The Companies Act 2006 finally came into full force and effect on 1st October 2009 and affects every Limited Company and LLP (Limited Liability Partnership) registered in England and Wales after that date. Thankfully it removed or relaxed many outdated and onerous obligations on small private companies under previous legislation.
Company articles of association were simplified by the Act and the memorandum of association only state that the subscribers wish to form a company and that they agree to become members of it and to subscribe for at least one share each, if the company has a share capital.
Companies formed automatically adopt the new model articles unless bespoke articles are submitted when the company is formed and if the articles do not contain restrictions on a company’s objects (purpose for which it is being set up), these will be unrestricted. A civil penalty for failure to notify the Registrar of changes to your articles of association within 15 days of the change carries a penalty of £200.
Companies formed before 1st October 2009 continue to be governed by their existing articles but may consider there are good commercial reasons for bringing them up to date by passing the resolutions necessary to amend or replace them. More information setting out issues that may trigger you to undertake a review of your company’s articles are set out on the following page: https://www.legalservicesforbusiness.co.uk/Helping your company articles help your business
Companies formed after 1st October 2009 no longer need to state their authorised share capital. There is also no limit on the number of shares directors can issue unless specifically set out in the Articles of Association. If shareholders do wish to control the power of directors to issue shares, this will need to be put into the Articles.
Statements of capital will need to be submitted to the Registrar in the following circumstances:
- In the confirmation statement if there have been any changes
- Upon the allotment of shares
- Upon a consolidation, sub-divisions, redemption, redenomination
- Upon a reduction of capital
- Upon a cancellation of shares following a buy-back
- Upon cancellation of treasury shares
If you are a director, secretary or member of a limited company or a member of a limited liability partnership, you can choose to have an address for service which is not your residential address, so your residential address is kept off public record.
This privacy will work well for first time directors, secretaries and members. Application can also be made to have the usual residential address of directors, secretaries and members removed from public record but only if their addresses were placed on public record on or after 1st January 2003. Any residential address information filed before that date will stay on public record.
Private limited companies and limited liability partnerships have nine months to file their accounts from the end of their accounting reference period. This is important as significant penalties will be incurred for late filings so you need to be prepared.
The penalties range from £150 if accounts are filed less than one month late, £375 for between one and three months, £750 for three to six months and £1500 if more than six months’ late. What’s more if you file late in two consecutive years, the penalties automatically double and the penalties do also apply to dormant companies and limited liability partnerships.