Companies Act 2006 – one year on
With a recent BIS review indicating largely positive feedback and good levels of awareness of the Companies Act 2006, we too have been in reflective mood. What has the impact been for us and, more significantly, our clients?
The Act has undoubtedly brought benefits, namely:
easier company formations – you can now incorporate a private limited company with one person as the director and member. No more statutory requirement for a company secretary.
electronic incorporation of Limited Liability Partnerships and electronic filing of more LLP documents
electronic filing at Companies House for changes of name
despite its size, the Act written in much plainer English, making it more accessible
setting out directors’ duties in the Act has brought directors’ attention to their obligations.
useful, new corporate procedures for reduction of capital and administrative restoration –no obligation to involve the courts in the process.
Northern Ireland now falls under the Companies Act 2006 and is an integral part of the Companies House network.
And the lows….
It is probably not unfair to say that Companies House may have underestimated the scale of operational change involved in meeting the requirements of the Act.
Up to the point of implementation, Companies House had set an admirable record. We had all become accustomed to companies being incorporated within the day. When October 1st 2009 dawned it was, unsurprisingly, a different story altogether, with some company formations taking several weeks.
The exclusion of addresses and shareholdings on the subscriber pages caused some consternation. Despite assurances, it was clear that consultation with the banks hadn’t always extended to the staff on the High Street.
Statement of capital – the new requirements imposed a greater administrative burden on companies. Fortunately, BIS has taken on board comments from Jordans and other industry experts and will be making changes to reduce the requirements.
In Scotland, there has been criticism of the devolution of the registry there and the shift in power to Cardiff has not been entirely welcomed. Certainly, some see the move to a “call centre” approach as eroding the relationship of Companies House in Scotland with the local professional community.
In conclusion, a change of this magnitude was never going to be without its teething problems. Companies House has undoubtedly made great strides towards its ultimate aim of becoming the first electronic-only registry.
Having filed the first electronic document back in 1996, Jordans was always going to embrace the changes brought about by the Act. And, with an increase in incorporations in England and Wales of 9% in the last year, we look forward to further progress in 2011.
What have your experiences of the Act been? Leave us your comments - we would be interested to hear about them.