News and Topical Issues

We provide updates on topical issues that we feel will be of relevance to our clients

The following news is of particular relevance to our Private Company Limited by Shares clients.

Companies Act 2006 - Aide memoire

New forms and the option to file on-line

The new forms must be used for all company events that occur on or after 1 October 2009. Old forms will be rejected, unless they notify the Registrar about events predating 1 October. Filing on-line may be simpler and, sometimes cheaper. NB. Companies House have warned that their WebFiling service may be affected in the first days of October and will not be available during the weekend of the 3 and 4 October 2009.

PROOF – the new secure filing system

PROOF (Protected Online Filing) is a secure filing scheme developed by the Registrar to reduce the risk of identity fraud. PROOF customers agree to file certain documents only in electronic format, stopping malicious filing by non-authorised individuals. You can sign up on-line and no longer need the written consent of each director.NB. Existing PROOF customers need to sign on after 1 October 2009 to accept the new terms and conditions.

Residential addresses and the new ability to keep them private

Directors no longer need to publish their residential addresses. The can file any address (including the company’s registered office) where documents can be delivered and an acknowledgement or receipt can be provided if required (ie. not a PO Box or DX number). The residential address is only available to prescribed regulatory authorities (eg. the police and HMRC) and may be available to Credit Reference Agencies. Both addresses need to be provided to Companies House. Directors in sensitive occupations can have even more privacy by requesting the removal of previously filed address information, but this is a costly process at £140 a time!

Company’s registers, maintaining and updating

Going forward, companies need to maintain a register of directors (which no longer needs to give details of other directorships) as well as a register of directors’ residential addresses in their statutory books.

Establishing a SAIL for some of the company’s registers

In addition to the Registered Office Address (ROA), it is now possible to establish a Single Alternative Inspection Location (SAIL) where some of the registers (that have to be made available for public inspection) can be kept. Companies House have to be notified of the SAIL and which registers are sited there. NB Companies which already keep some of their registers at an address other than the Registered Office will need to nominate this address as a SAIL after 1 October.

New companies are easier to set up

It is easier to set up a new company – the forms are much simpler and do not have to be witnessed by a solicitor. The new company “Constitution” will be based on new Model Articles which are shorter and simpler than the “Table A” that it supersedes.

New model articles and how to adopt them

Existing articles may include out of date terminology and references which will make interpretation of the company’s rules more difficult. Also, there are several relaxations in the Companies Act 2006 which the company may not be able to take advantage of unless their existing articles are changed. NB It makes sense to ensure that all members of a group of companies are subject to the same constitutional requirements!

Other potential relevant changes

• Changing the company name
• Issuing share capital beyond what has previously been authorised
• Allotting new shares
• Issuing redeemable shares, reducing share capital or buying back your own shares

Changes brought about by the Companies Act 2006 make each of these matters simpler but existing companies may not be able to take advantage of them unless they change their existing articles.

In summary:

• It will be possible to set out in the articles the terms required to change the company name (previously it had to be by special resolution).
• Whilst newly-formed companies will not longer have an authorised share capital, existing companies may continue to be restricted by existing provisions– until the articles are amended. (The articles can be amended by ordinary resolution.)
• Where there is only one class of share, an ordinary resolution can be passed enabling directors to allot shares without shareholders’ approval. (For newly-formed companies on / after 1 October 2009, this directors’ right will be automatic, but should not be exercised if it prejudices the right of existing shareholders.)
• The issue of redeemable shares etc. no longer needs a specific authority in the articles. Therefore, if the company wishes to restrict this power, they will now need to add a specific restriction.

Need to notify changes to articles

All changes to articles have to be notified to Companies House within 15 days or the company will be subject to a £200 penalty.

New statement of capital

The statement of capital (which sets out details of the issued share capital at a given date) is a requirement of any annual return filing made up on or after 1 October 2009. It is also required with certain forms notifying of a change in capital. In most circumstances, the statement forms an integral part of the appropriate form, however, it may be necessary to file a standalone statement in some circumstances (eg. accompanying a reduction in share capital).

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