October 24, 2008Late Filing Penalties

Section 441 of the Companies Act 2006 requires all companies to deliver annual accounts to the Registrar of Companies by the due date. Section 453 specifies that a civil administration penalty shall be payable if the accounts are delivered late, and provides for the Secretary of State to specify the level of this penalty through regulations.

To increase the effectiveness of the late filing penalties, when section 453 comes into force Companies House will change the current schedule of late filing penalties as contained in section 242A of the Companies Act 1985. In parallel, the Government will amend section 242A of the 1985 Act so that these changes also apply to accounts prepared under the 1985 Act but delivered late on or after 1st February 2009 when the updated penalties come into force.

What are late filing penalties?
Late filing penalties were introduced in 1992 to encourage directors of limited companies to file their accounts on time because they must provide this statutory information for the public record.

All penalties to be increased to take account of inflation between 1992 and 2007
A faster rate of increase in penalties for companies who file more than one month late.
A doubling of the penalty for any company which files late having also filed late in the previous year.

The new table of penalties is a follows:

In addition where there was a failure to comply with filing requirements in relation to the previous financial year (and that the previous financial year had begun on or after 6th April 2008), the penalty will be double that shown in the table.

The new penalties will apply from 1st February 2009.

September 22, 2008Companies Act 2006 implementation commences 1 October

It may have received Royal Assent almost two years ago, but the start of next month will a see a further stage in the implementation of the Companies Act 2006, specifically to changes in the requirements for corporate and underage directors.
Corporate Directors
From 1st October a company will be required to have at least one director who is a natural person / individual. A company can no longer have all corporate directorships.

The only exemption to this is a grace period until October 2010 for any company that had only corporate directors on the 8th November 2006, the day the Companies Act received Royal Assent.

“This flexibility has sometimes been abused by those who
wish to conceal who is controlling a company,” said BERR, “For example those intending to commit fraud may use a company with corporate directors to help obscure the identity of the individuals involved.

The Government did consider the option of banning corporate directors, but concluded an outright ban might harm those companies who make use of the current flexibilities for entirely legitimate reasons.

Under-age Directors
The Act also introduces a minimum age for a director of 16 years old. On 1st October 2008 existing underage directorships will cease with no notification to the Registrar required. However, companies will need to amend their register of directors to reflect the fact that the appointment has ceased. It also removes the restriction on directors over 70 years old.

The following Companies Act 2006 provisions also share the same implementation date:

Objection to Company Names - Sections 69 to 74

Trading Disclosures - Sections 82 to 85

Provisions relating to the directors’ ‘conflicts of interest duties’ - Part 10

Share capital reduction through the solvency statement route - Sections 641 to 644

Control of political donations and expenditure, provisions relating to an independent candidate - Sections 362 to 379

Power of court to grant relief in certain cases - Section 1157

Restoration for personal injury claims of companies dissolved prior to 16 November 1969 - Section 1295 of the 2006 Act, and Schedule 16 (repeals)