Company Law Update

01/06/2016 Filed under Accounts, Finance, HR, IT, Payroll

This month, the Government have issued some updates for companies. We have collated some brief bullet points for your information and, for the most part, your summ.it advisers are already making sure your business is not affected. Should there be anything within that you’d like to discuss further, we are all on hand to explain how this update may influence you and your business.

 

Companies House:

From 30th June 2016, it will be possible for a company to elect to have Companies House as the location for the inspection of the records, rather than keeping books at the registered office.

A new People with Significant Control (PSC) register kicks in this month at Companies House which is required to be completed by 30th June 2016. The register requires details of all individuals who directly (or indirectly through other companies) control more than 25% of the shares in a company.

The annual return is due to be scrapped but details will still have to be submitted to Companies House at least once every 12 months, though more frequently if possible.

 

Directors:

Directors who own related companies which trade with each other have to have the permission of the Board in both companies to remain a Director.

Unlawful Dividends – if dividends are declared based on accounts which do not have the reserves to cover them then a liquidator may contact the Directors and accountants for facilitating the unlawful dividend.

 

Personal Data:

The Data Protection Act requires companies and accountants to register if they are transferring personal data outside of the European Economic area. This also includes use of tablets and phones outside the European Economic area and online facilities that use internationally hosted servers such as Dropbox. Registering is free.

 

LLPs:

These are now moving to the equivalent of FRS102, with periods effective commencing from 01.01.16.

 

Consumer Protection:

For companies that sell online but don’t include details of cancelation periods of 14 days then the default for returns is a year. Delivery charges must also be refunded and orders must be delivered within 30 days from order date.

Consumers must agree to the T&Cs, extra charges must be agreed with the consumer and credit card fees cannot exceed costs, a standard network charges number must also be available to manage returns and complaints.

 

IT:

Email footers must include the company registration name and number, the place of registration (England & Wales, Scotland, etc.), the registered office address, they must be in a decent font size and must be included in all auto-responses – including holiday out of office autoreplies. If traffic is monitored, details that this is the case must also be included. Virus disclaimers are advisable.

 

Fixed Penalty Clauses in Contracts (i.e. Parking Fines):

The Supreme Court have ruled that a penalty clause is unenforceable if it is both:

  • A secondary obligation – i.e. payable for breaching the first clause (eg, you bought a parking ticket but returned too late), or
  • Is exorbitant and unconscionable – i.e. excessive in comparison to the original loss – eg a £100 fine for being 5 minutes late where the parking would have been £5 would come under this.

 

Bribery Act:

There has been the first conviction under this at for bribing a customer to win a contract. However, a bribery can include excessive entertaining, travel costs, gifts, etc. The Employee Handbook provided to HR clients contains policies and procedures for Anti-Bribery.