As the final phase of the Companies Act 2006 comes in to effect on 1st October 2009, some of the new provisions which are being introduced are being viewed as some of the ambitious and far reaching changes for many years.
This article will explore the new regulations and will comment on how each might impact on the current company formation regime which existed prior to October 2009.
Northern Ireland Companies
The formation of companies in England, Wales, Scotland and Northern Ireland will no longer come under the auspices of two distinct and separate registration bodies. The workload of the Department of Enterprise, Trade and Investment which up until October 2009 was sole responsible for incorporating limited companies in Northern Ireland will now come under the management and directorship of Companies House.
Thus the distinction between Great British companies and UK registered entities which many commentators saw as an arbitrary yet very inconvenient hurdle to overcome will finally disappear.
For a company to be incorporated as a Northern Ireland business the requirements that it has its registered office in the province bring it in line with the regulations as they have pertained to both Scottish and Welsh company formation applications.
Another similarity in respect of the new law will be the manner in which Companies House Northern Ireland administers the registration and compliance work and services for entities based there. This is much like the Scottish branch of Companies House which operates for incorporated businesses based in Scotland.
As is the case with Scottish limited companies, those which are set-up in Northern Ireland will carry the letters NI as a prefix to the digits in their respective company numbers.
Correspondence with Companies House Northern Ireland will be through the offices of the old registry body located at Waterfront Plaza, 8 Laganbank Road, Belfast, BT1 3BS.
In addition to changes in how Northern Ireland company formations will now be administered, as part of the integration process between Companies House and the Registry of NI, other new changes will also be apparent.
Existing forms in issue by the Northern Ireland company registry will no longer be acceptable if they are submitted after implementation date of 1st October 2009. There will be a few exemptions relating to some documents which will exist for an interim period.
A brand new set of replacement forms will supersede those accepted in England, Wales, Scotland and Northern Ireland and will replace, integrate and represent the new jurisdictional area covered by newly expanded Companies House organisation.
The present Companies House databases covering UK incorporations will receive and adopt the forty thousand or so Northern Ireland Companies which previously existed on the NI registry. Their details with be presented alongside their English, Welsh and Scottish counterparts as part of the Webcheck and other related database querying services.
The online filing services enjoyed by Great British companies will extend to all UK incorporated business from October 2009 thus providing Northern Irish companies with electronic filing capabilities.
Included in the list of non paper submissions will be Annual Returns, the new equivalents of Forms 288a, 288b, 288c, dormant company filings and other documents which are currently available through the Companies House webfiling service.
Director’s Residential Addresses
Another far reaching change being brought in by the Companies Act 2006 on 1st October 2009 is the measure designed to afford some protection of director’s private residential addresses.
Prior to the introduction of this provision the general rule was that directors must state their home address at the time of their appointment, whether this be at the time of incorporation or a subsequent change after the company has been registered. This information would then be readily available on public record and could be accessed via Companies House or other providers using their data streams.
The sensitivity of having a director’s personal place of residence available within the public domain particularly in the current age of identity theft and other fraud has been finally recognised and actions taken to restrict the publication of this sensitive information.
From October 2009, when being appointed to the position of company director whether at the initial registration stage or subsequently, each person will be required to provide two addresses.
The first of these will be a service address which can be the company’s registered office where a third party service is used or another location which Companies House can use to communicate with the directors.
The second set of address details to be provided when registering a company will be the director’s residence i.e. the actual place where they live.
Whilst both sets of information will be sent to Companies House during the registration or appointment process, it will be the service address that will be placed on the public file and made available to the wider population. The actual home address will not be published and will remain confidential except for enquiries made by legal authorities.
There is no requirement for the service address to be different from the actual director’s home location. That is, it is not necessary for those setting up a company to go out and purchase third party address facilities specifically to meet the requirement to provide Companies House with a service address.
In situations where a company formation application opts to use the director’s residential address as the registered office (as is the case for many incorporations prior to October 2009) the same home address details will simply be entered in both the service address and actual residence boxes.
As far as the public are concerned, when they view the address information for a specific director it will not be apparent to them that the service address details are in fact that director’s usual residence as well.
There are certain conditions which exist for the use of a specific service address. These include the requirements to submit details pertaining to an actual location of a physical premises and not PO Box or DX referenced addresses.
Companies House may exclude certain locations from its list of acceptable service addresses where that it has had repeated problems in reaching the company’s directors recorded as using that premises as a service address.
It is therefore important for both users and providers of third party service addresses that the reception and sorting facilities are sufficient to properly identify and forward statutory post items promptly and accurately.
The effects of this specific provision of the Companies Act 2006 are likely to be far reaching. Prior to 1st October 2009 many submitters of company registration applications saw the ability to use a third party registered office address as a futile attempt to protect the personal details of the company’s officers.
They were largely correct in this prognosis as having the director’s details publically available negated most of the concealment benefits obtained from using an alternative third party statutory address.
The position now however presents a very different landscape. The option for directors to completely avoid divulging any details of their home addresses to the public is a very attractive option.
The risks of unannounced visitors to the officer’s residential home and those of identity theft would lead many to conclude that purchasing a third party registered office facility is a valuable alternative.
The common use of an external registered office address has thus changed from being a single use portal for statutory purposes to becoming a one stop, all inclusive facility to protect the company officers and one which will now be used in company formations on an increasingly regular basis.
Read the Users Guide for 1 October 2009 Provisions of the Companies Act 2006.