As the final phrase of the Companies Act 2006 is introduced on 1st October 2009 Complete Formations has not only updated its systems to be inline with the new regulations but has produced a users guide to inform the public of the various provisions being introduced and their practical effect on limited company formation procedures.
Whilst there has been much commentary on the Companies Act 2006 as the introduction of each of the seven phrases were enacted in to law, most observers agree that the primary objective of making it easy to form and run a company have been achieved.
From making it optional to have a company secretary from 6 April 2008 to the protection of director’s home addresses starting in October 2009, these and other changes have increased the attractiveness to the company incorporation option to those considering starting a new business.
New Provisions from 1st October 2009
Directors are no longer required to have their home address on public record.
Northern Ireland companies can be formed through Companies House.
Simplified memorandum and articles of association.
Transition period timetable
New set of Companies House forms.
Secretaries and shareholders are no longer required to provide home address details.
Stricter interpretation and enforcement of similar company name rules.
Directors Home Addresses Not on Public Record
When forming a company the named director(s) will be required to provide two sets of address details.
The first of these will be their usual residential address (as was required before 1st October 2009). This address will be known only to Companies House and will be not published in the company’s filing records and will be kept secret from the general public.
A second address, known as a Service Address will need to be provided by each appointed director. This can be a residential or commercial property such as a business premises or third party registered office location. The main change here is that it does not have to be where the director lives.
The service address will be the location which is displayed in the public viewing sections at Companies House. Where the director chooses to list a location which is not their usual residential address no information concerning where a given director lives will be available to the public.
Where the director chooses, the two addresses provided on an incorporation application (residential and service) can be the same.
Even in this instance, because it will be known that a service address can be used it will in most situations not be apparent that the address available on public records is in fact the person’s home address.
Northern Ireland Companies
The Companies Act 2006 provisions being enacted on 1st October 2009 unify the registration of UK companies (English, Welsh, Scottish and Northern Irish) under one umbrella.
The main advantage to this change in the way companies which are to have their registered office in Northern Ireland is in the costs and speed of formation.
English, Welsh and Scottish companies have long enjoyed the facilities to form a company online in hours and for less than £25 whereas those in Northern Ireland company formations which were based around the manual paper form applications took day to complete and often hundreds of pounds to purchase.
These two compelling factors might well result in a substantial increase in the number of companies being set-up in the province as dramatically reduced costs and the promise of faster incorporations provides an attractive alternative to accepting a sole trader status.
Simplified Memorandum and Articles of Association
For companies registered after 1st October 2009 the Companies Act 2006 removes some of the sections which were contained in what was typically a ten page memorandum and articles of association document.
The refocused purpose of the incorporation document is to obtain confirmation from the company’s shareholders that they wish to subscribe to at least one share in the new entity.
Where to company will be one limited by guarantee the subscriber(s) merely acknowledge their intention to register a company.
The announcement of the intended company’s authorised share capital will be replaced by a statement of capital. Instead of there being a description of the nominal value of each share and the maximum number of these which the company can issue a factual statement covering the equity actually in issue at any given time will be supplied.
Thus the purpose of the new memorandum and articles of association now becomes one of the issued shares within the company. Details of this amount would include the total number issued, cumulative nominal values and the splits between different classed of shares where the company has more than one type of share.
Business objects and company liabilities which were previously housed within the memorandum or association will now become part of the articles section.
Transition Period Timetable
Companies House has set out a transition timetable designed to cater for the widespread changes in their systems, support and regulation of UK companies.
In order to properly test and analyse the results of incorporation requests all applications made for company registrations will be held at Companies House in a queuing system.
As the migration to their new systems occur they will strenuously and rigorously perform a wide range of possible scenarios designed to establish that each potential formation application produces the desired results.
The above queuing facilities will operate from 10am on Tuesday 29 September until 9am on Monday 5th October at which time company registration facilities will be opened.
New Set of Companies House Forms
A new set of Companies House forms have been created to reflect the inclusion of Northern Ireland companies under the UK company formation banner.
The names given to the new forms represent their specific function; for example, the new Annual return form is referenced as AR01 and the new appointment of a director document is AP01.
Under the Companies Act 1985, the above forms were narrated as 363 and 288a respectively and referred to specific sections of the legislation which governed Great British companies.
It is hoped the change will provide more meaningful referencing to those who know the particular function they wish to achieve but who are not conversant with the specific sections and sub-sections of the 2006 Act.
Secretaries and Shareholders Home Address Details
Under the Companies Act 1985 both appointed secretaries and shareholders of a limited company were required to provide details of their home addresses which would then be able on public records.
The provisions commencing on 1 October 2009 allow this information to be absent upon the appointment or transfer of shares.
The omission of address details for these two groups of individuals or corporate bodies is distinct from the requirements discussed above which relates to directors.
In the latter case, the information is given on appointment but not published. In the former situation the address details are simply not given.
Stricter Interpretation Similar Company Name Rules
The rules governing similar company names are now far more stringent than the regulations and interpretations given under the previous Companies Act.
The instances of being able to register a company name simply by adding “.com”, “UK”, “GB” and other short words or abbreviations will cease from 1 October 2009.
What many are describing as a more commonsense approach to assessing name differentiation will be in force and will ultimately seek to ensure that incidences of “passing off” will be curtailed.
The new provisions can be waived where the person or organisation seeking to register the similar name also owns the existing title and applied to Companies House in writing stating this fact.