legal updates
Friday, 11 Jan 2008
companies act 2006
changes from april 2008
The next round of changes to be brought in under the new Companies Act will come into force in April. The main changes to note are:
1. Company Secretaries
From 6 April 2008, the requirement for private companies to have a company secretary will be removed. However, all of the existing obligations of the company secretary, such as maintaining the company books and making returns to Companies House, will remain. Should you choose to remove your company secretary, these will become obligations of the directors. It is therefore expected that many companies will continue to have a company secretary, and that is the recommendation we are making to our clients.
2. Accounts
For each financial year starting after 6 April 2008, new rules in relation to annual accounts will apply. These relate to the size of the company and can be found here: Small Companies and Groups Regulations and Large and Medium-sized Companies and Groups Regulations. These provisions are drafted with the intention to make it easier for companies to find the sections applicable to them.
3. Thresholds for company sizes
The thresholds for small and medium-sized companies will be changed to:
- £6.5m turnover threshold and £3.26m balance sheet for small companies; and
- £25.9m turnover threshold and £12.9m balance sheet for medium-sized companies.
4. Auditors
From 6 April 2008:
- an auditor will commit a criminal offence if he knowingly or recklessly issues an audit report which contains something misleading, false or deceptive;
- audit reports must be signed by the “senior statutory auditor” in his own name on the firm’s behalf, rather than the firm’s name, and his name must appear on every copy of the audit report published;
- auditors will have to inform the appropriate auditor authority when the appointment terminates before the end of his term; and
- companies will be allowed to agree to limit the liability of their auditors, if it is fair and reasonable.
After April, the next round of provisions will come into force in October 2008, and shall include:
- general duties of directors in conflict of interest;
- control of political donations and expenditure; and
- objection to company names.