety of topics. The Government has advised that further regulations will be published in the autumn. Whilst BERR has already consulted on the policy content of the draft regulations (with the exception of the regulations concerning accounts), any further comments are requested by 30 September. BERR has published a report of the consultation on the accounts regulations on its website. The drafts may be freely downloaded from the BERR website: http://www.berr.gov.uk/bbf/co-act-2006/index.html Unregistered Companies The draft Companies (Unregistered Companies) Regulations 2008 (due to come into force on 1 October 2008) will revoke various provisions of the Companies Act 1985 and will adapt certain provisions contained within the Companies Act 2006 so that they will be applicable to unregistered companies. An unregistered company is one which has been incorporated in the UK and has a principal place of business here, but that was not incorporated or registered under a public statute, was not formed to carry on a business (but was formed for the gain of itself or its members) and is not an open-ended investment company (s 1043 CA 2006). Registration An unregistered company may be able to register itself at Companies House if it: » existed before 2 November 1862 (including those registered under the Joint Stock Companies Acts); or » was formed after that date under legislation or letters patent or is otherwise constituted according to law. The draft Non-Companies Acts Companies Authorised to Register Regulations 2008 will come into force on 1 October 2008. It will replace current provisions concerning the registration of a company which was not formed under the Companies Acts. In order to register, a non-Companies Acts company will have to have the consent of a simple majority of its members present at a general meeting called to consider registration. However, if a company does not have limited liability and it wishes to register as a limited company, 75% of the members present will need to consent. Before a non-Companies Act company is registered (with the exception of joint stock companies), it will have to send the following to Companies House: » a statement identifying the proposed name under which the company is to be registered; » a statement identifying where the registered office will be (i.e. England & Wales, Wales, Scotland or Northern Ireland); » a statement specifying the intended location of the registered office after registration; » the copy statute or other instrument constituting or regulating the company; » a list of all directors or managers of the company, specifying: - for an individual, his name, service address, usual residential address, occupation and date of birth; and - for a company or firm, the corporate or firm name and registered/principal office; » a statement confirming that the company wishes to be registered with the Welsh equivalent of ‘limited’ as part of its name, if this is the case; and » a statement confirming that the pre-registration requirements set out above have been complied with. Upon successful registration, Companies House will send a certificate of incorporation to the company. Consequences of registration Upon registration, all property that belongs to or is vested in the non-Companies Act company will automatically pass to and vest in the registered company. Any provisions contained within the legislation or other instrument constituting or regulating the company will continue to have effect as if they were contained in the company’s articles of association. The draft new model articles of association will not apply unless the company chooses to adopt them by way of special resolution. Trading Disclosures See CLM: ¶259, ¶585 Currently companies are required to publicise information about themselves on specified documents (see Company Law Memo 2006 Newsletter Issue 8). The draft Companies (Trading Disclosures) Regulations 2008 will extend these requirements when they come into force on 1 October 2008. The more information disclosed, the greater the benefit to the general public. Documents The company’s name will have to be displayed on all forms of documents and communications issued by it. It will have to be legible, i.e. in a reasonably sized font and easy to read colour and situated in a prominent place on the document. On all business letters, order forms and websites, companies will also have to give the following extra information: » the part of the UK in which the company is registered; » the company’s registered number; » the registered office address; » if the company is exempt from using the word “limited” as part of its name, the fact that it is a limited company; and » if the company is an investment company, the fact that it is an investment company. Building Currently, all companies must display their registered name at their registered office. The draft regulations will extend this requirement to offices at which the company register is kept and at all other locations where the company carries on a business, with exceptions for domestic premises and companies which have been dormant since incorporation. The name will have to be displayed in a prominent place so it may be easily read by any visitor. If a company shares an office with six or more companies, the rule is relaxed. Each company will only be required to display its registered name so that it can be read for at least 20 continuous seconds every 4 minutes, for example by having it displayed on an electronic scrolling banner. Articles of association See CLM: ¶435+, ¶9915, ¶9940 The government has issued an updated set of draft new model articles for companies incorporated on or after 1 October 2008. These are discussed together with related developments in CA 2006: implementation. Company records See CLM: ¶3888+ Every company must make its own records available for inspection (s 1162(2) CA 2006). The draft Companies (Company Records and Fees) Regulations 2007 (due to come into force in stages on 6 April 2008 then 1 October 2008) will allow a company to keep these records in an office other than its registered office, so long as that place is situated in the same part of the UK as its registered office (i.e. England & Wales, Wales, Scotland or Northern Ireland). Under the draft regulations, companies will have to make their records available for inspection for at least two hours between 9am and 5pm on each working day. A person wishing to inspect a private company’s records will have to give prior notice. Generally, the notice period will be 10 working days. However, this will be shortened to 2 working days if notice is given within the notice period for a general meeting or the 28-day time frame for agreeing to a written resolution. The records may be in electronic form or hard copy. Visitors will be allowed to make copies of the records while they are inspecting them. If a person asks the company to provide him with copies, the company will have to provide the copy in the format requested (i.e. electronic form or hard copy). However, if the records are only kept in hard copy, it will not have to provide an electronic copy to the person making the request. If a shareholder or debenture holder has already been provided with electronic copies of a record, the company is not obliged to also give him a hard copy of the same record. Fees The draft Companies (Fees for Inspection and Copying of Company Records) Regulations 2007 will come into force on 1 October 2007. These regulations contain transitional fee levels for the copying and inspection of company documents from 1 October 2007 until these provisions are superseded by the provisions of the draft Companies (Company Records and Fees) Regulations 2007, as outlined below. For copies of other records such as directors’ service contracts, resolutions and minutes of meetings, the fee will essentially be the same for both periods, but structured differently: » from 1 October 2007: 20p for every 1,000 words copied; and » from 1 October 2008: 10p for every 500 words copied, together with the reasonable costs incurred in delivery. |
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BERR has recently published several draft statutory instruments under the new Companies Act. This issue’s Focus on… summarises the content of those regulations and their relationship to the new Act. |
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Residential addresses See CLM: ¶3896, ¶3907 Company directors will benefit from greater protection under the draft Companies (Particulars of Usual Residential Address) Regulations 2008 (due to come into force on 1 October 2008) because their residential addresses will no longer be required to appear on the public register held by Companies House or in companies’ registers. A director’s residential address will become “protected information”. Directors and others whose addresses are on public record at Companies House will also be able to prevent their details being disclosed to the public where this puts them at risk. Restricted access to directors’ addresses In the interests of security, a group of public authorities (e.g. The Serious Fraud Office, The Office of Fair Trading) will have access to this protected information for the purposes of their investigations. Credit reference agencies will only be able to access the protected information for vetting applications for credit and for carrying out money laundering checks. Risk of violence or intimidation If there is a risk that a person will be subject to violence or intimidation as a result of the activities of a company (e.g. animal testing centres), he will be able to make an application to prevent an address from appearing on the public register. All applications will have to be supported by evidence supporting the person’s belief that there is a serious risk that that he will be subjected to violence and intimidation If an address is already on the register, an application will be able to be made to have the address removed, so long as the address was entered on or after 1 January 2003. The circumstances in which such an application may be made are where: » a director’s residential address is already on the register; » a director ceased acting on or before 30 September 2008; » the company entered shareholders’ addresses in an annual return or allotment of shares; » the company entered the addresses of subscribers in its memorandum of association; or » a secured lender registered a charge and its address has been recorded in the register. In all cases, the applicant will have to have a genuine belief that there is a serious risk of him becoming subject to violence or intimidation as a result of the company’s activities and he will have to provide evidence with his application to substantiate this belief. Responses to the consultation supported giving Companies House the power to remove any addresses recorded on the register prior to 1 January 2003. The government will amend the draft regulations on this basis and has meanwhile confirmed that serving directors with current confidentiality orders will automatically be granted extra protection. Companies House See CLM: ¶4040+ The following draft regulations have been published relating to the powers of the registrar of companies: » the draft Companies (Registrar of Companies) Regulations 2008; and » the draft Companies (Annual Return and Service Addresses) Regulations 2007. From 1 October 2008, new requirements concerning the filing of documents will come into force and Companies House will have greater powers to amend or rectify entries on the register of Companies. Amending the register Companies House will be able to annotate the register if any material in it is misleading or confusing. Companies House will also have the power to rectify the register by removing certain misleading or confusing information if it is forged, invalid or derived from an act committed without the authority of the company. The following details may be rectified: » a change in the company’s registered office address; » the appointment or resignation of a director or secretary; » directors’ residential addresses; and » addresses given for service. Rectification will only be able to be made by way of application to Companies House. Only the person who initially lodged the information with Companies House or person or company affected by the information will be able to make this application. A 28-day window will be open for objections to be raised about the proposed rectification. If an objection is made, the register will not be rectified. Filing Welsh companies will be able to file in Welsh the following documents without a certified English translation: » memorandum and articles of association; » resolutions/agreements affecting the company’s constitution; » accounts and auditors’ reports; » special resolutions re-registering the company as a different type of company (e.g. from public company to private limited company); » those relating to a reduction of capital; and » those changing the company’s registered office to an address in Wales. Overseas companies which have a presence in the UK will be able to file documents in another language, as long as they are accompanied by an English translation. However, the draft regulations restrict this to the memorandum and articles, court orders and valuation reports. Names and addresses The draft legislation also specifies the roman characters and symbols that can appear in names and addresses in any documents filed at Companies House. A service address is one to which documents may be physically delivered and where an acknowledgement of delivery may be received. Companies will not be able to give a post office box number or document exchange number as a service address on any document filed at Companies House. Annual return See CLM: ¶4060+ The draft Companies (Annual Return and Service Addresses) Regulations 2007 will change the detail of the information to be inserted into a company’s annual return. They are due to come into force on 1 October 2008. Companies will still be permitted to keep their records at a place other than at their registered office. They will have to state where these records are kept on their annual return (for example, at a solicitors office or their own or their parent company’s registered office). If the annual return is filed late, both the company and all of its directors (including shadow directors) will be liable for a fine. a. Shareholdings The annual return will have to give the following information: » names of all shareholders of the company on the date to which the return is made up; » names of all those who ceased to be a shareholder of the company since the date on which the last return was made up; and » the number and class of any shares transferred since the date on which the last return was made up and the date of any such transfers, the number and class of any shares transferred since the date on which the last return was made up and the date of any such transfers. b. Directors (not including shadow directors) The annual return will have to include the following information about each director: » name and former name; » service address (this may be the company’s registered office address); » the country or state in which he is usually resident; » nationality; » business occupation; and » date of birth. c. Secretaries Secretaries only need to disclose their full name and an address for service. Company accounts See CLM: ¶4185 + The government has published the following draft regulations relating to company accounts: » Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008; » Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008; » Companies Act 2006 (Accounts and Reports) (Amendment) Regulations 2008; » Companies (Summary Financial Statement) Regulations 2008; and » Companies (Revision of Defective Accounts and Reports) Regulations 2008. All of these regulations are due to come into force on 6 April 2008 and will apply in relation to financial years beginning on or after that date. Small companies The draft small company regulations set out the reporting requirements for: » individual Companies Act accounts for shareholders; < |