Clifton Asset Management

CLIFTON ASSET MANAGEMENT HIGHLIGHTS COMPANIES ACT CONFUSION AS FINAL PHASE COUNTDOWN BEGINS

Last stage of company law overhaul comes into force on 1st October

The UK‘s businesses have under three weeks to prepare for the final phase of the Companies Act 2006 – the single biggest piece of legislation ever to be brought before Parliament.

Several key provisions of the Act take effect on 1st October, a year later than planned, after the Government announced a 12-month delay to the original schedule.

And according to Ellis Organ, financial director at Clifton Asset Management, which provides specialist financial and strategic advice to SMEs, there is still widespread ignorance about the legislation.

“This was the biggest overhaul of company law for more than two decades and requires businesses to re-visit every aspect of their structure, shareholding and reporting procedures,” he said.

“The stated aim of the Act was to simplify corporate procedures and make them more transparent - essentially to try to make life simpler for the UK‘s 2.5 million registered private companies.

“However the introduction of the legislation was mishandled and the provisions which were due to take effect a year ago were postponed, because Companies House systems and procedures were not able to meet the original deadlines.

“We speak to around 150 small and medium-sized businesses every week and understandably, there is still widespread confusion among owners and directors about this huge piece of legislation, the timetable involved and exactly what it means for their business.”

The final provisions of the Companies Act 2006 which come into force next month affect the formation of a company and its internal constitution, while there are also regulations concerning directors' residential addresses, company and business names, and a company’s share capital.

Mr Organ commented: “The majority of the changes for which businesses need to have prepared next month relate to procedural and constitutional matters, but the new law concerning directors‘ addresses is perhaps the most eye-catching.

“Until now, it has been possible to find any private company director‘s home address by means of a simple search, but now they can insist that Companies House keeps this confidential.”

ENDS 14th September 2009

For further information please contact Neil Fraser, Sturgess Van Damme, on 01275 349011 or email neil@sturgessvandamme.co.uk