The Company Secretary's Handbook: A Guide to Statutory Duties and Responsibilities

193 Pages·2008·5.84 MB·English

by  Helen Ashton

i
The Company
Secretary’s
Handbook
ii
Companies Act 2006
Are you up to date?*
The Companies Act 2006 has made significant changes to the way that companies
are run. It will be implemented in full by 1 October 2009. In the meantime various
parts of the Act are already in force. At the current time companies are operating
under both the Companies Act 1985 and those parts of the Companies Act 2006
that apply.
Easier formation
The latest changes on 6 April 2008 mean it is easier than ever to form a private
company in the UK as a company secretary is no longer mandatory. It is now
possible for one person to form a company. That person can be both a director and
a shareholder.
Company administration
The bad news is that much of the work previously carried out by a company secretary
must still take place. This now falls to the directors.
Companies find that company specialists are an invaluable resource in helping them
navigate through this complicated area. Under the companies legislation companies
must on a continuing basis:
• Maintain registers that are available to the public for inspection
These are normally kept at the registered office of the company:
o Register of directors
o Register of members (shareholders)
o Register of charges
The Companies Acts set out the prescribed details that these registers must contain.
• File annual returns
Annual returns are filed with the Registrar of Companies in Cardiff for England and
Wales, Edinburgh for companies incorporated in Scotland. Annual returns provide a
snapshot of information about a company. This information includes details on:
o Directors
o Registered office
o Type of business
o Share capital
o Details of shareholders
This information is then made available to the public either upon attendance at or by
contacting the Registrar of Companies or through specialist search agents.
• Prepare, approve and file annual accounts
Every company has to keep accounting records and from those records prepare a set
of accounts consisting of a balance sheet, a profit and loss account together with a
director's report and auditor’s report (if the accounts are being audited). The content
of these accounts are prescribed and must be filed with the Registrar of Companies
within the appropriate timescales each year. The filing period for accounts beginning
on or after 6 April 2008 has been cut by one month.
Late filing penalties
Companies will incur late filing penalties if the accounts are filed late with the Registrar.
Directors run the risk of being disqualified from acting if they are found guilty of
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persistent breaches of the filing requirements.
Regulations brought in under the new Act bring in a more onerous regime in relation
to penalties as from 1 February 2009. The penalties will double if companies
default more than once in relation to accounts for financial years beginning after
6 April 2008.
Current filing penalties (until 1 February 2009) – private company
Length of Period Penalty payable
Not more than 3 months £100
More than 3 months but not more than 6 months £250
More than 6 months but not more than 12 months £500
More than 12 months £1,000
New filing penalties (as of 1 February 2009) – private company
Length of Period Penalty payable Penalty payable if default
more than once – accounts
for periods beginning on or
after 6 April 2008
Not more than 1 month £150 £300
More than 1 month but
not more than 3 months £375 £750
More than 3 months but
not more than 6 months £750 £1,500
More than 6 months £1,500 £3,000
Accounts and members
Generally speaking, the annual accounts no longer need to be laid before the
members of a private company at a general meeting (normally the Annual General
Meeting). Companies still need to ensure that the accounts are circulated to the
members. This must be within the timescales laid down under the new Act.
• Other common filings and returns
Companies must also make sure that they notify the Registrar in the prescribed form
and timescale of other matters affecting a company. The most common of these are
the following:
o Changes to memorandum and articles of association (these documents
are the constitution of the company)
o Change company name
o Increase share capital
o Allot new shares
o Changes in officers – either appointments, resignations, retirements,
removals or changes in details
o Change in accounting reference date (affects the financial year end)
In some cases e.g. change of name, the change will not take effect until the Registrar
has confirmed this.
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Companies Act 2006
Further changes to date
The following areas (amongst others) have been subject to recent change:
• Prescribed information on websites in relation to company details
• Electronic communications – allowing companies and shareholders to
communicate via email, fax, website
• Annual General Meetings – no longer mandatory for new private companies
unless required by its constitution or other law
• Accounts – new filing periods
• Meetings and resolutions – changes to procedures to reflect modern business
practice, including a new mandatory procedure for written resolutions
• Directors’ service agreements
• Inspection of register of members
• Execution of documents.
In October 2008 more changes will be coming in. At Jordans we have made it our
business to ensure that we are up to date with the very latest changes in this area.
Should you wish to find out more you can subscribe to our email updates by
contacting us or visiting our dedicated website at www.thecompaniesact.co.uk
* Please note that this article covers changes as at 6 April 2008. This article is a general overview of the
requirements affecting private companies. Specific advice would need to be taken depending upon the
particular circumstances of your company.
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job done
Trust Jordans to manage your
company administration.
Statutory registers
Annual return filing
On 6th April, the position of company secretary was
Approving and filing no longer mandatory, leaving directors responsible for their
accounts
legal compliance roles. Fail to keep up with registers, returns,
Company law accounts and procedures, and your company could find itself on
procedures the wrong side of company law. That’s where our bespoke
General meetings and Directors’ Compliance services come in, taking care of tasks
accounts support to free your time, reduce risk and keep you compliant.
Whatever the job, consider it done.
To find out more, contact Angela Cotton
on 0117 918 1335 and [email protected]
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v
The Company
Secretary’s
Handbook
5TH EDITION
A guide to statutory duties
and responsibilities
Helen Ashton
vi
This book has been endorsed by the Institute of Directors.
The endorsement is given to selected Kogan Page books which the IoD recognises as being of
specific interest to its members and providing them with up-to-date, informative and practical
resources for creating business success. Kogan Page books endorsed by the IoD represent the
most authoratative guidance available on a wide range of subjects including management,
finance, marketing, training and HR
The views expressed in this book are those of the author and are not necessarily the same as
those of the Institute of Directors.
While every care has been taken to ensure the accuracy of this work, no responsibility for loss occa-
sioned to any person acting or refraining from action as a result of any statement in it can be accepted by
the author or publisher.
Legal editor: Mark Stevens
First published in 1995
Second edition 2000
Third edition 2004
Fourth edition 2006
Reprinted 2007, 2008
Fifth edition 2008
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as
permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced,
stored or transmitted, in any form or by any means, with the prior permission in writing of the publish-
ers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the
CLA. Enquiries concerning reproduction outside those terms should be sent to the publishers at the
undermentioned address:
Kogan Page Limited
120 Pentonville Road
London N1 9JN
United Kingdom
www.koganpage.com
© Helen Ashton 1995, 2000, 2004, 2006, 2008
The right of Helen Ashton to be identified as author of this work has been asserted by her in accordance
with the Copyright, Designs and Patents Act 1988.
The views expressed in this book are those of the author, and are not necessarily the same as those of
Times Newspapers Ltd.
British Library Cataloguing in Publication Data
ACIPrecord for this book is available from the British Library.
ISBN 978 0 7494 5321 3
Typeset by Saxon Graphics Ltd, Derby
Printed and bound in Great Britain by Bell & Bain Ltd, Glasgow
vii
Contents
Introduction 1
Acknowledgement 3
1. Duties of a company secretary 4
2. Types of company 12
Public limited companies 14; Private limited companies 16;
Companies limited by guarantee 16; Societas Europaea (SE) 17;
Other ways of conducting business 17; The limits of liability 18
3. Formation of companies 21
Checking company names 21; How to check a name 22;
Incorporation 25; Buying a company off the shelf 28;
Memorandum and Articles of Association 28; Trade mark
registration of a name 31
4. Getting started 32
The registered office 32; Disclosure – on websites, order forms
and communications 33; Directors and secretaries 38; Conflicts of
interest 54; The first allotments – subscriber shares 66; Opening
a bank account 66; Selecting an accounting reference date 67;
Choosing an auditor 68
5. Corporate governance and day-to-day administration 70
Board meetings 70; Keeping the minutes 76; Statutory
books and notices to Companies House 77; Corporate
governance 85
viii
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Contents ix
6. Keeping the statutory records 88
The registers – electronic or manual 91; Security 92
7. Annual routines 94
Accounts/financial statements 95; Annual general
meetings 98; Annual return forms 102
8. Dealing with changes 104
Resolutions 104; Board changes 108; Share transactions 109;
Dividends 111; Registration of mortgages and charges 113;
Resolving to change the company name 114; Changing
Memorandum and Articles of Association 114; Changing
auditors 115
9. Dissolution 119
Dissolution of a dormant company 119
Appendix 1: Companies Act 2006 implementation timetable 123
Appendix 2: Copies of Companies House forms referred
to in the text 125
Appendix 3: Useful addresses 167
Appendix 4: Deregulation of private companies 169
Bibliography 172
Index 174
Index of advertisers 182