Company annual returns could be scrapped to help businesses
The government is proposing to scrap mandatory annual returns to help companies save time and money.
Under company law at present, companies must provide details every year about matters such as the business address, business type, names of directors and information about shareholders and shares.
For most businesses, this information barely changes from one year to the next so submitting an annual return can lead to unnecessary cost and a waste of valuable time. Ministers are now looking at ways to reduce this burden by enabling firms to simply confirm each year that the information held at Companies House is correct, or by updating the information whenever it changes.
The amount of information required may also be reduced.
The government is also looking at measures to:
- make it easier to jointly file annual accounts to Companies House and HMRC by improving the online filing system for Companies House
- reduce form filling for companies with the removal of the ‘consent to act’ note sent to Companies House when a director is appointed. A company would only need to confirm it holds such consent and would only need to provide such material in the event of a dispute or legal proceedings
- allow companies the option of holding their register of directors and shareholders at Companies House
- reduce the time it takes for a company to be struck off the register at Companies House in specific circumstances. Currently this takes roughly 6 months - under the proposals this could take as little as 6 weeks
- require companies to provide a demonstrable link with their registered office in the event of a complaint, to help tackle the issue of fraudulent use of an address
- conceal all or some of the date of birth of a director listed at Companies House to help tackle identity theft
- improve communication with companies by requesting that when a company is set up they supply an email address to the Companies House and keep it up to date
- improve the reporting of company subsidiaries. Proposals suggest either companies reporting their total number of subsidiaries or at least reporting these in one return. Currently some companies only disclose information on their primary subsidiaries if the information is too extensive.
Business Minister Jo Swinson said: “We’re taking steps that will mean that businesses, pushed for time and money, are not simply filing paperwork for the sake of it. This will mean companies can concentrate on growing their business and creating jobs.”
The proposals are now being put to public consultation. We shall keep clients informed of developments.
Please contact Jon Alvarez about the issues raised in this article or any aspect of company law.