Company and commercial law
Most of the regulations in this area deal with company and partnership law, providing structures for businesses to use, and giving investors and third parties confidence in their dealings with companies.
You can find all 128 regulations that relate to company and commercial law here [opens in new window].
For ease of commenting we have divided these regulations into the following four areas:
For the very smallest companies, the requirement that they produce accounts in a prescribed form is quite burdensome. Imagine that you start a business and it doesn’t immediately take off. Perhaps in the first year, you do £2000 worth of business and make £500 profit. (This is a very common situation. Many businesses take a while building up their client list in the early days.)
At the end of your first year, you have to send an annual return to Companies House, which is easy. Unfortunately you also have to send accounts and a tax computation, which might be very difficult without an accountant. If you employ an accountant, though, it will push the company into making a loss. The silly thing is that for a company in this position, there isn’t much income to tax anyway. Because HMRC have to read through the accounts and tax computation, they may even make a loss simply because of the time involved in issuing an assessment.
I would like to suggest a simplified tax regime for companies that have, say, turnover less than £2000. They should just be asked to complete a form giving turnover and profit. The turnover figure shows that they qualify for the scheme, and they pay tax on the declared profit. HMRC are of course free to audit companies to make sure they are in the scheme legitimately, just like they can do now with companies that seem to be giving false figures in their accounts.
A scheme like this would be a godsend for many businesspeople who are just starting out.
It should be made clear that small business has an absolute right to a fair hearing in all litigation. If the small business is a limited company, it should have the same basic rights in this respect as an individual. If the plaintiff is a public authority, it should co-operate in ensuring that any hearing is held at a time and place convenient to a small business defendant. Again individuals and limited companies should be treated equally in his respect. The Ministry of Justice should instruct local court management to co-operate with this.Comment Tags: Litigation – Right to Fair Hearing
Members of the Association of Company Registration Agents (ACRA) form more than half of all privately-formed companies in Great Britain.
The activities of company formation agents are subject to the Money Laundering Regulations 2007 and they make strenuous efforts to comply. Company formation itself is, under certain circumstances, an activity within scope (for example if a “business relationship” has been established). Yet probably the largest provider of companies, through its new web service, regards itself as not needing to comply with anti-money laundering legislation. That is Companies House, who directly form around one in six of all companies. We believe this to be inequitable and wrong. Clearly, it creates an unacceptable loophole in the whole regime. We believe that it is wrong because we feel that Companies House is, in providing the service, going beyond its registration function of statute and is delivering a service; we can see no difference between the service Companies House offers and that offered by some agents; we doubt that Companies House can say that the service is required under the EU’s First Company Law Directive; we do not believe that the electronic service is an equivalent to its previous practices with paper; and we feel that it goes beyond a “purely administrative function” .Comment Tags: ACRA, Companies House, Company formation, money laundering
Members of the Association of Company Registration Agents (ACRA) form more than half of all privately-formed companies in Great Britain.
The activities of company formation agents in the UK are subject to the Money Laundering Regulations 2007, policed by HMRC. We believe that it should be a requirement that those who want to form companies electronically at Companies House should be from jurisdictions that are demonstrably at least as committed to anti money laundering as is the UK. Otherwise we cannot be confident the AMLR rules have real bite or that UK companies have the respectability that is in our long-term interests.Comment Tags: ACRA, Companies House, money laundering
Members of the Association of Company Registration Agents (ACRA) form more than half of all privately-formed companies in Great Britain.
We do not believe that the intention behind Section 155 of the 2006 Act (that at least one director must be a natural person) is being met. That intention, it seems to us, is that someone can be held responsible for the activities of the company. However, where that natural person is from outside the UK – and particularly where they claim to be from a country with which we have few relations (no checks are made and it is often not even known whether the director’s claimed address exists) – then the idea that the provision of a natural director will bring about greater accountability is a sham. We understand that other countries, including other EU member states recognise this and find ways to implement the rule more meaningfully than we have.Comment Tags: ACRA, Directors
Members of the Association of Company Registration Agents (ACRA) form more than half of all privately-formed companies in Great Britain.
As stated in another posting, we do not believe in general that there is too much regulation at the time of company formation. However, we do feel that the rules on company names, both at the formation stage and subsequently (for example on change of name) are arbitrary, difficult to understand, and not always operated with common sense by those who have to police them. The list of names for which approval is required is old-fashioned and has no clear rationale. The process of approval can take unexpected turns (for example if the company name contains the word “bank”, even if there is clearly no intention to take deposits or engage in any other banking activity). The operation of the “same as” and “too like” rules can cause confusion.Comment Tags: ACRA, Companies House, Company formation
Members of the Association of Company Registration Agents (ACRA) form more than half of all privately-formed companies in Great Britain.
We do not believe that, in general, the rules for forming companies should be relaxed. It is important that the formation of a company is seen as a serious act by its promoters; the formation of companies in the UK is already easier than in almost any other jurisdiction; we do not know of any case where the processes or costs involved have deterred other than frivolous formations; and we believe that it is vital that the British reputation as a responsible and law-abiding place to do business is not eroded by an apparently casual approach at the formation stage.Comment Tags: ACRA, Company formation
The penalties on directors and officers for non-compliance deter individuals from volunterring for unpaid roles in residents’ societies established as companies. While those individuals should obviously be liable for fraudulent use or embezzlement of funds held on behalf of residents, expecting them to risk a criminal record for late filing of accounts is disproportionate. Some proportionate regime for directors and officers holding unpaid positions in not-for-dvidend companies (i.e. where the articles of association prohibit distribution of proceeds to members by way of dividend or any other means) would encourage “Big Society” participation.
Company Law needs BETTER regulation, not LESS regulation. Directors should be required to publish DETAILED accounts of monies received and monies spent as there is a lot of tax evasion and fraud by dishonest Directors