Changes in Company Law
Newsletter issue - October 08.
The Government undertook a huge overhaul of company law in 2006, and the result: the Companies Act 2006 (CA 2006) is designed to make the administration of the law easier for smaller companies and their directors. Not all the changes come in at once, as the regulation enactment dates of 6 April and 1 October are being used to gradually implement the changes between 2007 and 2009. This is a summary of the latest changes that will affect you.
Company Secretary: From 6 April 2008 the post of Company Secretary is optional for private companies. This means it now truly only takes one individual to own and run a private company. The person who holds the post of Company Secretary for your company may resign and need not be replaced, although all the Companies House documents they currently deal with still have to be completed and filed. However, there can be other practical and tax reasons why you should have a second person who can sign documents for the company, and who may have access to the bank account.
Company Directors: Previously directors had to retire from office at the age of 70, but this upper age requirement was abolished from 6 April 2007. However, from 1 October 2008 there is a minimum age of 16 for all company directors. This will prevent parents from making their children directors of their companies, possibly to avoid tax. All children under the age of 16 who still hold directorships on 1 October 2008 will automatically cease to be a director from that date. You need to check that this does not leave the company without a director, as from 1 October 2008 every company must have at least one real person in the post of director. A company cannot be the sole director of another company.
Privacy: Concerns for the privacy of officers and shareholders of private companies have been addressed. Annual returns made up for periods from 1 October 2008 do not include address details for the shareholders. From 1 October 2009 directors may provide a service address for the publicly available director's address details. This additional privacy applies to company secretaries from 6 April 2008. However, directors (not secretaries) must provide Companies House with their private residential address, which will be kept on a private secure register. Existing residential addresses for directors and secretaries will not be removed from public view, unless the individual resigns from their post or the address details are replaced.
Accounts Filing Deadlines: Private companies have 10 months from the end of their annual accounting period to file their accounts with Companies House. This period will reduce to nine months for accounting periods beginning on and after 6 April 2008. However, the filing period will run to the end of the corresponding month rather than to the corresponding day of the ninth month. So company accounts for the year to 30 April 2009 must be filed by 31 January 2010. Small and medium sized companies will still be able to file abbreviated accounts at Companies House.